BP to file case against the US over Deepwater Horizon oil spill

NEW STATESMAN [19/02/13]

The civil trial will begin on 25 February.

Photograph: Getty Images.  [SOURCE: http://www.newstatesman.com]

BP is preparing to file a case against the US Department of Justice over the Deepwater Horizon oil spill in 2010 arguing that its penalties for the causes of the accident and its efforts to clean up the oil after the leakage should be far below the $20bn.

The British oil and gas company has indicated it does not expect to reach a civil settlement with the US Department of Justice and intends to fight in court to reduce its liability.

Rupert Bondy, general counsel of BP, told the Financial Times that the penalty BP faces under the Clean Water Act could be well below $5bn.

“Where we are faced with demands that are excessive and not based in the reality of the case, we are prepared to defend ourselves and go to trial ... we have the facts and law on our side,” Bondy added.

Meanwhile, US officials, including attorney-general Eric Holder, argue that BP is liable to pay a maximum penalty of $4,300 per barrel of oil spilled, or about $21bn based on the US government’s estimate that 4.9m barrels spilled since the incident happened due to gross negligence of the company’s employees.

On the other side, BP rejects that claim saying that its actions did not reach the high bar of gross negligence. The company also argues that the volume of oil spilled into the water was much less than 4.9m barrels.

As per the Clean Water Act, judges can consider eight factors when setting penalties, including efforts made by the polluter to mitigate the effects of the spill. BP believes the $14bn it spent on clean-up and $9bn in initial compensation will be considered.

Bondy added that the British company rejected most of the separate claims for damages of more than $34bn from states and localities in the gulf region affected by the oil spill.