. Energy News .

Tens of billions at stake in BP oil spill trial
by Staff Writers
Chicago (AFP) Feb 15, 2012

Tens of billions of dollars will be at stake when BP heads to a US court this month to determine how much it owes for the massive Gulf of Mexico oil spill and how much it can shift to subcontractors.

Several government probes have castigated BP, rig operator Transocean and Halliburton -- which was responsible for the runaway well's faulty cement job -- for cutting corners and missing warning signs that could have prevented the disaster.

The April 20, 2010 explosion on the BP-leased Deepwater Horizon drilling rig killed 11 workers, blackened beaches in five US states and devastated the Gulf Coast's tourism and fishing industries.

It is now up to a federal judge to determine whether the deadly missteps constitute gross negligence, how much of the blame rests with each party and whether punitive damages should be imposed.

"There's only one path for BP to take -- blame it on as many other people as possible and make sure it's not cast as gross negligence," said Blaine LeCesne, a law professor at Loyola University in New Orleans who has been following the case closely.

"That way they may be able to limit their cost to $30 or $40 billion as opposed to $100 billion."

Judge Carl Barbier -- an expert in maritime law with a reputation for efficiency -- has consolidated hundreds of spill-related lawsuits into a single case set to begin on February 27 in New Orleans.

BP -- which last week reported a $23.9 billion profit for 2011 -- has said it is working to reach a settlement with the US government over a host of civil fines and possible criminal charges.

"We are prepared to settle if we can do so on fair and reasonable terms, but equally, if this is not possible, we are preparing vigorously for trial," chief executive Bob Dudley said after the British energy giant surged back into the black.

That settlement will likely come in at a record $20 to $25 billion, Morgan Stanley estimated in a recent research note.

That would significantly exceed the $12 billion provision that BP set aside for those penalties as part of the $41 billion charge it posted in 2010 to cover spill-related costs, analyst Martijn Rats wrote.

BP will also still have to deal with thousands of claims from fishermen, coastal businesses, state and local governments and others able to prove they suffered economic damage from the spill.

"The big fear of course is punitive damages," Ed Sherman, a law professor at Tulane University, told AFP.

BP would face a much bigger financial risk if the case was being handled by a jury, Sherman said, but Judge Barbier could still impose punitive damages of anywhere from one to five times the economic damages caused by the spill.

While any punitive damages will likely come in at the lower end of the range, it could still add tens of billions to the final tally.

BP has already paid more than $6 billion to over 220,000 claimants who chose to settle with a special fund set up to provide emergency payments and a faster route to reimbursement.

The massive cleanup and containment effort cost BP $13.6 billion.

It has been able to recover some of the costs from its well partners and subcontractors but warned in its quarterly report that the final tally for the spill is "subject to significant uncertainty."

The first step of what is expected to be a years-long legal battle will be for Barbier to determine how to apportion fault for the disaster and whether the missteps constitute gross negligence.

Barbier has already ruled that Halliburton and Transocean will be responsible for covering their share of government fines and punitive damages.

BP remains contractually obliged to cover their share of "compensatory claims " -- even if gross negligence is found -- unless it is able to prove its allegations that Halliburton fraudulently concealed problems with its well cementing job, the judge ruled.

The next, and far lengthier phase, will deal with assessing economic damages.

It took 87 days to cap BP's runaway well 5,000 feet (1,500 meters) below the surface which spewed some 4.9 million barrels (206 million gallons) of oil into the Gulf of Mexico.

Related Links
Powering The World in the 21st Century at Energy-Daily.com

Get Our Free Newsletters Via Email
Buy Advertising Editorial Enquiries


. Comment on this article via your Facebook, Yahoo, AOL, Hotmail login.

Share this article via these popular social media networks
del.icio.usdel.icio.us DiggDigg RedditReddit GoogleGoogle

Walker's World: The Falklands again
London (UPI) Feb 13, 2012
Some say it is the new Meryl Streep movie about Margaret Thatcher coming out in time for the 30th anniversary of her splendid little war. Others claim it is the posting of the heir to the British throne and his air force helicopter and the deployment of the world's most advanced new warship and nuclear missile submarine to those cold South Atlantic waters. Observers of Argentine ... read more

U.S. Grid Energy Storage Market is Strong and Poised for Exponential Growth

Screening Africa's renewable energies potential

Colombia energy oversupply bad for prices

Hydropower, Geothermal and Biomass Power Executives Call for Extension of the Production Tax Credit

New Institute to Build Low-Carbon Pathways to Prosperity

NEMA Welcomes Congressional Passage of Provision on Lithium Battery Air Shipments

Tens of billions at stake in BP oil spill trial

Biological Computer Deciphers DNA

Japan firms plan wind farm near Fukushima: report

New EU wind power capacity near level

Tandem polymer solar cells set record for energy-conversion

Solar panels could double as a roof

Oldest Family Mushroom Farm in the US Goes Solar

Powell Energy and Solar Completes Complex Install for N.J. Church

Australia's most populated state lifts uranium ban

Kazakhstan keen to expand civil nuke ties with India

Secrecy Over $8 Billion Vogtle Nuclear Reactor Deal Challenged in Court

Remove atomic scientist, expand expert panel: Kudankulam activists

Ethanol mandate not the best option

Grass to gas: UGA researchers' genome map speeds biofuel development

Study: Mandating ethanol wrong solution

Sustainable land use strategies to support bioenergy

Space-tracking ship Yuanwang VI concludes trip

China's new rockets expected to debut within five years

UN aid chiefs call for $725 million for drought-hit Sahel

More aid needed to divert disaster in Sahel: Red Cross

Early farmers may have impacted climate

Libya fallout fans Sahel hunger pangs as crisis looms

Memory Foam Mattress Review

Newsletters :: SpaceDaily Express :: SpaceWar Express :: TerraDaily Express :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News


The content herein, unless otherwise known to be public domain, are Copyright 1995-2012 - Space Media Network. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. Privacy Statement