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US Justice, Gulf states crafting BP spill settlement

February 24, 2013

A decomposed fish lies in the water as workers pick up oil balls from the Deepwater Horizon oil spill in Waveland, Mississippi in this July 7, 2010 file photo. — Reuters picA decomposed fish lies in the water as workers pick up oil balls from the Deepwater Horizon oil spill in Waveland, Mississippi in this July 7, 2010 file photo. — Reuters picWASHINGTON, Feb 24 — The US government and Gulf Coast states are considering offering BP Plc a deal under which it pays US$16 billion (RM50 billion) to settle civil suits stemming from the deadly 2010 Deepwater Horizon explosion and oil spill, the Wall Street Journal reported yesterday. 

The deal would cover the company’s potential penalties under the Clean Water Act and payments under the Natural Resources Damage Assessment, the newspaper said, citing sources familiar with the discussions. 

It was unclear if the deal has been formally offered to BP. The US Justice Department declined to comment. 

A settlement could avert a bruising courtroom battle over the worst ever US offshore oil spill slated to start tomorrow 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, which range from US$4.5 billion to US$17.5 billion, as well as potential natural resources damage assessments to the states under the Oil Pollution Act. 

“BP doesn’t talk about possible offers or negotiations, but I can tell you we are ready for trial and looking forward to the opportunity to present our case starting Monday,” BP spokesman Geoff Morrell said when contacted by Reuters. 

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

BP has said it would settle on “reasonable terms,” but was prepared to go to trial if the demands were “excessive and not based on reality.” — Reuters

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