by Staff Writers
Chicago (AFP) Jan 19, 2012
BP could pay as much as $25 billion dollars to settle criminal and civil lawsuits relating to the massive 2010 oil spill in the Gulf of Mexico, analyst group Morgan Stanley said Thursday.
The British energy giant and its partners are set to face a trial beginning February 27 in New Orleans that consolidates a host of lawsuits seeking damages for economic losses, injury claims from recovery workers, violations of environmental rules, and for the damage of natural resources.
The trial also aims to resolve competing claims of liability among BP and its subcontractors, rig operator Transocean and Halliburton, which was responsible for the faulty cement job on the runaway well.
Should the complex case go to trial, the litigation could take years.
"Both BP and the DoJ (Department of Justice) may find the outcome of the trial too unpredictable, and given the amounts involved, therefore too risky," Morgan Stanley analyst Martijn Rats wrote in a note to clients.
"A settlement that includes not only BP's civil charges but also criminal penalties and natural resource damage claims appears most likely. In that case, we expect a total charge for BP in the order of $20 to $25 billion."
That would significantly exceed the $12 billion provision that BP set aside for those penalties as part of the $40 billion charge it posted in response to the spill, he noted.
The settlement will likely be announced after BP releases its fourth quarter results on February 7 and Rats wrote that it will likely prevent the energy giant from increasing its quarterly dividend.
However, he forecast annual dividend growth of five percent in 2012 and 2013.
The explosion at the Deepwater Horizon rig on April 20, 2010, killed 11 people, and the Macondo well gushed oil into the ocean for 87 days, blackening the southern US shoreline and crippling the local tourism and fishing sectors.
By the time the well was capped, 4.9 million barrels (206 million gallons) of oil had spilled out of the runaway well 5,000 feet (1,500 meters) below the surface of the Gulf of Mexico.
Our Polluted World and Cleaning It Up
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Hong Kong clean air targets fail to impress
Hong Kong (AFP) Jan 18, 2012
Environmentalists on Wednesday expressed disappointment at new clean-air targets for Hong Kong, as research showed pollution-related illnesses killed more than 3,000 residents a year. In the face of mounting public criticism and allegations that it is soft on polluting industry, the government on Tuesday announced its first revision to air quality objectives (AQOs) in 25 years. But the t ... read more
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