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Gulf Oil Spill

BP agrees to pay $4.5 billion over spill

Thursday, November 15, 2012 - 02:00

Nov. 15 - British oil company BP pleads guilty to criminal charges relating to its 2010 oil spill and agrees to pay an extra $4.5 billion on top of the tens of billions it is already paying out. Sonia Legg reports.

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ATTN CLIENTS - PLEASE USE THIS UPDATED VERSION OF THE STORY NOT EARLIER EDIT It's been two and a half years since the Deepwater Horizon explosion in the Gulf of Mexico. Now oil giant BP has agreed to pay the biggest criminal fine in U.S. history to try and draw a line under the disaster. It will pay $4.5bln to US authorities over six years and plead guilty to a series of offences. They include 11 felony counts of misconduct or neglect relating to the death of 11 workers, one of obstruction of Congress and two misdemeanours connected to spill damage. Joe Rundle from ETX Capital say it can't come soon enough for investors. SOUNDBITE: Joe Rundle, ETX Capital, saying (English): "Getting this fine out of the way is a big hurdle for the stock price, it's a big overhang. So once this is done it then leaves on to the civil claims which should be done in February and this will set a sort of level and people can start working out what level these civil claims are going to be." Pfizer had held the record for the largest US criminal penalty - it paid $1.3 billion in 2009 for marketing fraud. Five years ago BP paid $373m to resolve inquiries over the 2005 Texas refinery explosion. This new fine may be far greater than that but many agree the medicine will be worth swallowing. BP shares lost more than 40 percent of their value after the disaster - and they are still way down on pre-spill levels. Brenda Kelly is a markets analyst at IG. SOUNDBITE: Brenda Kelly, IG, saying (English): "In some ways BP has come back down from being one of the biggest companies in the world by market capitalisation to just around the fourth, that's a huge fall back and I think it has a long way to climb if it's going to retake that particular position." SOUNDBITE: Joe Rundle, ETX Capital, saying (English): "If BP remains at these levels I think it definitely becomes a take over target or break up story. So either the stock is going to move up organically or it's going to be taken out by a couple of its competitors." A settlement may also put pressure on the other companies involved in the incident to make similar deals. They include Transocean, the owners of the rig and Halliburton, one of the contractors.

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BP agrees to pay $4.5 billion over spill

Thursday, November 15, 2012 - 02:00

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