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BP Agrees To Pay A Record $4.5 Billion Fine For That Huge Oil Spill In The Gulf Mexico Two Years Ago
November 15, 2012
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Remember that giant oil spill in the Gulf of Mexico a couple of years ago?

Well today, BP - British Petroleum - agreed to pay a fine of $4.5 billion in a settlement with the U.S. government.

It's the biggest corporate criminal penalty in American history.

The U.S. Department of Justice has imposed a $4 billion fine, to be paid over five years.
BP will also pay $525 million to the Securities and Exchange Commission over a period of three years.

As well, BP has pleaded guilty to criminal charges, including 11 felony counts of misconduct related to the deaths of 11 men.

They were killed in the oil rig explosion that caused the spill.

BP also pleaded guilty to a felony count of obstruction of Congress in the investigation into the explosion.

"All of us at BP deeply regret the tragic loss of life caused by the Deepwater Horizon accident as well as the impact of the spill on the Gulf coast region," said Bob Dudley, BP's chief executive.

"From the outset, we stepped up by responding to the spill, paying legitimate claims and funding restoration efforts in the Gulf. We apologise for our role in the accident, and as today's resolution with the US government further reflects, we have accepted responsibility for our actions."


The Deepwater Horizon disaster happened about 50 miles off the coast of Louisiana.

The well on the ocean floor released an estimated 206 million gallons of crude into the Gulf of Mexico over 87 days.

All that oil killed wildlife, severely damaged the environment, and forced large areas of the Gulf to shut down commercial fishing.

After several failed attempts, engineers finally managed to cap the well on July 15, 2010, stopping the flow of oil.


After the spill, President Obama also ordered a temporary ban on deep water drilling, to give officials and the oil industry time to make it safer and come up with better disaster plans.

BP launched its own investigation after the explosion. If found that "multiple companies, work teams and circumstances" were to blame for the accident.

Other companies involved included Transocean, which owned the oil rig and was responsible for the safety valve known as the blowout preventer.

Halliburton was also involved, as it provided cementing services.

BP hasn't reached a settlement with those companies yet. A civil trial to determine negligence is due to start in New Orleans in February.


In order to raise money for all of these claims, BP has been selling assets worth billions of dollars.

It has received $5 billion in cash settlements with other companies, which it has put into a $20 billion dollar Gulf of Mexico compensation fund.

It's expected to put another $860 million into that fund by the end of the year.

BP has also reached a $7.8 billion settlement with the Plaintiffs' Steering Committee, a group of lawyers representing victims of the spill.

Tens of thousands of court claims were filed, by businesses and people who said they lost money because of the spill.

They included commercial and shrimp fishermen, property owners, environmental groups, restaurants and hotels. Relatives of the workers killed in the blast also sued.


The U.S. Justice Department opened a criminal investigation into the spill.

Until now, the only person charged is former BP engineer Kurt Mix, who was arrested in April on obstruction of justice charges.

He's accused of deleting text messages about the company's response to the spill.

As for government investigations, a presidential commission said the spill was caused by time-saving, cost-cutting decisions by BP, Halliburton and Transocean.

In another report, a team of Coast Guard officials and federal regulators said BP bears ultimate responsibility for the spill.

That report found BP violated federal regulations, ignored crucial warnings and made bad decisions during the cementing of the well under the Gulf of Mexico.

As for BP's current business, it made a net profit of $5.5 billion in the third quarter of this year.

Related stories

A New Look At The BP Oil Spill

BP Oil Spill Goes Hollywood

The BP Oil Spill One Year Later


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