US Considers Cutting a Deal With BP

By Reuters

24 February 13

he US government and Gulf Coast states are reportedly considering offering BP Plc a deal under which the company will pay $16bn to settle civil suits stemming from the 2010 Deepwater Horizon disaster.

The deal would cover the company's potential penalties under the Clean Water Act and payments under the natural resources damage assessment, the Wall Street Journal said, citing sources familiar with the discussions. It was unclear if the deal had been formally offered to BP; both the company and the US Justice Department declined to comment.

A settlement could avert a bruising court battle over the worst ever US offshore oil spill. which is slated to start on Monday in New Orleans, although the trial may begin as the terms of the deal are hammered out. A settlement would also put a solid number on BP's costs under the Clean Water Act, estimations of which range from $4.5bn to $17.5bn, as well as potential natural resources damage assessments to the states under the Oil Pollution Act.

BP has so far spent or committed $37bn on clean-up, restoration, payouts, settlements and fines. That includes an estimated $8.5bn deal with most plaintiffs and a record $4.5bn in penalties, and a guilty plea to 14 criminal counts to resolve charges from the Justice Department and civil claims from the US Securities and Exchange Commission.

BP has said it will settle if offered "reasonable terms", but also that it is prepared to go to trial if it deemed such demands to be "excessive and not based on reality".