Oil giant BP is to pay the biggest fine in US history after today agreeing a $4.5 billion (£2.8bn) settlement with authorities for claims relating to the Deepwater Horizon disaster.
BP will pay the fine over six years after reaching a deal with the United States department of justice (DoJ) and the Securities and Exchange Commission (SEC) that has seen it plead guilty to 14 criminal charges relating to the oil rig accident in 2010, which killed 11 workers and spilled millions of barrels of oil into the Gulf of Mexico.
Bob Dudley, chief executive of BP, said: “We apologise for our role in the accident and, as this resolution with the US government further reflects, we have accepted responsibility for our actions.”
BP has pleaded guilty to 11 felony counts of misconduct or neglect and three misdemeanour counts – including one under the Clean Water Act and one for obstructing Congress.
BP will pay $4bn to the DoJ in instalments over five years and an additional $525m to the SEC over a period of three years. It will make the first payment of $175m this year to the SEC.
The group has already paid out more than $38bn relating to the oil spill.
Dudley said: “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.”
He added: “Since the spill, we have worked hard to rebuild confidence in the company.”
The settlement removes some of the uncertainty hanging over the stock since the disaster, but it does not cover outstanding civil claims against the group.
BP said it will “continue to vigorously defend itself” against civil claims and allegations of gross negligence.
“We are open to settlements, but only on reasonable terms,” said Dudley. The record-breaking fine surpasses the $1.3bn paid by drugs group Pfizer in 2009 for marketing fraud related to a pain medicine.
The Deepwater Horizon rig, 50 miles off the Louisiana coast, sank after the April 2010 explosion. The well on the sea floor spewed an estimated 206 million gallons of crude oil, soiling sensitive tidal estuaries and beaches, killing wildlife and shutting vast areas of the Gulf to commercial fishing.
The spill exposed lax government oversight and led to a temporary ban on deepwater drilling while officials and the oil industry studied the risks, worked to make it safer and developed better disaster plans.
BP’s then chief executive Tony Hayward stepped down after the company’s repeated gaffes, including his statement at the height of the crisis: “I’d like my life back.”
The cost far surpassed the Exxon Valdez Alaskan spill in 1989. Exxon ultimately settled with the US government for $1bn, about $1.8bn today. The US government also sued Transocean, the Deepwater Horizon rig’s owner, and contractor Halliburton, but a string of pre-trial rulings by a federal judge saw BP the focus of action.