According to a report by Bloomberg News, BP faces billions of dollars in additional payments after they failed again to convince an appeals court that the company is being forced to pay claims that are not directly related to the 2010 Gulf of Mexico oil spill. The BP oil spill is considered the largest accidental marine oil spill in the history of the petroleum industry.
BP lost its bid for reconsideration by the full appeals court. A three-judge panel of the U.S. Court of Appeals in New Orleans earlier rejected BP’s view that the claims administrator for the company’s $9.2 billion settlement had misinterpreted the agreement and was paying for economic losses that were not caused by the oil spill, according to Bloomberg News. It has ben reported that as of February 2013, the criminal and civil settlements and payments to a trust fund had cost the company $42.2 billion.
A London-based analyst, Lucas Herrmann, at Deutsche Bank AG, wrote in an e-mailed report that “This makes assessing the final sum that BP will likely find itself paying under Business & Economic losses near impossible to determine.” Lucas Herrmann said that according to Bloomberg News, “Combined with the ongoing uncertainty around the likely scale of any final Macondo fine and for many investors this will just prove another reason to say ‘too complicated -– let’s move on.’”
U.S. Circuit Judge Leslie Southwick said that the settlement agreement “is not fundamentally flawed,” and that BP has agreed that claimants would not have to prove their losses were caused by the spill if their losses matched mathematical formulas.
In November 2012, BP and the United States Department of Justice settled federal criminal charges with BP pleading guilty to 11 counts of manslaughter, two misdemeanors, and a felony count of lying to Congress. BP also agreed to four years of government monitoring of its safety practices and ethics, and the Environmental Protection Agency announced that BP would be temporarily banned from new contracts with the US government. BP and the Department of Justice agreed to a record-setting $4.525 billion in fines and other payments.
Image credit: www.money.cnn.com