BP resigned to trial over Gulf of Mexico oil spill
BP has poured cold water on the prospects of settling a crucial court case due to begin in New Orleans on Monday that would determine its level of responsibility for the Gulf of Mexico oil spill.
After months of wrangling with the US government ahead of the New Orleans hearing, the company appeared to throw in the towel today, declaring itself ready for the trial.
“Faced with demands that are excessive and not based on reality or the merits of the case, we are going to trial,” said BP group general counsel Rupert Bondy. “We have always been open to settlements on reasonable terms, failing which we have always been prepared to defend our case at trial.”
Although BP reiterated that it is still prepared to agree a settlement it regards as reasonable, analysts said today’s announcement indicated that it had effectively given up hope and that a deal with the US government seemed out of reach.
“It sounds like the government has made a proposal of gross negligence and won’t settle without BP admitting that. But BP won’t accept that,” said an analyst at Sanford C Bernstein. The issue of whether BP was negligent or grossly negligent lies at the centre of the complex court case. If BP is found to have been grossly negligent, its potential fine would soar, pushing its maximum penalty under the Clean Water Act alone to $21 billion (£13.6 billion) from $4.5 billion.
The trial will also cover local and state government economic restoration claims and damage to natural resources.
The first part of the trial will focus on the causes of the 2010 accident, which resulted in 11 deaths, as well as who should be held responsible. The second will determine how many barrels of oil were spilled into the Gulf, which will also have a bearing on BP’s eventual payout.
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