Judge accepts BP's proposed $4 bil Macondo settlement with US
government
New Orleans (Platts)--29Jan2013/119 pm EST/1819 GMT
A federal judge on Tuesday approved a $4 billion settlement hammered out
between BP and the US government over the 2010 Macondo disaster in the
Gulf of Mexico.
US District Court Judge Sarah Vance issued the ruling after hearing
testimony from relatives of those killed in the explosion, several of
whom said the settlement was too lenient.
Vance said the plea deal -- under which the company pleaded guilty to 14
criminal counts -- provides adequate deterrence against the lax safety
that BP agrees was the cause of the explosion.
"The plea agreement holds BP accountable for its crimes," she said. 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.
A BP executive started off Tuesday's hearing by apologizing to relatives
of the 11 men killed.
"BP understands and acknowledges our role in that tragedy, and we
apologize," said Luke Keller, a BP America vice president.
The judge said one reason she approved the settlement was that, if the
case instead went to trial, there was a "significant risk" that the
government would collect only a small fraction of the $4 billion in
fines and penalties that BP has now committed to pay. Vance said she was
concerned that the government would likely collect roughly $8 million if
the case went to trial.
Tuesday's hearing came one day before two US government contracts BP has
to supply fuel to the military are set to expire. The two contracts are
worth nearly $1 billion combined.
Vance noted that the company's guilty plea put in jeopardy BP's
eligibility to secure such government contracts. BP has been on hold
until the company can prove to the US that it is a reliable contractor.
Suspending a company from government contracts after a conviction or
guilty plea is a standard action under the US suspension and debarment
regulations.
--Doug Simpson, newsdesk@platts.com
--Edited by Kevin Saville,
kevin_saville@platts.com
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