BP fails to agree to civil settlement on Macondo charges
London (Platts)--19Feb2013/535 am EST/1035 GMT
BP said Tuesday it is ready to defend itself in court over civil
liability charges brought against it in the US over the Macondo oil
spill in the Gulf of Mexico after attempts to date to settle out of
court failed.
BP late last year agreed with the US Department of Justice a $4 billion
settlement over criminal charges against the company, which was approved
by a US judge at the end of January.
However, BP said it has been unable to settle on the civil liability
charges and said it would defend itself in court against allegations of
gross negligence.
"We have always been open to settlements on reasonable terms, failing
which we have always been prepared to defend our case at trial," said
Rupert Bondy, group general counsel of BP.
"Faced with demands that are excessive and not based on reality or
the merits of the case, we are going to trial," Bondy said. "We have
confidence in our case and in the legal team representing the company
and defending our interests."
BP is preparing for the federal civil trial beginning next Monday in the
US District Court for the Eastern District of Louisiana.
This proceeding is the first of at least two phases the court has set
for the trial.
The first phase will be focused on the causes of the Deepwater Horizon
accident, who should be held responsible, and to what degree, BP said.
Judge Carl J Barbier will preside over the trial.
The court will ultimately determine the legal and factual issues at the
heart of the case, including whether BP or any other party was grossly
negligent, BP said.
"Gross negligence is a very high bar that BP believes cannot be met in
this case," Bondy said. "This was a tragic accident, resulting from
multiple causes and involving multiple parties. We firmly believe we
were not grossly negligent."
The April 20, 2010 blowout at BP's Macondo well destroyed Transocean's
Deepwater Horizon drilling rig, killing 11 workers and setting off the
largest marine oil spill in US history.
Before BP installed a sealing cap in mid-July 2010, Macondo had released
an estimated 4.9 million barrels of oil.
'OVERSTATED' SPILL VOLUMES
The second phase, set for September this year, will deal with what BP
calls the "inflated government flow rate estimates" from the Macondo
spill. BP believes the estimate of 4.9 million barrels to be at least
20% too high.
"Although there is inherent uncertainty in this quantification, the
company believes that the government's public estimate of 4.9 million
barrels of oil released is at least 20% overstated," BP said.
"These issues are extremely complicated as a technical matter, and there
is still further analysis to do. But it is clear, based on our analysis
so far, that the government's public estimate is simply wrong."
BP said that whatever the final number of barrels released from the
reservoir is proven to be, BP does not believe that the 810,000 barrels
of oil that the company successfully captured from the Macondo reservoir
without it entering the Gulf of Mexico waters should be considered in
the court's future determination of Clean Water Act penalties.
Under the Clean Water Act, civil penalties are assessed only on oil that
has actually entered the environment and potentially caused harm.
"On the basis that the 4.9 million barrels figure includes an
over-estimate of at least 20%, and given that a further 810,000 barrels
need to be deducted from the volume that flowed from the reservoir, BP
believes that a figure of 3.1 million barrels should be the uppermost
limit of the number of barrels spilled that should be used in
calculating a Clean Water Act penalty," it said.
"In determining the penalty, we believe the court should consider, among
other things, the fact that BP immediately stepped up and acknowledged
our role in the accident. We waived the statutory cap on liability, and
to date, we've spent more than $23 billion in response, clean-up, and
payments on claims," it said.
BP stressed that it had been willing to settle.
"We settled with our partners in the well and with some of our
contractors. In addition, we settled all of the federal government's
criminal and securities claims against the company," Bondy said.
"There are remaining claims which we have been unable to settle on
reasonable terms. Consequently, we are prepared to go to trial and
present our case to Judge Barbier."
BP will be represented at trial by Robert Brock of Covington & Burling
LLP; Hariklia Karis, Andrew Langan and Matthew Regan of Kirkland & Ellis
LLP; and Don Haycraft of Liskow & Lewis.
--Stuart Elliott,
stuart_elliott@platts.com
--Edited by James Leech,
james_leech@platts.com
© 2013 Platts, The McGraw-Hill Companies Inc. All rights reserved.
To subscribe or visit go to:
http://www.platts.com
http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/8159976?WT.mc_id=&WT.tsrc=Eloqua
|