BP prepares for long fight in civil oil spill trial
BY SELINA WILLIAMS
LONDON -- BP is less likely to negotiate a settlement in a civil trial to determine environmental fines for the 2010 Gulf of Mexico oil spill, in the wake of spiraling costs from a separate deal clinched last year to compensate businesses for losses stemming from the disaster, the company's chief executive said Tuesday.
"It's highly unlikely we are now going to enter into some sort of detailed settlement discussions. Unfortunately, some of the circumstances that are happening today suggest that it may be in the best interests of our shareholders now to play it long," said BP CEO Bob Dudley at a press conference.
Mr. Dudley's comments mark a shift in the company's tone over the civil trial to determine the number of barrels of oil that leaked into the Gulf of Mexico, the next phase of which is scheduled to begin at the end of September. A third phase, to determine the financial penalty for the spill, won't occur until sometime in 2014.
Earlier Tuesday, BP said that the $20 billion fund it had set up to cover the cost of the Gulf of Mexico oil spill will soon run out, as compensation claims have accelerated despite legal efforts from the company to halt what it contends are excessive payouts.
The fund has paid out around $1 billion a quarter on average over the past nine months--more than twice the level in the preceding nine months.
Mr Dudley said that the company is in a better financial position than it was two to three years ago, when it was keen to settle, so it is now prepared for a long legal battle to determine environmental fines that could total as much as $17.6 billion.
"We're not going to make any settlements that are not right and that we don't understand all the details of, including how it's going to be administered. The balance sheet is strong again so I think this activity could very well go on for quite a long time," he said.
BP is particularly irked over claims from attorneys that are submitting their own significant claims for losses, in addition to the fees they are receiving for work conducted on behalf of other claimants and clients.
Mr Dudley said that in the last week claims submitted by such attorneys had averaged $1.5 million per firm. "What's happened isn't right and now you're going to see us vigorously fight," he said.
Dow Jones Newswires