BP on Wednesday reached settlements to resolve billions of dollars of claims from the 2010 Gulf of Mexico oil spill and asked a judge for a long delay in any trial over remaining disputes stemming from the disaster.
The London-based oil company expects under the agreements to pay $7.8 billion to resolve economic, property and medical claims by more than 100,000 individuals and businesses.
That payout would make the accord one of the largest class-action settlements in U.S. history. There is no cap, and the ultimate payout might be higher or lower than BP projects.
“Neither side will receive everything it wants,” but the settlements are “more than fair, reasonable and adequate” and could avert a decade of litigation, BP and plaintiffs’ lawyers said in papers filed in federal court.
Friday is the second anniversary of the explosion of the Deepwater Horizon drilling rig, which killed 11 workers and triggered the largest U.S. offshore oil spill from BP’s ruptured Macondo well. About 4.1 million barrels of oil were spilled and not cleaned up, the U.S. government has estimated.
“States represent millions of citizens, and they deserve their day in court,” said Alabama Attorney General Luther Strange, who coordinates state interests with his Louisiana colleague James “Buddy” Caldwell. “I think, quite frankly, that BP is not going to focus on a comprehensive settlement until it is up against a trial deadline.”
Strange said he is unaware of any ongoing talks between the two states and either BP or its drilling partners.
“BP made a commitment to help economic and environmental restoration efforts in the Gulf Coast,” Chief Executive Bob Dudley said in a statement. “This settlement provides the framework for us to continue delivering on that promise, offering those affected full and fair compensation, without waiting for the outcome of a lengthy trial process.”
In a separate statement, Stephen Herman and James Roy, lawyers on the Plaintiffs’ Steering Committee, said the settlement holds BP “fully accountable.”
Lawyers for the plaintiffs are seeking up to $600 million to cover fees and costs, including a $75 million interim award. These are separate from amounts paid to victims.
BP still faces tens of billions of dollars of potential claims from the U.S. government; the Gulf states; and drilling partners Transocean Ltd., which owned the rig, and Halliburton Co., which provided cementing services.
About 109,000 condominium owners, hotel and resort operators, restaurateurs, shrimpers and others might be eligible to recover on economic and property claims, court papers show.
The medical settlement addresses claims by people made ill from exposure to oil or chemical dispersants. It covers cleanup workers and residents of beachfront or wetland areas, and allows people who develop symptoms later to sue BP at that time. About 16,000 plaintiffs have submitted claims, court papers show.
Victims who are unhappy with the settlements may opt out and pursue their claims separately.
U.S. District Judge Carl Barbier is scheduled to consider preliminary approval of the accords around Nov. 8, with final clearance to come later. Barbier plans to meet privately with the parties on May 3.
If BP wins a trial delay, the schedule suggests that any trial on federal and state government pollution claims, claims against BP’s drilling partners, and claims among BP and those partners would not start until well into 2013, if not later.