BP shares rise after Deepwater Horizon compensation deal
Shares in BP have risen by 2 per cent after the oil giant agreed a
£4.9 million deal with 110,000 businesses and individuals affected by the
Deepwater Horizon disaster.
BP could still face a fine of up to £11 billion if found grossly negligent in a federal case brought by the US Department of Justice under the Clean Water Act, but the compensation agreement is thought to be lower than its 'worst case scenario', and is a crucial step towards removing uncertainty about the business.
Following the announcement of the deal, BP's share price rose more than 2 per cent to 509p, with City analysts saying it puts BP in a stronger position to negotiate with the Department of Justice.
Stuart Joyner of Investec said: "Despite the tough rhetoric, the hope will be that the government will now settle… BP can now argue to have (pretty much) completed the remediation and compensation process to the environment and individuals.”
BP chief executive Bob Dudley said: “From the beginning, BP stepped up to meet our obligations to the communities in the Gulf Coast region and we've worked hard to deliver on that commitment for nearly two years.
“The proposed settlement represents significant progress toward resolving issues from the Deepwater Horizon accident and contributing further to economic and environmental restoration efforts along the Gulf Coast.”
The 2010 Deepwater Horizon spill contaminated vulnerable tidal estuaries and beaches, killed countless wildlife and forced commercial fishing to temporarily cease across vast areas of the Gulf of Mexico.
The spill brought numerous oil industry failings to light, forcing BP chief executive Tony Hayward to step down.
BP has so far paid out £4.7 billion in clean-up costs and compensation.
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