Belfast Telegraph

Friday 19 September 2014

Washington to sue BP over Gulf leak

The US government is to sue BP over the Gulf of Mexico oil spill disaster

The US government is to sue BP for costs and damages in a bid to recoup billions of dollars after the Gulf of Mexico oil spill.

The British oil firm was among eight companies named by the Justice Department in a lawsuit filed in a New Orleans court on Wednesday.

On April 20, an explosion at BP's Deepwater Horizon rig killed 11 workers and caused the largest offshore spill in US history with hundreds of millions of gallons of oil gushing into the Gulf.

The US administration is calling for the eight named firms to be held liable without limitation for all costs and damages under the Oil Pollution Act. The lawsuit is also calling for the companies - which include drilling rig operator Transocean and its insurer QBE Underwriting - to be held accountable under the Clean Water Act.

Announcing the action, US Attorney General Eric Holder said: "We intend to prove that these defendants are responsible for government removal costs, economic losses, and environmental damages without limitation.

"Even though the spill has been contained, the Department of Justice's focus on investigating this disaster and preventing future devastation has not wavered. Both our civil and criminal investigations continue, and our work to ensure that the American taxpayers are not forced to bear the costs of restoring the Gulf area and its economy is moving forward."

The US administration alleges that safety regulations were violated prior to the blast. It claims that the defendants failed to use the best available drill and neglected to adequately monitor conditions at the well.

The overall cost to BP for the clean-up operation so far is just shy of 40 billion dollars (£25 billion), but the civil action could see the total bill increased significantly.

The oil giant has also seen shares plummet and been forced to offload billions of dollars of assets to help pay compensation for the disaster. If found liable for negligence under the Clean Waters Act, the defendants could be fined a maximum 4,300 US dollars per barrel of oil spilt.

As an estimated 4.9 million barrels leaked into the Gulf, it could leave the firms facing a total bill of around 21 billion dollars (£13.5 billion).

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