BP, plaintiffs agree on $7.8 billion compensation over Gulf oil spill

Gulf spill...Photo... courtesy csm.com

British Petroleum (BP) has reached an agreement with counsels to thousands of victims of the 2010 oil spill in the Gulf of Mexico.

The proposed agreement is part of a series of agreements announced late Friday night with parties to the deal, though observers say this would hardly end spate of legal battles the oil giant has to contend with, including a Justice Department environmental charges and a criminal probe over the spill of an estimated four million barrels of oil into the ocean.

BP chief executive officer, Bob Dudley, said on Friday that the proposed deal, estimated to gulp about $7.8 billion in claims, would resolve a “substantial majority of legitimate economic loss and medical claims,” including $2.3 billion to help meet Gulf seafood industry losses.

For steering committee representing the victims, the proposed settlement would fully compensate hundreds of thousands of victims of the tragedy.

The deal is expected to address the economic losses suffered by businesses and individuals, including damage to coastal property, wetlands and personal property, real property sales losses, lost subsistence use and claims for failure to pay under BP’s Vessels of Opportunity Programme.

It would also assist in sorting out medical claims by victims related to the spill, though it does not include federal Clean Water Act, Oil Pollution Act or natural resource damages claims against BP and other agencies, or claims by state and local governments.

The United States’ government official, Wyn Hornbuckle, said the Obama administration is prepared to hold responsible parties accountable for the damage suffered in the Gulf region.

 “The United States will continue to work closely with all five Gulf states to ensure that any resolution of the federal law enforcement and damage claims, including natural resources damages, arising out of this unprecedented environmental disaster is just, fair and restores the Gulf for the benefit of the people of the Gulf states,” he said.

The disaster prompted the Obama administration to issue a controversial months-long moratorium on new deepwater drilling permits and led to the overhaul and toughening of offshore drilling rules.

BP has already spent more than $22 billion as a result of the disaster, the company said, including more than $8 billion paid to individuals, businesses and government entities and roughly $14 billion responding to the accident.

Reacting to the development, a Port Harcourt-based environmental rights activist, Celestine Akpobari, said the federal government should borrow a leaf from the United States government’s handling of environmental issues affecting oil producing communities.

Mr. Akpobari said the Goodluck Jonathan administration has not only kept quiet over the recent Environment programme (UNEP) Environmental Assessment report on Ogoniland which indicted Shell for years of environmental degradation activities, it has failed to take action against Shell over the recent Bonga oil spill reputed to be biggest in the country’s spill history.

“A committee set up by the government to study the recommendations of the UNEP report has since submitted its report, yet nothing is being done to ensure that Shell pays compensation to the people,” Mr. Akpobari said.

“Communities affected by the Bonga oil spill are still reeling with the impact of the incident on their livelihood. Yet government is yet to make a public pronouncement condemning Shell for its irresponsible act against the people. The fire incident in the Chevron oil rig in Bayelsa State is still raging more than a month since it broke out. The government only visited the area weeks after civil society and media outcry of the impact on the people.”


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