State claims a wild card in BP civil deal on Macondo oil spill

Mon Feb 4, 2013 5:52pm EST
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By Kathy Finn and Braden Reddall

(Reuters) - It is a question that has lawyers and many others on the U.S. Gulf coast buzzing: Will BP strike a massive deal to settle the remaining claims over the Gulf of Mexico well blowout?

BP could be nearing a settlement of federal claims with the U.S. Department of Justice, but people tracking the case closely say the company and coastal states, especially Louisiana, might still be far apart.

So unless the talks with the states quicken or the judge delays the process in the hope a far-reaching deal will happen, the civil trial of the year will get under way on February 25 in New Orleans.

The chance of a DOJ settlement did increase somewhat on January 29 when a judge approved BP Plc's guilty plea on charges, including felony manslaughter and lying to Congress, for its role in the Macondo well blowout that killed 11 workers and gushed 4.9 million barrels of oil into the Gulf.

David Uhlmann, a University of Michigan professor and former head of the DOJ's environmental crimes section, has little doubt about BP's wishes.

"BP does not want to re-live the nightmare of the Gulf oil spill for weeks and months in a U.S. courthouse," said Uhlmann, noting the financial risk was not one-sided because awards under the Clean Water Act could range from $5 billion to $21 billion. "Both sides have too much to lose by going to trial."

That is why many experts believe a deal is bound to happen - at least with the U.S. federal government.

The other parties include thousands of private companies and individuals whose cases, along with those of the coastal states, were consolidated under the management of U.S. District Judge Carl Barbier. A separate settlement BP estimates at $7.8 billion was reached with many, but not all, of the private plaintiffs.   Continued...

A BP petrol station sign is seen at dawn in west London October 25, 2011. REUTERS/Toby Melville