BP Plc has been hit by more than 2,200 new lawsuits seeking payback for the 2010 Gulf of Mexico oil spill in the past few weeks as individuals, companies and government bodies rushed to stake their claim before their right to do so expired.
The British oil company, whose deepwater Macondo well ruptured on April 20, 2010, killing 11 men and spilling crude into the sea for weeks, revealed the number of new claims made since March 6 in its first-quarter results on Tuesday.
The United States Oil Pollution Act of 1990, under which most of the new lawsuits were registered, has a three year statute of limitations which could make bringing further legal action difficult after the third anniversary of the disaster.
BP said it would be applying to have the new legal challenges consolidated into a trial that is already under way in New Orleans.
The first phase of the trial of BP and its partners in the well, Transocean and Halliburton, ended earlier in April, but the judge, Carl Barbier, has yet to rule on the degree of blame that will be apportioned to each party and on the level of negligence that will be applied.
Both decisions could have a big impact on the size of BP’s final liability, already measured in tens of billions of dollars. His ruling, to be made without a jury as is traditional under U.S. maritime law, could come this summer.
$1.7 BILLION CLAIMS HEADROOM
BP also revealed that its $20 billion spill fund – some of which is earmarked for compensation claims it has already agreed to pay – has only $1.7 billion still unassigned.
The company is fighting to keep a lid on so-called Business Economic Loss (BEL) claims which are being paid out of the fund at a higher rate and to more businesses than it expected.
In the results statement, it raised its estimate of such compensation payouts it can already quantify to $8.2 billion from $7.7 billion previously.
The estimate has been fluctuating up and down since last year, but BP has continued to stress it does not include any BEL claims that have yet to be made or processed. It has said that should BEL claims balloon beyond what the $20 billion fund can pay, it will have to take new charges against its profits on top of the $42.2 billion overall provision it has already set aside.
Was this article valuable?
Here are more articles you may enjoy.