May 19, 2024

Judge Approves BP Criminal Settlement Over Gulf Spill

Several dozen people gave emotional testimony and submitted letters to Judge Sarah S. Vance, of Federal District Court in New Orleans, requesting that she reject the plea agreement reached last November. Some wanted additional financial compensation, while others requested stronger punishment for BP supervisors or a more powerful apology.

“If I had my wish,” wrote Ashley Manuel, daughter of Keith Blair Manuel, one of the 11 rig workers who died, “it would be that the three representatives from BP who sat in my grandparents’ living room and lied to my face about the accident would sit in jail and feel the same pain and loss I feel.”

At the hearing on Tuesday, Luke Keller, a vice president of BP America, apologized to the families. “BP understands and acknowledges its role in that tragedy, and we apologize — BP apologizes — to all those injured and especially to the families of the lost loved ones,” Mr. Keller said. “BP is also sorry for the harm to the environment that resulted from the spill, and we apologize to the individuals and communities who were injured.”

Had the judge not accepted the plea agreement, the company would have faced a long and expensive trial, potentially resulting in tougher penalties.

The company’s stock price, which fell roughly by half after the accident, has recovered more than 40 percent of its loss over the last three years. The company has sold off billions of dollars of assets to pay for damages from the accident and is now a smaller company, but still one focused on drilling in the Gulf of Mexico. The company’s shares rose on the news of the judge’s decision, with its American shares ending the day at $45.21, up almost 2 percent.

The company said it had already paid out more than $24 billion on various settlements and cleanup efforts.

The two top BP officers aboard the Deepwater Horizon drilling rig, Robert Kaluza and Donald Vidrine, were charged with manslaughter in connection with each of the men who died, and David Rainey, a former vice president, was charged with obstruction of Congress and making false statements for understating the rate at which oil was spilling from the well.

A low-level engineer, Kurt Mix, was previously charged with obstruction of justice for deleting text messages about company estimates of the spill flow rate.

Those individual cases are still pending.

Although BP has resolved the criminal charges against the company, it still faces sizable pollution fines before it can put the accident behind it. A settlement with the Justice Department has so far been elusive, and a trial to resolve the remaining civil litigation is scheduled for Feb. 25 in New Orleans.

Under the Clean Water Act, the company faces potential civil fines of $5 billion to $21 billion, based on a government estimate that 4.9 million barrels of oil were released from the Macondo well. The higher fines could be applied if the company were found to be grossly negligent in the spill.

Attorney General Eric H. Holder Jr. has publicly said that the Justice Department is committed to proving the company was grossly negligent. The company does not accept that assessment, contending that the accident was in part the fault of two of its contractors: Transocean, the rig owner and operator, and Halliburton, which handled the cement job on the well.

Transocean agreed this month to settle civil and criminal claims with the federal government and pay $1.4 billion in penalties. Halliburton has not reached any civil or criminal settlements related to the accident.

BP has also argued that the government spill estimate is too high, and company lawyers this month said in a filing to United States District Judge Carl J. Barbier that an estimated 810,000 barrels of escaped oil that it collected should not be counted toward any Clean Water Act fines. A ruling in the company’s favor could reduce fines by $891 million to $3.5 billion.

The company announced some changes to its management team on Tuesday, including the promotion of John Mingé, who has led operations in Alaska, to chairman and president of BP America. He will succeed Lamar McKay, who will now head BP’s upstream business.

Bob Fryar, the executive vice president for production, will become the new executive vice president for safety and operational risk. Officials at BP said the moves did not represent a fundamental change in direction.

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