BP asks for lower fine in penalty phase of Gulf spill trial

Tue Jan 20, 2015 8:10pm EST
 
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By Jonathan Kaminsky

NEW ORLEANS (Reuters) - BP Plc, citing low oil prices, tried to whittle away at $13.7 billion in potential fines under the Clean Water Act on Tuesday as the penalty phase started in its trial over the 2010 Gulf of Mexico oil spill.

BP said its fine should be modest as it took extensive steps to mitigate the worst offshore disaster in U.S. history and that the defendant named in the case, BP's exploration and production unit, known as BPXP, cannot afford a big penalty.

"There has been no collapse of the ecosystem," BP lawyer Mike Brock said in opening statements, contending that the Gulf has been more resilient than thought. Environmental groups say it could take decades for the Gulf to recover.

Brock said the penalties should take into account BPXP's ability to pay, and not be tied to the balance sheet of its parent company.

He said a 60 percent drop in oil prices since June has slashed BPXP's value to about $5.1 billion, down from $16 billion just months ago.

The government knows that "BPXP cannot afford a penalty in the range that they are asking for, and so that's why they are saying look to the parent," Brock said.

Steve O'Rourke, the government's lawyer, said BPXP and BP are effectively the same company. He urged a fine of $11.7 to $13.7 billion.

"BP's litigation position in this phase suggests that it still doesn't understand the gravity of what's happened here, they continue to focus on their own hardships rather than the hardships of the environment and the people," O'Rourke said.   Continued...

 
People arrive at the Hale Boggs Federal Building on the opening day of the penalty phase in the case against BP Plc for the 2010 Gulf of Mexico oil spill, in New Orleans January 20, 2015. .  REUTERS/Lee Celano