BP agrees to pay record criminal fine

The British oil giant, BP, was on Thursday reported to have agreed to pay a record criminal fine of between three to five billion U.S. dollars, thought to be the largest in U.S. history, in a deal with the U.S. Department of Justice over criminal charges related to the 2010 Deepwater Horizon disaster.

It was also expected to plead guilty to criminal misconduct in exchange for a waiver of future prosecution, according to media reports quoting anonymous sources.

The BBC said that “up to four BP staff may be arrested”. It pointed out that the settlement was “much bigger than the largest previous corporate criminal penalty assessed by the Department of Justice, the $1.2bn fine imposed on drug maker Pfizer in 2009”.

“The oil giant has been selling assets worth billions of pounds to raise money to settle all claims. The company is expected to make a final payment of $860m into the $20bn Gulf of Mexico compensation fund by the end of the year.

BP has booked provisions of $38.1bn to cover its liabilities from the incident, but the company has said the final cost remained highly uncertain”, it reported.

Earlier, BP said it was in “advanced discussions” with the Department of Justice and the Securities & Exchange Commission (SEC) about settling criminal and other claims. The discussions were about “proposed resolutions of all U.S. federal government criminal and SEC claims against BP in connection with the Deepwater Horizon incident”, it said in a statement.

The deal would not include a range of other claims, including individual and federal claims for damages under the Clean Water Act, and state claims for economic loss, it added.

The deal followed months of negotiations between BP, the U.S. government and Gulf Coast states to settle civil and criminal liability claims resulting from the disaster.

An explosion on the Deepwater Horizon rig on April 20, 2010 killed 11 workers and released millions of barrels of crude into the Gulf of Mexico over 87 days. An internal investigation by the company concluded that no single cause was behind the accident, but “multiple companies, work teams and circumstances were involved over time”. Other companies included Transocean, and Halliburton.