BP's $7.8 billion deal may speed payments for U.S. spill

Sat Mar 3, 2012 9:06pm EST
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By Kathy Finn, Andrew Longstreth and Tom Bergin

NEW ORLEANS (Reuters) - The estimated $7.8 billion deal struck by BP Plc with businesses and individuals suing over the massive 2010 Gulf of Mexico oil spill could speed up payments to thousands of claimants and offers lawyers a potential windfall in legal fees.

London-based BP announced the deal on Friday with the Plaintiffs' Steering Committee, or PSC, which represents condominium owners, fishermen, hoteliers, restaurateurs and others who say their livelihoods were damaged by the April 20, 2010, explosion of the Deepwater Horizon drilling rig and subsequent oil spill.

The settlement, which delayed a giant trial that had been set to get under way in a New Orleans federal court on Monday is a step by BP toward resolving its liability in the case, which could stretch into the tens of billions of dollars. But the deal does nothing to settle charges brought by BP's biggest opponent in the trial: the U.S. government.

Eleven people died and 4.9 million barrels of oil spewed from the mile-deep (1.6 km-deep) Macondo oil well in by far the worst offshore U.S. oil spill.

In addition to the Justice Department, BP still faces lawsuits from five U.S. states whose coastlines were oiled, as well as its partners in the ill-fated Macondo well.

U.S. District Judge Carl Barbier in an order late on Friday delayed the trial, saying the settlement "would likely result in a realignment of the parties in this litigation and require substantial changes" to the trial plan.

Barbier, who will preside over the three-part trial that could stretch through 2012, set no definite date for the trial to resume. Barbier would also have to approve the settlement.

BP has already paid out about $6.1 billion to compensate about 220,000 plaintiffs from the Gulf Coast Claims Facility, or GCCF, a trust fund administered by Kenneth Feinberg. The latest settlement will be in addition to that.   Continued...

Fire boat response crews battle the blazing remnants of the offshore oil rig Deepwater Horizon, off Louisiana, in this April 21, 2010 file handout image. REUTERS/U.S. Coast Guard/Files/Handout