Here are the general terms of the agreement reached in July:
- A civil penalty of $5.5 billion related to violations of the Clean Water Act payable over 15 years
- A natural resources damages payment of $7.1 billion to the federal government and five Gulf states—Alabama, Florida, Louisiana, Mississippi and Texas—also payable over 15 years
- A total of $4.9 billion over a period of 18 years to settle other claims from the five Gulf states
- Up to $1 billion to resolve claims from more than 400 local governments
The good news for BP was that it could have been much worse. BP faced a fine of up to $18 billion for violations of the Clean Water Act alone. Had the company been found grossly negligent and had a court accepted the government estimate of 4.2 million barrels spilled, BP could have paid $4,300 per barrel.
Under the July agreement, the company is paying about $1,300 per barrel, much closer to the lower limit of the Clean Water Act’s $1,100 per barrel negligence penalty than to the $4,300 per barrel maximum. In January of this year, a federal judge set the total number of barrels spilled at 3.19 million, which could have led to a penalty payment of $13.7 billion under the Clean Water Act.
Through the end of the second quarter of this year, BP had booked $54.6 billion in pretax charges related to the disaster. That total presumably includes the $18 billion agreement.
In Monday’s premarket trading, BP’s stock traded up 1.8% at $33.11, after closing at $32.52 on Friday. The 52-week range is $29.35 to $43.85.
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