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Sat March 3, 2012
BP Expects To Pay $7.8 Billion To Oil Spill Victims
SCOTT SIMON, HOST:
This is Weekend Edition from NPR News. I'm Scott Simon.
BP is beginning to settle the financial bill it faces from a 2010 oil spill in the Gulf of Mexico. A group of individuals and businesses who sued the company have agreed to settle for nearly $8 billion. The plaintiffs all say they were harmed when the Deepwater Horizon drilling rig exploded, killing 11 men, and leading to the massive spill.
A trial to determine who is responsible for the disaster was set to begin Monday. That's now been postponed. NPR's Jeff Brady has been following developments. Jeff, thanks for being with us.
JEFF BRADY, BYLINE: My pleasure.
SIMON: How did this deal come about?
BRADY: Well, you know, there were more than 500 lawsuits filed against BP and the companies that helped it drill the well where this disaster happened. And rather than having separate trials for all of those cases, the court combined them into one complex case.
The federal judge in New Orleans, Carl Barbier, he was encouraging the various sides to settle - so much so that when the trial was supposed to start last Monday, he agreed to delay it so they would have some more time to try and settle the case.
I think that BP really wanted to avoid another public rehashing of this event. And there are thousands and thousands of plaintiffs involved. And at this point, I think a lot of them just want to put this incident behind them.
SIMON: Was this just the first installment of what the company might have to wind up paying?
BRADY: It certainly is. And that figure is actually $7.8 billion. And that's an estimate from BP how much it will have to pay for this particular settlement. The company says it'll pay that from a $20 billion trust that it set up at the request of the federal government.
The plaintiffs' attorneys point out, though, that there is no cap on how much BP will have to pay. They say the company will have to pay all legitimate claims under this agreement. So the final number could be a little higher, or a little lower, than that $7.8 billion.
One big plus for BP here, though, is this agreement falls within what the company was predicting the spill would cost. So that means no big surprises for BP's investors.
SIMON: What is in the agreement for the fishermen along the coast who were harmed?
BRADY: There is $2.3 billion that's been set aside specifically for the Gulf seafood industry. Some of those shrimpers, and others, have lost so much business because of this spill. This should give them a boost. And I suspect for the rest of us, we can expect to see more of those big advertising campaigns from BP, touting the Gulf Coast and the seafood industry there.
SIMON: And the states along the Gulf Coast and the federal government, they have claims, but they're not part of this agreement?
BRADY: That's right. BP still faces billions of dollars in federal fines under the Clean Water Act, and for natural resource damages included under the Oil Pollution Act. The states still have claims against the company. And there are still a few individuals who are not part of this big settlement. Those claims still could go to trial. Judge Barbier says he'll give time for the parties to figure out how this settlement affects them, and then he'll set a new trial date down the road.
SIMON: NPR's Jeff Brady, thanks so much.
BRADY: You're welcome. Transcript provided by NPR, Copyright National Public Radio.