BP To Pay $18.7 Billion In Landmark Settlement Over 2010 Gulf Oil Spill

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Oil giant BP agreed to pay $18.7 billion in a settlement announced on Friday by Gulf Coast states and the federal government. The deal pays for the harm from BP's 2010 Gulf of Mexico oil spill, which was the worst in U.S. history. The accident killed 11 rig workers.

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Transcript

ROBERT SIEGEL, HOST:

BP has agreed to the largest environmental settlement in U.S. history. The company will pay more than $18.7 billion for its 2010 Gulf of Mexico oil spill. The bulk of the money goes to Florida, Alabama, Mississippi, Louisiana and Texas. The company will be allowed to spread those payments out over time. NPR's Jeff Brady begins our coverage.

JEFF BRADY, BYLINE: The Deepwater Horizon oil rig exploded off Louisiana five years ago, killing 11 workers. The out-of-control well spewed crude into the Gulf for nearly three months. It fouled the shorelines and killed wildlife. In announcing today's settlement, Mississippi governor, Phil Bryant, says it will help his state recover.

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PHIL BRYANT: The agreement will bring about an additional $1.5 billion to Mississippi.

BRADY: The largest share of the money will go to Louisiana, which had the most damage. The $18.7 billion is on top of previous settlements the company reached with other parties. Today's agreement covers penalties under the Federal Clean Water Act and natural resource damage and economic claims made by state and local governments. BP argues the region is recovering nicely, but others say it will take years to know the extent of the damage. Today, though, politicians along the Gulf Coast celebrated, including Louisiana congressman Garret Graves.

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GARRET GRAVES: We've been up against a half-a-billion dollar PR effort that has been distorting what's happening on our coast, but today's a great day because we stuck to our guns. This decision is science-based for the state of Louisiana, and we're going to make the state whole.

BRADY: The settlement came as federal judge Carl Barbier in New Orleans was about to rule on how much BP owed under the Federal Clean Water Act. Last year, Barbier determined BP's gross negligence and willful misconduct led to the spill. That decision meant the company would pay more. BP declined an interview request, but in a statement, chief executive, Bob Dudley, said the agreement resolves their largest liabilities remaining after the accident and allows the company to focus on its business. After the Exxon Valdez accident in 1989, it took decades to resolve legal battles, so officials, like Florida attorney general, Pam Bondi, say settling the case now was important.

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PAM BONDI: The last thing that we wanted was to be tied up again in a black hole of litigation that could've gone 15, 20, 30 years that perhaps our grandchildren would have seen the results of.

BRADY: BP and its investors now have a good estimate of the total cost of the Gulf spill - nearly $54 billion. That's a lot of money, even for a company with a market capitalization over $125 billion. Investors seemed pleased with today's news. They bid up BP stock more than 5 percent after the deal was announced. University of Alabama law professor Montre Carodine called the settlement which will be paid over 18 years a good deal all around.

MONTRE CARODINE: It's a win for BP because they get to pay the amount out over time. It's a win for the Gulf states because they will have a steady stream of income over that period of time.

BRADY: And, Carodine says, it's a win for Judge Barbier because this settlement likely will mark the end of major litigation related to the spill. And she says Barbier has successfully managed one of the most complicated cases in legal history. Jeff Brady, NPR News. Transcript provided by NPR, Copyright NPR.