U.S., Gulf States Considering $16 Billion BP Oil Spill Deal: WSJ

February 24, 2013Email ThisPrintNewslettersTweetArticleCommentsThe U.S. government and Gulf Coast states are considering offering BP Plc a deal under which it pays $16 billion to settle civil suits stemming from the deadly 2010 Deepwater Horizon explosion and oil spill, the Wall Street Journal reported on Friday.

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, and both the company and the U.S. Justice Department declined to comment.

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

BP has spent or committed $37 billion on cleanup, restoration, payouts, settlements and fines. That includes an estimated $8.5 billion deal with most plaintiffs and a record $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 U.S. 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.”

 

 

Copyright 2013 Reuters. Click for restrictions.Email ThisPrintNewslettersTweetCategories: National NewsTopics: BP Justice oil spill, BP oil spill settlement, Gulf states oil spill settlementHave a hot lead? Email us at newsdesk

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Transocean to Pay $1.4 Billion to Settle Charges from BP Oil Spill

January 4, 2013Email ThisPrintNewslettersTweetArticleCommentsTransocean Ltd agreed to pay $1.4 billion to settle U.S. government charges over BP Plc’s massive Gulf of Mexico oil spill in 2010 and the rig contractor admitted that its crew on the Deepwater Horizon was partly responsible.

Transocean, which employed nine of the 11 workers killed in the accident, had set aside $1.5 billion for the U.S. Department of Justice out of a $1.95 billion Macondo loss provision. The settlement, unveiled on Thursday by the DoJ, includes $1 billion in civil penalties and $400 million in criminal penalties.

Still looming is a settlement with the plaintiffs committee that represents more than 100,000 individuals and business owners claiming economic and medical damages. So the ultimate cost of Macondo to Transocean could end up being more than $4 billion, UBS analyst Angie Sedita said. Last year, BP reached a $7.8 billion plaintiffs liability settlement.

The shares of Switzerland-based Transocean rose 6.4 percent to close at $49.21 in New York on the lower-than-expected DoJ payout, with Barclays having expected a settlement of $2.5 billion. The cost of insuring Transocean debt fell sharply.

“The bottom line to me is they now can put away the big black cloud that has been hanging over them,” said Phil Weiss, an oil analyst at Argus Research.

BP and its contractors have sought to push blame on to each other since the 2010 well explosion caused the largest-ever U.S. offshore oil spill. Lawyers and analysts see the federal settlements with BP, and now Transocean, as a solid legal framework to start putting the disaster behind them.

Halliburton Co, which performed cementing work on the Macondo well, remains the only one not to have settled. Daniel Becnel, a Louisiana lawyer representing spill-related claimants, believes that settlement is merely a matter of time because none of the three really wants to fight it out in court.

The BP-contracted Deepwater Horizon was drilling the mile-deep well on April 20, 2010, when a surge of methane gas caused a blowout. The accident led to a months-long U.S. deep water ban and intense scrutiny of the offshore drilling industry, which is now booming worldwide despite lingering public concerns.

Of the $400 million in Transocean criminal fines, $150 million will help protect the Gulf of Mexico, while another $150 million will fund spill prevention and response efforts there, the DoJ said. Transocean must also implement court-enforceable measures to improve safety and emergency response on U.S. rigs.

“From what I have read, they (Transocean) played a part, but BP is the lion’s share and ought to pay $15 billion dollars.” said Tony Kennon, mayor of Orange Beach, Alabama.

The U.S. Chemical Safety Board found that BP and Transocean both had “safety management system deficiencies that contributed to the Macondo incident,” and neither had adequate safety rules.

The DoJ said that in agreeing to plead guilty to violating the Clean Water Act, Transocean admitted that members of its crew, acting at BP’s direction, were negligent in failing fully to investigate indications that the Macondo well was not secure.

“Unfortunately, Halliburton continues to deny its significant role in the accident, including its failure to adequately cement and monitor the well,” BP said in a statement.

Halliburton said it had substantial legal arguments against any liability, including an indemnity in its contract with BP. Halliburton shares closed 1.7 percent higher at $36.31.

BP agreed in November to a DoJ settlement of its own worth $4.5 billion, including the largest criminal fine ever at $1.256 billion. The London-based oil company also agreed to plead guilty to obstruction of Congress, a felony.

New York-traded shares of BP closed 2 percent higher on Thursday.

Attention now turns to any possible settlements ahead of a Macondo-related trial due to start on Feb. 25 in New Orleans, including for Clean Water Act (CWA) violations that may cost BP $21 billion if it is found grossly negligent.

“That’s where fairness will be found – or lost,” National Audubon Society CEO David Yarnold said of BP’s CWA case, since most of the fines would go toward restoring the Gulf of Mexico.

