BP has abruptly switched legal strategies—again—in the multibillion-dollar liability fight stemming from the April 2010 Gulf of Mexico oil spill. The company dropped a campaign to oust a settlement administrator it had accused of tolerating waste and fraud. The move seeks, in part, to mollify a federal judge in New Orleans who could sock BP with an enormous judgment in an environmental suit filed by the U.S. government.
As the five-year anniversary of the mammoth spill approaches, BP is looking to contain the already-considerable damage to its balance sheet and reputation. Beginning shortly after the disaster, which killed 11 offshore-rig workers and spewed millions of barrels of crude into the gulf, BP set aside billions for cleanup and damage claims and started making payouts. The company's attempts to avoid protracted litigation failed, however, as certain Louisiana officials and plaintiffs' lawyers pressed for compensation levels BP refused to meet. So far, the company has paid out more than $28 billion, but legal hostilities continue on several fronts. The eventual financial hit could easily reach $50 billion.