BP faces escalating spill payouts after court ruling

Thu Mar 7, 2013 9:22am EST
 
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By Andrew Callus

LONDON (Reuters) - BP must keep paying certain types of oil spill compensation in much larger amounts and to more parties than it was expecting, according to a court ruling which could add billions to its final bill.

The March 5 ruling, made by the New Orleans court where BP is battling to keep a lid on other fines and penalties, was outlined in the company's annual report.

The decision applies to payments made as part of a settlement stemming from the Deepwater Horizon oil spill in the Gulf of Mexico in 2010 which BP has already agreed, but where the actual amount is uncapped.

BP had earmarked $8.5 billion for payments which included claims for "Economic and Property Damages".

BP said it would appeal the ruling, which upheld the payout administrator's interpretation of the settlement, and which has resulted in more and larger payouts than BP had expected.

"BP strongly disagrees with the ruling of 5 March 2013 and the current implementation of the agreement by the claims administrator," it said.

"BP intends to pursue all available legal options, including rights of appeal, to challenge this ruling."

BP also removed about $800 million from its $8.5 billion estimate for compensation claims under this part of its $42.2 billion of total spill provisions so far.   Continued...

 
A British Petroleum (BP) sign is seen at a petrol station in south London July 29, 2008. REUTERS/Dylan Martinez (BRITAIN) - RTX87R7