On Thursday BP plc (ADR)(NYSE:BP) announced a settlement of $4.5 billion against federal criminal charges brought against it for the Deepwater Horizon disaster in 2010 that killed 11 workers and also led to the largest spill in the history of the United States.
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It is being touted as the largest settlement ever made. This is however not all - the company has so far provided for $42 billion in fines that it expects to pay as a result of the oil spill.
The company has been meeting the costs associated with the incident through asset sales and now it is a much smaller company than what it was, though still profitable in the oil industry.
Analysts said that the crucial period was not yet past for the company but that the company had moved a step closer to moving beyond the danger zone.
There is a trial coming up in February in New Orleans to fix BP's civil liability in the whole issue and that is critical for the company's future.
If the court does find that the oil spill and the subsequent damage that was caused occurred due to BP's negligence then the company will be liable to pay even more in fines than previously estimated.
For instance, BP has reserved $3.51 billion for possible civil fines under the Clean Water Act. The act allows up to $17.6 billion in civil fines — maybe $21 billion depending on definitions of how much oil actually spilled into the Gulf — said Environmental Law Institute attorneys Jordan Diamond and Jay Austin.