BP share price up, faces the largest US pollution fine

BP Plc faces a maximum fine of $13.7 billion over its 2010 oil spill in the Gulf of Mexico after a US court ruled that 3.19 million barrels of oil leaked into the ocean.

The government had estimated that 4.2 million barrels leaked into the Gulf of Mexico during the worst offshore spill in US history. However, US District Judge Carl Barbier did not rule in line with that projection, reducing the possible fine from $18 billion.

The penalty is still nearly four times larger than the provision set aside by BP, which estimated the spill at 2.45 billion barrels.

In September Judge Barbier ruled that BPs Macondo well acted with “gross negligence” in actions resulting in the spill. The decision falls in line with the Clean Water Act, meaning that BP could be fined up to $4 300 per leaked barrel or a total of $13.7 billion.

However, Judge Barbier has the power to assign lower penalties. BP was hoping for the court to rule just “negligence” in September, which would have resulted in up to $1 100 per barrel fine.

The final amount of the fee will be set on Tuesday next week in New Orleans during a non-jury trial. BP lawyers are expected to argue for a lower penalty based on the companys actions to reduce pollution, while the government is projected to be seeking the maximum penalty.

“BP believes that considering all the statutory penalty factors together weighs in favour of a penalty at the lower end of the statutory range,” the company said in a statement on Thursday.

BP have stated numerous times that the company estimated that the well was releasing 5 000 barrels of oil every day. However, internal documents pointed out that the flow rates were significantly higher, the Judge wrote.

BP did not have a devised plan on how to close down the well quickly should a major accident occur. However, federal laws do not obligate companies to have equipment that could handle a possible blowout, Judge Barbier added.

The company has paid around $9.7 billion to settle claims by private parties who suffered from the leak. However, BP is yet to reach an agreement with states, including Alabama and Louisiana, over damage done to natural resources and other businesses affected by the leak or the temporary ban of deep-water drilling.

BP Plc gained 2.73% on Thursday and closed at GBX 392.60 in London. On Friday the stock edged up 3.17% to GBX 405.05 at 13:33 GMT, marking a one-year decrease of 17.18% The company is valued at GBP 71.83 billion.