British Petroleum (BP) said on Thursday it reached a record $18.7B settlement with the US government and five US states over the 2010 Gulf of Mexico oil spill.
A rig explosion in the Gulf of Mexico on April 20, 2010, killed 11 workers and led to the worst offshore oil spill in the US history. The Deepwater Horizon rig that was drilling in the Gulf sank on April 22, and led to an oil spill of millions of barrels.
“With this agreement we provide a path to closure for BP and the Gulf,” BP chairman Carl-Henric Svanberg said on Thursday.
The $18.7B sum will be paid over 18 years to the US government and the five Gulf states affected by the oil spill.
Louisiana, Mississippi, Alabama, Florida and Texas will receive payouts when the deal is approved by a federal judge.
“This is a realistic outcome which provides clarity and certainty for all parties,” said Bob Dudley, BP’s group chief executive.
"For BP, this agreement will resolve the largest liabilities remaining from the tragic accident and enable BP to focus on safely delivering the energy the world needs."
The settlement includes $5.5B to be paid to the US government over 15 years as a civil penalty under the Clean Water Act.
Another $7.1B will be paid to the US and Gulf Coast states for natural resource damages.
A further $4.9B will be paid to resolve other claims made by the five Gulf Coast states.
BP will have to pay about $1B to settle claims made by more than 400 local government entities.
The head of the US Justice Department, Attorney General Loretta Lynch, hailed the record deal, saying “If approved by the court, this settlement would be the largest settlement with a single entity in American history.”