BP agrees £4.9bn payout for oil disaster

BP is to pay out £4.9 billion in compensation to the thousands of fishermen and others affected by the oil giant’s Gulf of Mexico disaster.

The oil company has agreed the payout to settle a class action raised in the courts.

The money will come from a £12.6bn fund that the company established following the Deepwater Horizon rig explosion in 2010, the worst spill in American history. The company stressed yesterday that the proposed settlement was “not an admission of liability”.

Bob Dudley, BP Group’s chief executive, said: “From the beginning, BP stepped up to meet our obligations to the communities in the Gulf Coast region and we’ve worked hard to deliver on that commitment for nearly two years.

“The proposed settlement represents significant progress toward resolving issues from the Deepwater Horizon accident and contributing further to economic and environmental restoration efforts along the Gulf Coast.”

BP still has to resolve claims by the US government, Gulf states and its partners in the doomed Deepwater Horizon project, in which pressure from a well a mile below the ocean’s surface blew up a massive drilling rig, killing 11 men and spewing oil into the sea for nearly three months.

BP’s £4.9bn deal makes it one of the largest class action settlements. The 2010 spill exposed oil industry failings and forced BP chief executive Tony Hayward to step down.

The Gulf of Mexico spill soiled tidal estuaries and beaches, killing wildlife and shutting vast areas to commercial fishing. After several attempts to cap the well failed, engineers were finally successful on 15 July, halting the flow of oil into the Gulf after more than 85 days.

Following the disaster, the main targets of legal action were BP, Transocean, Halliburton and Cameron International, maker of the well’s failed blow-out preventer.

BP, the majority owner of the well that blew out, was leasing the rig from Transocean. The US government sued some of the companies involved in the drilling project and opened a separate criminal investigation, but that probe has not resulted in any charges. The companies also sued each other, but some of those cases were settled last year. In one pending lawsuit, BP has sued Transocean for at least £25.3bn in damages.