The latest settlement comes in the wake of a string of filings and counter-filings between BP and the other corporations associated with the operation of the Deepwater Horizon rig

Oil major BP has agreed to pay $7.8 billion in a settlement reached with claimants affected by the spill from one of its wells in the Gulf of Mexico in April 2010.

Commenting on the landmark settlement reached with the Plaintiffs' Steering Committee, which acts on behalf of individual and business plaintiffs in the multi-state proceedings ongoing in New Orleans, Bob Dudley, BP CEO, said, “The proposed settlement represents significant progress toward resolving issues from the Deepwater Horizon accident and contributing further to economic and environmental restoration efforts along the Gulf Coast.”

In a statement BP noted that it expected that the cost of the proposed settlement would be paid from the $20-billion escrow-account Trust, and would include a promise by BP to make good on $2.3 billion worth of economic loss sustained by the Gulf seafood industry.

The latest settlement comes in the wake of a string of filings and counter-filings between BP and the other corporations associated with the operation of the Deepwater Horizon rig, whose explosion in 2010 killed 11 workers and spewed four million barrels of oil into the Gulf.

Even as an unprecedented and costly operation to halt the leakage and mop up the oil followed, BP in a lawsuit alleged that one of its contracting companies, Halliburton, had destroyed vital evidence relating to the explosion. By late last year Halliburton had already slammed BP with a lawsuit over “for negligent misrepresentation, business disparagement and defamation.” BP has also sued other companies including rig owner Transocean and manufacturer of a failed blowout preventer, Cameron International.

Yet the Obama administration has kept up pressure on BP. Speaking on the occasion of the first anniversary of the Gulf of Mexico oil spill President Barack Obama said, “We continue to hold BP and other responsible parties fully accountable for the damage they have done and the painful losses that they have caused.”

In an interview with The Hindu, Kenneth Feinberg, Mr. Obama's “pay czar” charged with disbursing compensation from the $20 billion fund, said that BP as the “wrongdoer” had to step up and “pay the freight” of the compensation programme. At the time Mr. Feinberg said that that although $3.6 billion had already been disbursed to over 200,000 claimants, the emotional side of the disaster should not be disregarded, in particular the fact that many individuals, families and businesses had seen their livelihoods wiped out.

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