British petroleum company BP and the U.S. government have reached an agreement over charges relating to the 2010 Deepwater Horizon disaster that killed 11 workers and led to the largest oil spill in history, agreeing to a record settlement of $4.5 billion.
In a statement released by BP, the company says it will plead guilty to 11 felony counts of Misconduct or Neglect of Ships Officers, one per person that was killed in the explosion on the offshore drilling rig, in addition to one felony count of obstruction of Congress over lying to congress about how much oil was spewing from the damaged well and two misdemeanors relating to the Clean Water Act and the Migratory Bird Treaty Act.
If the settlement is approved by a federal judge, BP will pay $1.25 billion in criminal fines — another record amount — as part of a $4 billion settlement.
If the settlement is approved by a federal judge, BP will pay $1.25 billion in criminal fines — another record amount — as part of a $4 billion settlement agreed to with the Department of Justice that will be paid in installments over five years. The settlement figure also includes $2.4 billion to the National Fish & Wildlife Foundation and $350 million to the National Academy of Sciences.
In a separate settlement with the Securities and Exchange Commission, BP will pay a penalty of $525 million over three years.
“We believe this resolution is in the best interest of BP and its shareholders,” Carl-Henric Svanberg, BP’s chairman, said in a statement. “It removes two significant legal risks and allows us to vigorously defend the company against the remaining civil claims.”
The penalty figure, while tripling the previous record of $1.3 billion assessed against Pfizer in 1999, is less than some expected, with fines of up to $21 billion at stake if the company was found to be grossly negligent. The $4.5 billion figure is less than BP's reported profits in the third quarter of 2012, which totaled $5.5 billion.
Sources also report that two BP employees will face manslaughter charges over the 11 men killed on the Deepwater Horizon.
The settlement with the Department of Justice does not include civil suits against BP, including a federal civil suit brought under the Clean Water Act or other laws, as well as civil suits brought by states, local governments, businesses and individuals, including a $7.8 billion deal currently under judicial review between BP and thousands of Gulf shrimpers, fishermen, restaurants, hotels and others who suffered economic losses because of the massive oil spill.