Judge Rules BP Was ‘Grossly Negligent’ in Gulf Oil Spill

September 4, 2014

BP Plc acted with gross negligence in setting off the biggest offshore oil spill in U.S. history, a federal judge ruled, handing down a long-awaited decision that may force the energy company to pay billions of dollars more for the 2010 Gulf of Mexico disaster.

U.S. District Judge Carl Barbier held a trial without a jury over who was at fault for the environmental catastrophe, which killed 11 people and spewed oil for almost three months into waters that touch the shores of five states. The case also included Transocean Ltd., Halliburton Co., though the judge didn’t find them as responsible for the spill as BP.

“BP’s conduct was reckless,” Barbier wrote in a decision today in New Orleans federal court. “Transocean’s conduct was negligent. Halliburton’s conduct was negligent.”

Barbier apportioned fault at 67 percent for BP, 30 percent for Transocean and 3 percent for Halliburton. BP shares rose 1.9 pounds to 485.65 at 3 p.m. London time.

The ruling marks a turning point in the legal morass surrounding the causes and impact of the disaster. Four years of debate and legal testimony have centered on who was at fault and how much blame each company should carry.

A coalition of plaintiffs including the federal government, five Gulf of Mexico states, banks, restaurants, fishermen and a host of others have pursued redress for their losses. While today’s ruling provides a partial answer, appeals may mean it will be years before final penalties are settled.

BP, which may face fines of as much as $18 billion, has set aside $3.5 billion to cover those penalties. The company had taken a $43 billion charge to cover all the costs related to the spill, according to a July 29 earnings statement. The ultimate cost is “subject to significant uncertainty,” BP said.

Barbier today didn’t rule on how much oil was spilled, a key factor in determining the extend of BP’s liability.

Topics Legislation Energy Oil Gas

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