• Sat
  • Dec 27, 2014
  • Updated: 7:52am
NewsWorld
GULF DISASTER

Billions of dollars at stake as BP oil spill trial starts

Case to determine cause, how much oil spilled and the environmental and economic damage

PUBLISHED : Tuesday, 26 February, 2013, 12:00am
UPDATED : Tuesday, 26 February, 2013, 10:06am
 

Billions of dollars are at stake this week at the opening of a complex trial to determine how much BP should pay for the devastating 2010 Gulf of Mexico oil spill.

The British energy giant has already resolved thousands of lawsuits linked to the deadly disaster out of court, including a record US$4.5 billion plea deal with the US government in which BP pleaded guilty to criminal charges and a US$7.8 billion settlement with people and businesses affected by the spill.

US prosecutors are determined to prove at the trial due to start yesterday that gross negligence caused the April 20, 2010 blast that killed 11 workers and sank the BP-leased Deepwater Horizon rig, sending millions of barrels of oil gushing into the sea.

BP is equally determined to avoid a finding of gross negligence, which would drastically increase its environmental fines to as much as US$17 billion.

"Gross negligence is a very high bar that BP believes cannot be met in this case," BP group general counsel Rupert Bondy said. "This was a tragic accident, resulting from multiple causes and involving multiple parties."

Gross negligence is a very high bar that BP believes cannot be met in this case

BP is also hoping to shift much of the blame - and cost - to rig operator Transocean and subcontractor Halliburton, which was responsible for a faulty cement job on board the offshore drilling platform.

It took 87 days to cap BP's runaway well, which blackened beaches in five states and crippled the region's tourism and fishing industries in a tragedy that riveted the world. BP spent more than US$14 billion on the response and clean-up and paid another US$10 billion to businesses, individuals and local governments that did not join the class-action lawsuit.

It remains on the hook for billions in additional damages, including the cost of environmental rehabilitation.

The first phase of the civil trial at the federal courthouse in New Orleans will determine the cause and apportion fault for the disaster.

The second phase, not expected to start for several months, will determine exactly how much oil was spilled in order to calculate environmental fines.

BP insists the government overestimated how much oil gushed out of the well by "at least 20 per cent".

The third phase will deal with environmental and economic damages.

"It's a very complex piece of litigation," said Ed Sherman, a Tulane Law professor who has closely monitored the case.

While the US$7.8 billion settlement reached last year resolved most of the economic and medical claims, scores more remain from insurers, racetracks, casinos, financial institutions and state and local governments.

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