Carl Barbier, a US federal judge in New Orleans has issued final approval for an estimated $20 billion settlement, after years of litigation over the 2010 Gulf of Mexico oil spill in which it agreed to pay up penalties to the U.S. government and five states.
The settlement which was first announced in July, includes $5.5 billion in civil Clean Water Act penalties and billions in additional fines for environmental damage. The environmental settlement is the biggest in US history and will be paid over a duration of 16 years.
US attorney General Loretta Lynch said:
“Today’s action holds BP accountable with the largest environmental penalty of all time while launching one of the most extensive environmental restoration efforts ever undertaken.”
The federal judge, Carl Barbier had previously ruled that BP had been “grossly negligent” in rig explosion which spilled 134m-gallons of oil and killed 11 employees.
At the time of the ruling BP’s chief executive, Bob Dudley, said the settlement was a “landmark step forward for all parties” despite the reporting a $6.3 billion quarterly loss.
“The numbers are huge but we can now plan for the future. That is a state we haven’t been in for five years,” Dudley said in July.
Since the initial settlement was decided, BP has seen its annual loss grow to $6.5 billion, its worst year in history. As a result the business has shed 7,000 employees however Dudley did receive a 20% pay hike boosting his compensation to $20 million last year.
Despite the settlement now being closed it may not be the end of BP’s legal battles as it faces a new lawsuit from Mexico over the spill. The case has been brought against the company by Sinaloa Class Actions, a law firm which specialises in environmental disasters. They are claiming the explosion caused oil to reach hundreds of villages across Mexico which are reliant on fishing and tourism to get by.
Monday’s settlement had a muted affect on shares due to the settlement previously being announced in 2015.