BP appeals spill ruling that may spell $18 billion in fines

BP Plc challenged a federal judge’s ruling that the company’s exploration unit acted with gross negligence in causing the 2010 Gulf of Mexico oil spill, a decision that exposed the U.K.-based energy company to as much as $18 billion in fines under U.S. law.

This is BP’s first appeal of U.S. District Judge Carl Barbier’s September decision that the company was 67 percent responsible for causing the worst offshore spill in U.S. history. The judge determined rig-owner Transocean Ltd. was 30 percent liable and cement-services provider Halliburton Co. 3 percent responsible for the disaster, which killed 11 workers.

Barbier’s finding that BP was grossly negligent and that its actions at the Macondo well “amounted to willful misconduct is not supported by the evidence at trial,” Geoff Morrell, company spokesman, said in an emailed statement. “The ruling should be overturned.”

BP previously filed multiple appeals on aspects of its $9.7 billion settlement of economic damages tied to the spill. The U.S. Supreme Court refused without explanation Dec. 8 to consider the company’s claim that the settlement administrator is paying victims that BP says weren’t harmed by the spill.

‘Significantly higher’

The cost of the settlement will probably be “significantly higher” than $9.7 billion, as thousands of claims remain to be processed, the company said in an Oct. 28 regulatory filing. The settlement, reached in 2012, doesn’t cover additional spill-related losses claimed by Gulf Coast financial institutions, casinos, real estate firms, state and local governments, or companies affected by the federal deep-water drilling moratorium imposed after the spill.

BP faces a non-jury trial in January, when Barbier will determine how much the company owes in pollution fines by considering the amount of oil released, BP’s level of culpability and its efforts to mitigate the spill, among other questions.

The gross negligence ruling triggers maximum potential fines of $4,300 per barrel of oil spilled, under the Clean Water Act. The U.S. claims 4.2 million barrels were spilled into the Gulf; BP pegs the spill at 2.45 million barrels.

BP has spent $28 billion so far on spill response, cleanup and damages, according to its most recent financial statement. The company has taken a $43 billion pretax charge to earnings to cover all anticipated spill-related expenses.

The case is In re Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, MDL-2179, U.S. District Court, Eastern District of Louisiana (New Orleans).