British energy giant BP plc (BP: Quote,BP.L) has filed a motion on Friday seeking to cut the civil liabilities it faces according to the Clean Water Act (CWA) related to the 2010 Deepwater Horizon accident in the Gulf of Mexico that claimed 11 lives and led to the worst offshore oil spill in U.S. history.
BP is contesting the report issued by the Flow Rate Technical Group (FRTG) on August 2, 2010 that estimated 4.9 million barrels oil had escaped the reservoir into the environment.
BP does not dispute the large amount of oil that was discharged into the Gulf of Mexico, but it does not want to be liable for the 810,000 barrels of oil that it recovered after the spill. This estimate of oil collected back has already been acknowledged by the U.S. government.
Under the CWA, penalties can reach a maximum of $4,300 per barrel and are assessed only on oil that has actually entered the environment and caused harm. The total penalties will reach a maximum of $21 billion, based on the U.S. government’s estimate that 4.9 million barrels leaked.
However, BP is seeking a $3.48 billion reduction in penalties based on the credit it should receive for collecting back 810,000 barrels of oil.
In mid-November, BP agreed to pay about $4.5 billion over a span of six years to the U.S. government to settle criminal and securities claims over the 2010 Deepwater Horizon accident.
The total settlement includes about $1.26 billion in criminal fines, about $2.4 billion to the National Fish and Wildlife Foundation, $350 million to the National Academy of Sciences. The settlement is subject to U.S. federal court approval.
BP pleaded guilty to 11 felony counts of Misconduct or Neglect of Ships Officers relating to the loss of 11 lives, one misdemeanor count under the Clean Water Act.
The Deepwater Horizon rig drilling BP’s Macondo well sank two days after the April 20, 2010 explosion and led to an oil spill of about 200 million gallons that impacted beaches and the fishing sector. The well was finally capped on July 15 that year.
The government also sued the rig’s owner Transocean Ltd. (RIG: Quote), and contractor Halliburton Co. (HAL: Quote), but legal proceedings led to BP taking the blame for the accident.
BP closed Friday’s regular trading session at $44.48, down $0.53 or 1.18% on a volume of 6.85 million shares. Meanwhile, BP.L closed on the LSE at 461.95 pence, up 0.90 pence or 0.20% on a volume of 20.99 million shares.
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by RTT Staff Writer
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