Copyright 2013 Reuters. Click for restrictions.Email ThisPrintNewslettersTweetCategories: International NewsTopics: BP oil spill, environmental damage payments, Gulf of Mexico, Transocean liability settlementHave a hot lead? Email us at newsdesk

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Plaintiffs, BP Urge Judge to Approve $7.8 Billion Oil Spill Settlement

November 9, 2012Email ThisPrintNewslettersTweetArticleCommentsBP Plc and lawyers representing over 100,000 individuals and businesses claiming economic and medical damages from the 2010 Gulf of Mexico oil spill on Thursday urged a U.S. judge to approve a proposed $7.8 billion class-action settlement.

U.S. District Judge Carl Barbier initially approved the deal in May, but called the “fairness hearing” to weigh objections from about 13,000 claimants challenging the settlement to resolve some of BP’s liability for the worst offshore oil spill in U.S. history.

BP still faces civil and potential criminal liability charges brought by the U.S. government and U.S. states.

Barbier did not issue a final ruling at Thursday’s hearing in a New Orleans court, but he appears poised to grant final approval to the deal in the coming days, legal experts said.

“We shouldn’t lose sight of the forest for the trees,” Barbier said at the end of the hearing, saying that some objections “were not frankly made in good faith and bordered on being frivolous.”

London-based BP’s Macondo well spewed 4.9 million barrels of oil into the Gulf of Mexico over a period of 87 days. The torrent fouled shorelines from Texas to Alabama and eclipsed the 1989 Exxon Valdez spill in Alaska in severity.

Lawyers for some affected parties say they will “opt out” of the deal, reached in March between BP and lawyers representing plaintiffs ranging from restaurateurs, hoteliers, and oyster men who lost money from the spill to recovery workers and coastal residents claiming medical damages from the cleanup.

“The settlement zones are inherently unfair,” said Stuart Smith, a lawyer for Florida business owners, referring to boundaries set by the deal which are meant to compensate businesses and homeowners based on their proximity to the spill.

Barbier said he had no authority to tweak the deal as written, but merely to approve or reject it.

“It sounds to me that maybe your gripe is that you weren’t in the room and that you would have done things differently,” Barbier told one of the objectors’ lawyers. “I don’t think there is such a thing as a perfect settlement.”

Jim Roy, a lead plaintiffs’ attorney, said the deal would resolve “well in excess of 100,000 claims.” BP in March estimated the deal’s cost at $7.8 billion, but damages are uncapped and could rise to far exceed that, Roy said.

“This is not a bunch of insurance adjustors trying to save money for BP,” Roy said of the deal, but rather “a way to quickly get a fair and objectively determined settlement and to avoid litigating for potentially 20 or more years such as what happened in the Exxon Valdez.”

Rick Godfrey, an attorney for BP, said the settlement should not be delayed by the “miniscule” number of objectors.

“BP has no intent of allowing justice to be delayed, much less denied, as a result of this tragic event,” he said.

Barbier is likely to approve the settlement in coming days, said Blaine LeCesne, a law professor at Loyola University, citing the judge’s initial approval of the deal as the strongest signal of its eventual fate.

“It’s inevitably going to leave some people unsatisfied,” LeCesne said. “But it casts a very wide net and includes a remarkably high number of potential claimants.”

BP has been locked in a year-long legal battle with the U.S. government and Gulf Coast states to settle billions of dollars in civil and potential criminal liability from the explosion aboard the Deepwater Horizon rig that killed 11 workers and caused the massive spill that soiled the shorelines of four Gulf Coast states.

Absent a far-reaching settlement, Barbier will preside over a sprawling three-part non-jury hearing to decide BP’s liability for the spill, now set to begin on Feb. 25, 2013.

 

 

Copyright 2012 Reuters. Click for restrictions.Email ThisPrintNewslettersTweetCategories: National NewsTopics: BP settlement, Gulf oil spill damages, Gulf oil spill plaintiffs, U.S. District Judge Carl BarbierHave a hot lead? Email us at newsdesk

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Study: Poor Roads Cost Texans $23 Billion a Year

October 4, 2012Email ThisPrintNewslettersTweetArticleComments

A nonprofit highway industry group says its study found decaying Texas roads are costing motorists more than $23 billion a year.

TRIP is sponsored by insurance companies, highway and transit engineers and builders and other groups. The Washington, D.C.-based group says decaying roads were hitting Houston-area motorists hardest in the pocketbook

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MAPFRE Q1 Results: Total Revenue Tops $8.8 Billion, Latin American Growth

, an 11.5 percent increase compared to Q1 2011, “thanks to sustained growth of the international business,” the report noted. Recurring results grew by 3.7 percent, to

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Allianz Preliminary Q1 2012 Figures Forecast $1.8 Billion Profit

May 10, 2012Email ThisPrintNewslettersTweetArticleComments

German insurance giant Allianz SE has released preliminary figures for the first quarter of 2012, which indicate that total revenues will be over

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As Open Enrollment Ends, People with Medicare save $1.5 billion on prescriptions

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