BP Gets Biggest Criminal Fine After Biggest U.S. Oil Spill
NEW YORK ( TheStreet) -- BP(BP) will pay the U.S. government $4.5 billion over a span of years to settle criminal claims against the British oil giant resulting from its April 2010 Macondo well oil spill, called the largest manmade environmental disaster in U.S. history.
In addition to what amounts to the largest-ever criminal settlement with federal authorities, BP said it will plead guilty to 11 felony counts and two of its employees will face criminal manslaughter charges for their role in the oil spill in the Gulf of Mexico.
"All of us at BP deeply regret the tragic loss of life caused by the Deepwater Horizon accident as well as the impact of the spill on the Gulf coast region," Bob Dudley, BP's chief executive, said in a statement. " We apologize for our role in the accident, and as today's resolution with the U.S. government further reflects, we have accepted responsibility for our actions," he added.
Felony counts relate to misconduct or neglect relating to the loss of 11 lives; one misdemeanor count under the Clean Water Act, and a felony count of obstruction of Congress. The obstruction charge pertains to two BP communications made to a member of Congress during the spill response about flow rate estimates, BP said in a statement, which noted the resolution is subject to U.S. federal court approval.
While the settlement marks an end to BP's criminal liabilities with the U.S. Department of Justice, the oil producer still faces civil claims. Already BP has embarked on a multi-year plan of asset sales to raise roughly $40 billion to meet civil liability tied to the oil spill.
BP will pay a $4 billion criminal settlement to the Department of Justice in installments over a period of five years, and it will pay the Securities and Exchange Commission a further $525 million, over a period of three years. The company also said it will increase a $38.1 billion provision for spill-related liability by $3.85 billion, as a result of Thursday's settlement.
In a statement, BP said it still faces federal civil claims, including a potential violation of the Clean Water Act and other violations of state and federal regulations related to the spill. Analyst estimates indicate that federal civil liability may reach many multiples of the $4.5 billion criminal settlement reached on Thursday.
"BP is prepared to vigorously defend itself against remaining civil claims," the company said. U.S. Attorney General Eric Holder said in a Thursday press conference that federal criminal investigations to the spill continue.
Findings of negligence in BP's drilling in the Gulf of Mexico could lead to billions of further spill liability by the oil giant. An environmental fine associated with gross negligence, if proven, could reach $21 billion, given guidlines under the Clean Water Act.