BP settles spill suits, expects to pay $7.8b

BP agreed late on Friday to settle lawsuits brought by more than 100,000 fishermen who lost work, cleanup workers who got sick and others who claimed harm from the oil giant's 2010 Gulf of Mexico disaster, the worst offshore oil spill in US history. The momentous settlement will have no cap to compensate the plaintiffs, though BP estimated it would have to pay out about $7.8 billion (Dh28 billion), making it one of the largest class-action settlements ever. After the Exxon Valdez disaster in 1989, the company ultimately settled with the US government for $1 billion, which would be about $1.8 billion today. BP still has to resolve claims by the US government, Gulf states and its partners in the doomed Deepwater Horizon project, in which pressure from a well a mile below the ocean's surface blew up a massive drilling rig, killing 11 men and spewing oil into the sea for nearly three months. Those claims from the government could add billions more to its tab, and BP has already paid out billions in cleanup costs and to compensate victims. BP's payout estimate includes what the company internally predicts legal fees for the numerous plaintiffs lawyers in the case will be, though the issue has not yet been discussed between both sides, according to a person with direct knowledge of the settlement terms who spoke on condition of anonymity because those details are confidential. BP anticipates that the separate claims fund run by Ken Feinberg will cease at some point in the near future and that new vehicles will be set up and supervised by the court to pay claims as part of the settlement. People waiting for money from Feinberg's Gulf Coast Claims Facility can take what the settlement vehicles offer them or opt out and make a claim directly to a BP-run entity. If they don't like what they get from that entity, they can sue, the person said. Pending offers before the GCCF will be honoured, the person said. Feinberg declined to comment on the settlement when reached on his cell phone. The trustees that oversee the fund's assets have not yet weighed in publicly. The spill soiled sensitive tidal estuaries and beaches, killed wildlife and closed vast areas of the Gulf to commercial fishing. After several attempts to cap the well failed, engineers finally were successful on July 15, halting the flow of oil into the Gulf of Mexico after more than 85 days. The spill exposed oil industry failings, and forced BP chief executive Tony Hayward to step down after the company's repeated gaffes, including his infamous statement at the height of the crisis: "I'd like my life back." He was jettisoned off to work for a BP affiliate in Russia and has since left that company. BP's environmentally-friendly image was tarnished, and independent gas station owners who fly the BP flag lost business from customers who were upset over the spill. The disaster also created a new lexicon in American vocabulary as crews used innovative attempts to plug the spewing well, such as the top kill and the junk shot in which they tried to plug the well with pieces of rubber. Not end of the road The US Justice Department, in a statement, said Friday's settlement is not the end of the road, by far. "The United States will continue to work closely with all five Gulf states to ensure that any resolution of the federal law enforcement and damage claims, including natural resources damages, arising out of this unprecedented environmental disaster is just, fair and restores the Gulf for the benefit of the people of the Gulf states," the agency said. BP said it expects the money to come from the $20 billion compensation fund that it previously set up. According to the Deepwater Horizon Oil Spill Trust, current total trust assets are approximately $9.5 billion.