Marcus Evans Group | Worldwide Headquarters | American Offices | Latin America | European Offices | African / Asian Offices

BP yet to finalise £5bn settlement over Gulf of Mexico oil spill

45 days to tie up loose ends and ease uncertainty over Britain’s biggest oil group, says legal chief Rupert Bondy

BP warned on Sunday that it could not guarantee that the .8bn (£5bn) out of court settlement with plaintiffs covering the Gulf of Mexico oil spill would be finally signed because there were some loose ends still to be tied up.

The “devil is in the detail” admitted Rupert Bondy, BP’s group general counsel, in a briefing call with City analysts after the outline deal signed before the weekend.

Bondy remained hopeful that both sides would be able to complete a process that he believed represented a “significant step” towards removing uncertainty over the future of Britain’s biggest oil group.

The two sides now have 45 days in which to tie up a final accord and the BP share price – dogged by the legal case – could be boosted on Monday by the legal agreement.

Later this week, the company could be in for less flattering news when the 2011 annual report is expected to be published and show chief executive Bob Dudley was paid a financial bonus during what has remained a difficult year. In February it was revealed he – and two other directors – had received performance-related share payouts.

BP said the .8bn figure for the settlement was “neither a floor nor a ceiling” but it reinforced previous estimates that the total cost of all liabilities should be no more than .2bn.

The deal covering 110,000 private claims, including those of fishermen who lost their livelihoods because of the spill, has postponed the start of a trial that was due to begin in New Orleans on Monday. The court case had already been delayed by a week.

The company still faces claims from various states and most significantly action by the Department of Justice, which said at the weekend the private settlement did not compensate for significant damages or BP’s “violation of the law”.

The department added: “While we are pleased that BP may be stepping up to address harms to individual plaintiffs, this by no means fully addresses its responsibility for the harms it has caused.”

The US state is bringing a negligence case against BP for the explosion on April 2010, which caused millions of barrels of oil to be leaked from the Deepwater Horizon rig, killed 11 workers and polluted beaches in Louisiana.

If BP is found “grossly negligent” it could be fined as much as bn under the Clean Water Act alone but the company said on Sunday – as it had argued all along – that this would not be the case. © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds