Financial News

  • 5 September 2014, 18:16

BP's 'Gross Negligence' Led To Gulf Oil Spill

A federal judge has ruled that BP's reckless conduct led to the worst offshore oil spill in US history - a decision that exposes the oil giant to billions more in civil penalties.

BP was assigned the majority of blame for the 2010 Gulf of Mexico spill by US District Judge Carl Barbier on Thursday.

His ruling means BP now faces fines that are expected to total between $10.3bn (£6.3bn) and $17.6bn (£10.7bn).

Judge Barbier ruled that BP bears 67% of responsibility for the spill, while drilling rig owner Transocean Ltd was assigned 30% of blame.

Halliburton, which served as BP's cement contractor on the Deepwater Horizon rig, was assigned 3% of the blame. The energy services giant announced on Tuesday that it had agreed to pay $1.1bn (£665m) to settle plaintiff claims.

Eleven workers were killed when the rig exploded in April 2010, and millions of gallons of oil spewed into the Gulf while BP scrambled for weeks to seal the well.

Judge Barbier said BP made "profit-driven decisions" during drilling that led to the deadly blowout.

"The Court concludes that the discharge of oil 'was the result of gross negligence or wilful misconduct' by BP," Judge Barbier said in his written ruling.

"BP's conduct was reckless."

"These instances of negligence, taken together, evince an extreme deviation from the standard of care and a conscious disregard of known risks," he wrote in a 153-page ruling.

BP said in a news release that it would appeal the ruling, saying the company "believes that an impartial view of the record does not support the erroneous conclusion reached by the District Court".

The company's shares slumped about 6% after the ruling, reducing BP's market value by $7bn (£4.3bn).

BP has spent more than $24bn (£14.7bn) in spill-related expenses in the wake of the disaster. The company estimated that it will pay a total of $42bn (£25.7bn) to the matter is fully resolved.

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