BP to pay US govt $4.5b to solve oil spill claims

HOUSTON - British oil giant BP said Thursday it has agreed to pay 4.5 billion U.S. dollars in fines and other payments to the United States government and plead guilty to misconduct and negligence charges in connection with the 2010 oil spill in the Gulf of Mexico.

London-based BP confirmed in a statement released Thursday that it has reached an agreement with the U.S. Justice Department to resolve all federal criminal charges and all claims by the Securities and Exchange Commission against the company stemming from the 2010 Deepwater Horizon rig explosion, the subsequent oil spill and the response.

The payments include a 4 billion fine to be paid over a period of five years, with much of it to go to government environmental agencies. Another 525 million dollars, to be paid over three years, will be used to settle securities claims with the U.S. Securities and Exchange Commission, according to the statement.

The BP penalty is setting a record as the largest previous corporate criminal penalty assessed by the U.S. Department of Justice was the 1.2 billion U.S. dollars fine imposed on drug maker Pfizer in 2009, according to media reports.

As part of the settlement, BP also agrees to plead guilty to 11 felony counts of misconduct or neglect charges related to the deaths of 11 people in the Deepwater Horizon accident, one misdemeanor count under the Clean Water Act, one misdemeanor count under the Migratory Bird Treaty Act, as well as one felony count of obstruction of Congress, the BP statement said.

Thirteen of the 14 criminal charges pertain to the accident itself and are based on the negligent misinterpretation of the negative pressure test conducted on board the Deepwater Horizon, BP said.

"BP acknowledged this misinterpretation more than two years ago when it released its internal investigation report," the company noted.

"We believe this resolution is in the best interest of BP and its shareholders," said Carl-Henric Svanberg, BP's Chairman. "It removes two significant legal risks and allows us to vigorously defend the company against the remaining civil claims."

According to BP, the agreement means that no further federal criminal charges can be filed in connection with the incident, enabling the company to concentrate on defending itself against future civil claims.

The 2010 blowout of BP's Macondo well in the Gulf of Mexico triggered an explosion that killed 11 rig workers and unleashed the worst oil spill in U.S. history.