Another Damning BP (BP) Oil Spill Report Could Set Up 'Mother of All Settlements'
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BP (NYSE: BP) is not out of the woods yet for the 2010 Gulf oil spill. According to reports from Reuters Friday, the findings of a second major U.S. government investigation could result in the company putting up another $30 billion to settle criminal and civil claims against it.
The joint Coast Guard and Bureau of Ocean Energy Management, Regulation and Enforcement report on the Macondo well blow-out, released Wednesday, was more damning than the findings of the Presidential panel, released early in the year. The reports, both which clearly laid blame on BP, don't bode well for the company which faces future DoJ or civil lawsuits, experts say.
While BP may seek to drag out litigation like Exxon Mobil (NYSE: XOM) did in the1989 Valdez oil spill case - which took 20 years to resolve - BP's case is not seen as strong.
Early next year, BP faces a civil damages case with Judge Carl Barbier setting a February trial date. Shortly afterward, BP could offer the "mother of all settlements," a Reuters source said.
BP estimates the spill will cost them around $42 billion, and so far has spent around $25 billion.
A lawyer representing some of the claimants believes the company may be forced to pay out another $10-$20 billion to cover economic claims. However, some see the total as much higher.
BP sees paying $3.5 billion in Clean Water Act fines, but if the company is found to be grossly negligent the fines could jump to over $21 billion. Even in a settlement, the fine could be over $10 billion some legal experts argue.
No punitive damages are currently being provisioned by BP, but Judge Barbier has ruled these can be claimed and lawyers see another $5 billion from punitive damages.
All in, BP could have to put up another $30 billion to cover the costs from criminal and civil claims against it.
Some see it even higher. One legal expert said BP should jump at the chance to settle all civil and criminal matters related to the case for $40 billion.
The February 2012 time frame is when BP is expected to start cutting a deal. If claimants aren't being reasonable, however, the company could take the Exxon approach and look to draw out the litigation over a 10-20 year period.
The joint Coast Guard and Bureau of Ocean Energy Management, Regulation and Enforcement report on the Macondo well blow-out, released Wednesday, was more damning than the findings of the Presidential panel, released early in the year. The reports, both which clearly laid blame on BP, don't bode well for the company which faces future DoJ or civil lawsuits, experts say.
While BP may seek to drag out litigation like Exxon Mobil (NYSE: XOM) did in the1989 Valdez oil spill case - which took 20 years to resolve - BP's case is not seen as strong.
Early next year, BP faces a civil damages case with Judge Carl Barbier setting a February trial date. Shortly afterward, BP could offer the "mother of all settlements," a Reuters source said.
BP estimates the spill will cost them around $42 billion, and so far has spent around $25 billion.
A lawyer representing some of the claimants believes the company may be forced to pay out another $10-$20 billion to cover economic claims. However, some see the total as much higher.
BP sees paying $3.5 billion in Clean Water Act fines, but if the company is found to be grossly negligent the fines could jump to over $21 billion. Even in a settlement, the fine could be over $10 billion some legal experts argue.
No punitive damages are currently being provisioned by BP, but Judge Barbier has ruled these can be claimed and lawyers see another $5 billion from punitive damages.
All in, BP could have to put up another $30 billion to cover the costs from criminal and civil claims against it.
Some see it even higher. One legal expert said BP should jump at the chance to settle all civil and criminal matters related to the case for $40 billion.
The February 2012 time frame is when BP is expected to start cutting a deal. If claimants aren't being reasonable, however, the company could take the Exxon approach and look to draw out the litigation over a 10-20 year period.
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