Today a BP Plc spokesperson says the oil company will pay a $4.5 billion settlement in connection with the 2010 oil spill that occurred in the Gulf of Mexico. The company will also plead guilty to criminal manslaughter charges in that spill. Eleven workers died in the spill, and company representatives were accused of lying to Congress about how much oil spilled.
CBS News sites “a source close to the case” who says that two employees of BP will also be charged with manslaughter in connection with the 11 deaths, which happened when the Deepwater Horizon oil rig exploded, causing the oil spill. Those two employees will be in addition to the former BP Plc (NYSE:BP) (LON:BP) engineer who faced charges of obstruction of justice in April after being accused of erasing the company’s texted response to the oil spill.
Today’s $4.5 billion settlement includes more than $1 billion in criminal fines, which is the largest criminal fine in the history of the U.S. It also includes several payments to various government agencies, including the National Fish and Wildlife Foundation, the Securities and Exchange Commission, and the National Academy of Sciences. The fine must be paid in five years.
The settlement still must be approved by a federal judge before it can be finalized. BP Plc (NYSE:BP) (LON:BP) could still face civil penalties under various laws like the Clean Water Act. The company also still must resolve billions of dollars’ worth of claims brought by individuals, businesses, and states.
Analysis of BP’s Announcement
Analysts at RBS say the $4.5 billion fine is on the low end of their previous expectations. They also say it’s important to note that there was no mention of gross negligence in the criminal charges. They believe that future civil liabilities that will be either awarded or settled under the Clear Water Act will be between $6 and $21 billion.
According to analysts, the only real negative to today’s announcement from BP Plc (NYSE:BP) (LON:BP) is the fact that the company must plead guilty to criminal charges. This could prevent the company from being eligible to enter into contracts with the U.S. government in the future.