ENERGY giant BP has agreed to pay a record US$18.7bn fine to settle its legal battle with the US Department of Justice (DoJ) over the 2010 Deepwater Horizon oil spill.
The agreement, which still needs to be approved by the courts, covers fines under the Clean Water Act and natural resources damages. It also covers claims by Alabama, Florida, Louisiana, Mississippi and Texas as well as more than 400 local government groups.
The money will be paid out over the course of 18 years, and will add to the US$43.8bn BP had previously set aside for criminal and civil penalties and cleanup costs. The company says its total costs relating to the accident now stand at US$53.8bn.
BP CEO Bob Dudley says that the settlement represents "a realistic outcome which provides clarity and certainty for all parties."
"For BP, this agreement will resolve the largest liabilities remaining from the tragic accident and enable BP to focus on safely delivering the energy the world needs," he continues.
"For the United States and the Gulf in particular, this agreement will deliver a significant income stream over many years for further restoration of natural resources and for losses related to the spill."
Should the settlement to ahead, BP will be paying significantly less than it could have in a worst-case scenario. The maximum Clean Water Act fine alone could have reached US$17.6bn.
However, the DoJ says it is also happy with the settlement as it stands.
Attorney General Loretta Lynch says: "If approved by the court, this settlement would be the largest settlement with a single entity in American history; it would help repair the damage done to the Gulf economy, fisheries, wetlands and wildlife; and it would bring lasting benefits to the Gulf region for generations to come."
Almost 5m bbl of oil spilled out into the Gulf of Mexico after an explosion ripped through theDeepwater Horizon rig five years ago, killing 11 workers. It remains the worst oil spill in US offshore history, and has not only cost BP tens of billions of dollars, but has left it mired in legal issues and damaged its reputation worldwide.