The BP Deepwater Horizon disaster trial begins soon, could last till 2014

If you think that BP’s Deepwater Horizon rig disaster at the Macondo well in the Gulf of Mexico in 2010 was massive and far-reaching, you ain’t seen nothing yet.

According to Citigroup analysts, the federal trial to apportion blame and determine punishment for the disaster, scheduled to begin in early 2012, could go on until 2014.

BP has sued Transocean, Halliburton, and Cameron International (designer of the blowout preventer). The suit demands those three firms pay what it sees as a fair share of the cost of the massive spill and cleanup operations, which has to date been covered by BP alone. The three companies, blaming rig operator BP alone for the accident, have countersued.

Meanwhile, more than 120,000 claimants (mainly Gulf Coast businesses and other interests) have filed lawsuits against BP and the other companies involved in the Macondo well disaster. All of this legal wrangling will be processed in a US federal court in New Orleans, beginning on February 27, 2012.

BP has set aside about $40 billion for costs related to the disaster, and has seen its stock price drop more than 30% since the spill. According to Citigroup, the company is hoping to pay $5 billion in fines and $7 billion in compensation. However, if BP is found to be grossly negligent, the company’s costs could rise by a further $10 billion.

Ironically, BP could well have eight or more new rigs operating in the Gulf of Mexico by the end of 2012. This is more than a year before a determination of the cause of the Deepwater Horizon disaster, when BP (with or without other companies) receives its punishment and is sent the final bill for the 2010 spill.

UPDATE: In November 2012 BP  received the largest criminal fine in US history as part of a $4.5 billion settlement related to the 2010 Deepwater Horizon disaster. The sum includes a $1.3 billion fine as well as payments to wildlife and science groups. As part of the settlement, BP will also plead guilty to 14 criminal charges.

 

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Photo by J E Theriot used under a Creative Commons license.
Stuart Hampton

British editorial veteran Stuart Hampton has been covering oil and gas companies for Hoover's since the Neogene-Quaternary period. Well, actually, since the early 1990s. For the best overview of the oil industry and its history he recommends Daniel Yergin's "The Prize." You can also follow Stuart on Twitter.

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