BP shares rose to the top of Footsie this afternoon as uncertainty was removed as it reached a £12bn, or US$18.7bn, settlement over the disastrous 2010 Gulf of Mexico oil spill
Crude oil covered shorelines of Alabama, Florida, Louisiana, Mississippi and Texas
BP (LON:BP.) shares rose to the top of Footsie this afternoon as uncertainty was removed as it reached a £12bn (or US$18.7bn) settlement over the disastrous 2010 Gulf of Mexico oil spill.
The agreed sum, to be spread over 18 years, is with the US Department of Justice and is reportedly the largest amount paid by a single company in US history.
The oil titan's shares added 4.47% to 437.9p following the news.
The agreement with the states of Alabama, Florida, Louisiana, Mississippi and Texas also includes settlement of claims made by more than 400 local government entities, BP told investors.
BP said costs associated with the spill have already topped US$43bn.
Bob Dudley, BP's group chief executive, told investors: "This is 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."
Chairman Carl- Henric Svanberg added: "In deciding to follow this path, the board has balanced the risks, timing and consequences associated with many years of litigation against its wish for the company to be able to set a clear course for the future."
The spill saw more than 125 million gallons of oil spewed into the sea after an explosion at the Deepwater Horizon oil rig in 2010. Eleven oil workers died.
The extent of the ensuing natural disaster and the length of time it went on for surprised and dismayed around the globe.
Unsurprisingly, the legal wranglings since then have rumbled on for years.
The payments are split up as follows:
BP will pay the US a civil penalty of US$5.5 billion under the Clean Water Act over 15 years, while US$7.1 billion goes to the US and the five Gulf states over 15 years for natural resource damages.
This is in addition to the US$1bn already committed for early restoration.
The relevant US BP subsidiary will also set aside a further US$232 million to cover any further natural resource damages that are unknown at the time of the agreement.
And US $4.9 billion will be paid over 18 years to settle economic and other claims made by the five Gulf Coast states.
Finally, up to US$1 billion will be paid to resolve claims made by more than 400 local government entities.