BP has agreed to pay $4.5bn (£2.84bn) and plead guilty to charges of misconduct to settle all claims relating to the 2010 Deepwater Horizon disaster, which caused the worst offshore oil spill in US history.
The total settlement over the Gulf of Mexico spill, which resolves all charges with the Department of Justice (DoJ) and with the Securities and Exchange Commission (SEC), will be paid over the next six years.
The April 2010 explosion at the Deepwater Horizon rig offshore Mexico killed 11 workers and spewed around 4.9m barrels of oil into the sea over three months.
As part of the resolution, BP will pay $4bn over five years to settle all criminal claims. Within this settlement, the oil major will also shoulder $1.256bn in criminal fines, which is understood to be the largest levy in US history.
It will also pay $525m over three years to the SEC.
In addition to the penalties, BP has agreed to operate under probation in the US for the next five years.
BP said it would continue to defend itself “vigorously” against the remaining civil claims, and it would contest allegations of gross negligence in the civil cases.
These include claims under the Clean Water Act – for which BP could pay damages to a maximum of $21bn – and other claims for Natural Resources Damages.
On top of these claims, the oil giant still faces miscellaneous private claims pending in other federal and state courts.
As part of yesterday’s settlement, the British oil major will plead guilty to 11 charges of misconduct or neglect of ships officers relating to the loss of workers’ lives at Macondo, two misdemeanour counts and one felony related to obstruction of Congress.
Chief executive Bob Dudley, who replaced Tony Hayward as chief executive in October 2010, maintained that BP would only settle on “reasonable” terms and said that it had accepted responsibility for its actions over Macondo.
“Since the spill, we have worked hard to rebuild confidence in the company,” Dudley said yesterday. “We take seriously not only our commitment to safety and operational excellence but also our communications with stakeholders, including the public, the government and our investors.”
BP has so far divested around $35bn worth of assets, as part of a $38bn asset sale programme planned to meet the costs associated with the oil spill.
It has also spent more than $14bn on clean-up costs and $9bn in further claims, and has put aside $20bn in a spill trust fund.
In a filing to the DoJ in September, the US government accused BP and Deepwater Horizon vessel owner Transocean of “gross negligence and willful misconduct” surrounding their operations in the Gulf of Mexico, which led to the explosion of Deepwater Horizon.
BP shares closed down 0.08 per cent yesterday at 425.4p, with the announcement coming minutes before UK markets closed.