BP in line to pay $25bn in US spill case
BP is likely to agree to pay the US Department of Justice $20-$25bn (£16.1bn) to settle all charges around the Gulf of Mexico oil spill, according to a leading analyst – a prediction that is at least twice what the company has set aside.
Martijn Rats, head of European oil research at Morgan Stanley, said he saw a 70-80 per cent chance that the two sides would agree a deal on civil and criminal charges surrounding the 2010 disaster sometime between BP’s full year results on 7 February, and the scheduled start of legal hearings in New Orleans on 27 February.
BP sources have said that talks are ongoing with the Department of Justice about a possible settlement and that the London-based company’s board has shifted to weekly meetings to discuss progress.
The estimated level of settlement in the Morgan Stanley note is much higher than other analysts have predicted, and around double the amount BP has taken a provision for.
Chief executive Bob Dudley has said BP would like to settle, although not at any price.
BP has officially made no comment over the likelihood or size of a settlement of the charges surrounding the blast on the Deepwater Horizon and subsequent spill. BP has the money to pay a $20-25bn settlement – it is sitting on cash pile of more than $20bn and has billions of dollars worth of assets on the block as part of its restructuring.