BP: Fictitious spill claims putting us at risk
The group has sought an injunction to stop payouts to companies which its argues are claiming fraudulent or inflated losses from its $8.2bn compensation pot.
Reports said an appeal document recently filed by BP in the US courts argues that businesses from the Gulf coast have been handed millions of dollars for “non-existent, artificially calculated losses”.
The blow-out of the Deepwater Horizon well off the Louisiana coast in 2010 claimed 11 lives and damaged fishing and tourism industries as well as marine and wildlife habitats, forcing BP to agree a multibillion-dollar compensation deal in Apr 2012.
But BP warned in the court filing that it will be “irreparably harmed” unless the compensation system is reformed. The oil giant has reportedly said the cash drain could put its dividend at risk and make it vulnerable to a takeover.
According to reports, BP said it has “been ordered to pay hundreds of millions of dollars — soon likely to be billions — for fictitious and inflated losses”.
BP is said to be planning to ask British prime minister David Cameron to persuade the US government to intervene.
The claim reportedly adds: “If this travesty is allowed to continue, BP will be irreparably harmed and future defendants will be reluctant to settle because they cannot be confident that settlement agreements will be construed textually and fairly.”
In its first-quarter results published last month, BP warned that compensation may be “significantly higher” than the $8.2bn estimate it has set aside, because of claims it has yet to receive and higher-than-expected pay-outs so far.
BP also emphasised that the compensation settlement is “uncapped except for economic loss claims related to the Gulf seafood industry”.
BP’s complaint centres on the way businesses are allowed to compare earnings before and after the spill in favourable ways which appear to inflate losses.
Its complaint reportedly cites a $9.7m payout to a construction company based 322km off the coast of Alabama, even though 2010 was its best year on record.
BP has already disposed of $38bn of assets to cover the known costs of the disaster.
The company did not return calls for comment.
Downing Street said that Mr Cameron has not spoken with BP about their concerns and did not raise the issue with President Barack Obama or other US authorities during his visit to the US this week.
A No 10 spokesman said: “Ultimately this is an issue for BP.
“The prime minister will always listen to the concerns of British businesses and consider any issues raised.”
Meanwhile, European anti-trust investigators searched the offices of price agency Platts and at least one major oil company for a third day, hunting for evidence of possible price manipulation on oil markets, witnesses said.
Authorities on Tuesday raided Platts’ London Canary Wharf bureau and the offices of Statoil, Royal Dutch Shell and BP in the biggest trading probe since the Libor scandal.
With attention focused on Platts’ role in setting oil price benchmarks, the publisher, a unit of McGraw-Hill, is in lockdown during the European Commission’s inspection, say sources familiar with the company.
A team of inspectors is gathering evidence from laptops, the witnesses said.
At issue is whether there was collusion to distort prices of crude, refined oil products and ethanol traded during Platts’ market-on-close (MOC) system — a daily half-hour “window” in which it sets prices.
But Britain will be unable to act against any oil companies found guilty of price manipulation under current laws because they do not include energy benchmarks and punishment would not be doled out retrospectively.
