BP to pay biggest ever penalty to settle Gulf spill

BP will pay the largest criminal penalty in US history to settle charges and claims arising from the devastating 2010 Gulf of Mexico oil spill, a source close to the case said Thursday. The amount of the settlement - reportedly between $3 and $5 billion - will be announced later in the day, the source said. Earlier today, British energy giant BP revealed that it was in "advanced" talks with US authorities to settle criminal charges and claims arising from the devastating 2010 Gulf of Mexico oil spill disaster. "BP confirms that it is in advanced discussions with the United States Department of Justice and the Securities & Exchange Commission (SEC) regarding proposed resolutions of all US federal government criminal and SEC claims against BP in connection with the Deepwater Horizon incident," the firm said in a statement. "No final agreements have yet been reached and any resolutions, if agreed, would be subject to federal court approvals in the United States." The Wall Street Journal, citing sources, said that US Attorney General Eric Holder was expected to announce the agreement at a news conference in New Orleans later on Thursday, amid speculation of a record fine. BP declined to comment on the report. The energy major added however that the proposed resolutions are not expected to cover federal civil claims, including damages under the Clean Water Act, federal and state natural resources damages claims or outstanding private civil claims. "A further announcement will be made if and when final agreements are reached. Until final agreements are reached, there can be no certainty any such resolutions will be entered into," the company said. In morning London trade, the group's share price dipped 0.65 percent to 423 pence on the British capital's FTSE 100 index of top companies, which was 0.30 percent lower at 5,704.46 points. "BP Plc is expected to pay a record criminal penalty and plead guilty to criminal misconduct over the 2010 Deepwater Horizon disaster," said Spreadex sales trader Max Cohen. "It is expected that BP will plead guilty in exchange for a waiver of future prosecution on the charges. Although the value of BP's payment is not yet known it has been said that it would be the largest criminal penalty in US history." The British company's reputation was ravaged two and a half years ago after an explosion on the BP-leased Deepwater Horizon rig killed 11 workers and sent millions of barrels of oil spewing into the sea. The blast on April 20, 2010, sank the rig and unleashed the biggest marine oil spill in the industry's history - and what has widely acknowledged to be the worst US environmental disaster ever. Earlier this year, BP reached an agreement to settle claims from fishermen and others affected by the disaster for $7.8 billion, but it must be approved by a federal judge and does not affect claims brought by the government. Over the past two years, BP has so far sold non-core assets totalling more than $35 billion to help fund massive compensation costs arising from the tragedy. The figure is set to reach $38 billion by late 2013. Last month, BP posted bumper profits and hiked its shareholder dividend as the energy giant prepared for a new Russia adventure after being rocked by the Deepwater Horizon crisis. Net profit jumped 7.7 percent to $5.43 billion (4.19 billion euros) in the third quarter, or three months to September, compared to the same part of last year. BP unveiled a massive strategic deal with Russian state oil firm Rosneft in an attempt to reposition itself after the gulf debacle. Analysts believe that the Rosneft deal could lead to major exploration projects in the Arctic.