BP Falls as U.S. Reiterates Gross Negligence Charge in Spill
BP Plc (BP/), the owner of the Macondo well that caused the worst U.S. oil spill two years ago, declined in London after the Department of Justice reiterated it will pursue charges of gross negligence in the case.
BP slipped 2.9 percent to 423.85 pence, the lowest in two months. BP faces a trial with the DOJ after reaching a $7.8 billion settlement in March with victims of the spill.
“The tone of the DOJ is clearly disappointing as it would appear to suggest that hope for an out-of-court settlement is fading,” said Richard Griffith, an analyst at Oriel Securities Ltd. in London, in an e-mailed note. “The risk is that the trial process could now drag on over several years and effectively act as a drag on the shares.”
The U.S. “intends to prove gross negligence or wilful misconduct” in a trial, it said in a court filing from Aug. 31. The government was responding to comments in a BP filing asking for final approval for its settlement with victims.
If BP is found guilty of gross negligence, which would require the government to prove the accident resulted from a conscious BP act or omission, the maximum level of penalty would rise to $17.6 billion from $4.5 billion using the government’s estimate of the size of the spill.
The blowout and explosion on the Deepwater Horizon rig in April 2010 killed 11 workers and set off an oil spill that the government has estimated at more than 4 million barrels. The accident prompted hundreds of lawsuits against BP, and shares remain more than 30 percent lower than before the accident.
The government’s filing shows it doesn’t disagree with the company’s March settlement with victims, BP spokesman Mark Salt said.
“Other issues raised by the government simply illustrate that disputes about the underlying facts remain,” Salt said. “BP believes it was not grossly negligent and looks forward to presenting evidence on this issue at trial in January.”
To contact the reporter on this story: Brian Swint in London at firstname.lastname@example.org