BP and plaintiffs nearing $14bn deal

BP Plc and lawyers for businesses and individuals suing over the 2010 Gulf of Mexico oil spill are near a $14bn (€10.64bn) accord to be funded with money set aside for out-of-court settlements, according to people familiar with the talks.

BP would close its $20bn Gulf Coast Claims Facility and shift the remaining $14bn to plaintiffs hurt by the disaster, the largest offshore spill in US history, the sources said. Such a deal would not include fines by the federal government that could reach $17.6bn, lawsuits by state governments or claims between BP and partner companies involved in the disaster. BP shares rose almost 2% on news of the potential deal to their highest in more than a year.

The Apr 2010 Macondo well blowout destroyed the Deepwater Horizon rig, killed 11 workers and sent more than 4 million barrels of oil spewing into the Gulf over three months. It spawned hundreds of suits against London-based BP; Vernier, Switzerland-based Transocean Ltd, owner and operator of the doomed rig; and Houston-based Halliburton Co, provider of cementing services at the site.

“They could be about 90% or 95% done and now they have to go that last yard, which is always the toughest,” said Carl Tobias, who teaches mass-tort law at the University of Richmond in Virginia. “There could be an awful lot of money that is still in play or provisions that are hard to swallow for one side or the other.”

The discussions between the plaintiffs and BP are nearing completion, said the sources.

The progress allowed BP to persuade a federal judge in New Orleans to delay for a week a multibillion-dollar liability trial over the spill that was set to begin yesterday. BP asked for extra time to allow talks to continue.

David Falkenstein, a spokesman for the lead plaintiffs’ lawyers in the case, did not return calls seeking comment. Ellen Moskowitz, BP spokeswoman, declined to comment on the proposed accord.

— Bloomberg