By Daniel Gilbert
A federal judge ruled Thursday that BP PLC is liable for
spilling just over 3 million barrels of crude into the Gulf of
Mexico in the 2010 Deepwater Horizon disaster, 24% less than
federal prosecutors had claimed.
The ruling means that BP faces a maximum penalty of $13.7
billion under the U.S. Clean Water Act, down from the $18 billion
sought by the Justice Department.
The decision by Judge Carl Barbier surprised analysts following
the case, coming days before BP is set to appear in his court for a
related trial on how much it should pay for each barrel spilled.
That tranche of the complex case, which begins on Tuesday, will
determine the total fine under the Clean Water Act.
Thursday's decision narrows the range of penalties BP could
face, which could make a settlement more feasible, said Tom Claps,
a legal analyst for Susquehanna Financial Group. But the judge is
"not giving the parties a lot of time to sit down" to negotiate, he
added.
Both BP and the Justice Department said they are reviewing the
ruling. BP has argued that its efforts to control and clean up the
oil spill should result in a penalty far below the maximum.
The Deepwater Horizon rig exploded on April 20, 2010, leaving 11
crewmembers dead and unleashing the largest offshore oil spill in
U.S. history.
In September, Judge Barbier ruled that BP acted recklessly
leading up to the rig explosion and oil spill, exposing the company
to a maximum pollution penalty of $4,300 a barrel. BP has asked
that the per-barrel fine be capped at $3,000.
The ruling on Thursday concluded that 4 million barrels of oil
spilled into the Gulf, and that after taking into account the crude
that was skimmed off the surface, BP is liable for a fine on 3.19
million barrels.
The company wasn't "grossly negligent, willful, or wanton" in
its efforts to control the spill, Judge Barbier wrote.
BP had argued it should be liable for 2.45 million barrels,
while federal prosecutors claimed a fine should be based on 4.2
million barrels.
BP has set aside $3.5 billion to pay for penalties under the
Clean Water Act. It has already spent $43 billion on spill-related
costs, including criminal and civil settlements and $14 billion for
the Gulf cleanup.
The ruling also has implications for Anadarko Petroleum Corp.,
which owned 25% of the well drilled by the Deepwater Horizon
rig.
Anadarko's maximum liability had been $4.6 billion, based on the
government's estimate of how much crude spilled. After Thursday's
ruling, the company faces up to $3.5 billion.
"Today's ruling regarding the volume doesn't change the Court's
previous findings that we had no direct operational involvement,"
an Anadarko spokesman said.
Anadarko contends it should pay no penalty under the Clean Water
Act. It has set aside $90 million for a potential fine.
Write to Daniel Gilbert at daniel.gilbert@wsj.com
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