BP said yesterday in London that progress in resolving outstanding claims arising from the 2010 Deepwater Horizon accident and oil spill the largest in U.S. history – would have a final cost of $61.6 billion or $44.0 billion after tax. BP expects to take an after-tax non-operating charge of around $2.5 billion in its second quarter 2016 results.
On 20 April 2010, a blowout a mile under water propelled oil and gas to the Deepwater Horizon rig, setting it on fire, killing 11 crew members and eventually sinking it. An estimated 3.19 million barrels of crude oil launched into the Gulf of Mexico. Maybe more.
“Over the past few months we’ve made significant progress resolving outstanding Deepwater Horizon claims and today we can estimate all the material liabilities remaining from the incident,” said Brian Gilvary, BP chief financial officer. “Importantly, we have a clear plan for managing these costs and it provides our investors with certainty going forward.”
Gilvary reconfirmed that BP expects to continue to use proceeds of divestments to meet Deepwater Horizon commitments.
A year ago, BP reached agreements to settle outstanding federal, state and local government claims arising from Deepwater Horizon. In the months since, BP has made progress in resolving outstanding claims arising from the Deepwater Horizon disaster that killed workers.
PSC Settlement
The Deepwater Horizon Court Supervised Settlement Program is moving ahead on the remaining economic and property damage claims relating to the 2012 Plaintiffs’ Steering Committee (PSC) settlement, including through simplified and accelerated procedures for processing certain claims. BP’s latest announced charges includes the estimated cost of settling all outstanding business and economic loss claims under that settlement, which are expected to be paid by 2019.
