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BP agrees $7.8bn compensation for Gulf of Mexico oil spill

The company will make settlements with more than 100,000 people hit by the 2010 Deepwater Horizon disaster.

Firefighting ships attempt to put out the flames on the burning rig
Firefighting ships attempt to put out the flames on the burning rig
Image: AP Photo/US Coast Guard

BP HAS AGREED a settlement with more than 100,000 people affected by the 2010 Gulf of Mexico oil spill, with the energy giant expected to pay out around $7.8billion (€5.9billion) in compensation.

The lawsuits were brought by fishermen who lost work, cleanup workers who got sick and others who claimed harm from the Deepwater Horizon disaster, the worst offshore oil spill in the nation’s history.

The momentous settlement will have no cap to compensate the plaintiffs, though BP estimated it would have to pay out about $7.8 billion, making it one of the largest class-action settlements ever.

BP still has to resolve claims by the US government, Gulf states and its partners in the doomed Deepwater Horizon project, in which pressure from a well a mile below the ocean’s surface blew up a massive drilling rig, killing 11 men and spewing oil into the sea for nearly three months. Those claims from the government could add billions more to its tab, and BP has already paid out billions in cleanup costs and to compensate victims.

The US Justice Department, in a statement, said yesterday’s settlement is not the end of the road, by far.

“The United States will continue to work closely with all five Gulf states to ensure that any resolution of the federal law enforcement and damage claims, including natural resources damages, arising out of this unprecedented environmental disaster is just, fair and restores the Gulf for the benefit of the people of the Gulf states,” the agency said.

This dramatic video from aandryiii1 shows the immediate aftermath of the explosion.

BP said it expects the money to come from the $20 billion compensation fund that it previously set up. According to the Deepwater Horizon Oil Spill Trust, current total trust assets are approximately $9.5 billion.

BP’s payout estimate includes what the company internally predicts legal fees for the numerous plaintiffs lawyers in the case will be, though the issue has not yet been discussed between both sides, according to a person with direct knowledge of the settlement terms who spoke on condition of anonymity because those details are confidential.

In January 2011, a presidential commission found that the spill was caused by time-saving and money-saving decisions by BP, Halliburton and Transocean that created unacceptable risk. But the panel also concluded that the mistakes were the result of systemic problems, not necessarily the fault of any one individual.

In September 2011, however, a team of Coast Guard officials and federal regulators issued a report that concluded BP bears ultimate responsibility for the spill. The report found BP violated federal regulations, ignored crucial warnings and made bad decisions during the cementing of the well a mile beneath the Gulf of Mexico.

More: BP and contractors face $45million fine over Deepwater Horizon spill>

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Associated Press

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