BP Plc (BP) and Plaintiffs’ Steering Committee (PSC) reported that the trial to decide on who should reimburse for the 2010 Gulf of Mexico oil spill has been postponed by one week, to Monday, March 5, 2012.
The delay is expected to give BP and PSC more time to discuss and settle matters. PSC embodies a group synchronizing the efforts of around 90 law firms on behalf of a condominium of owners, fishermen, hoteliers, restaurateurs and others damaged by the April 20, 2010 explosion of the Deepwater Horizon drilling rig and the subsequent oil spill.
The oil spill had catastrophic effects killing eleven people and pouring 4.9 million barrels from the mile-deep Macondo oil well. This is by far the worst offshore U.S. oil spill.
BP does not guarantee that the extended time will result in a positive outcome. BP and the committee are trying to reach a fair decision to compensate all the parties that incurred losses as a result of the spill.
However, a settlement between BP and the businesses would reduce the complexity of the litigation and signify a major step toward achieving a global settlement with its plaintiffs, comprising the federal government, Gulf states of Alabama, Louisiana and Mississippi as well as fishermen, hotel operators and restaurateurs. The trial was expected to take almost a year.
The breach of Clean Water Act along with other laws led the U.S. government to take legal action against the main defendants in the trial––BP, Transocean Ltd (RIG) and Halliburton Company (HAL). Several other companies are also involved in the trial. The penalty amount may go up to tens of billions of dollar as the Gulf states are seeking compensation for their damages, while BP and its drilling partners are also suing each other.
According to sources, BP is chalking out a $14 billion settlement from a $20 billion fund, which was set apart as Gulf Coast Claims Facility for out-of-the-court settlements. An amount of $6 billion has already been paid out of the fund to the spill victims and the company intends to close this chapter by compensating others related to this accident with the remaining amount at the earliest.
BP holds a Zacks #3 Rank, which translates into a Hold rating for a period of one to three months. For the long term, we maintain a Neutral recommendation on the stock.
BP PLC (BP): Free Stock Analysis Report
HALLIBURTON CO (HAL): Free Stock Analysis Report
TRANSOCEAN LTD (RIG): Free Stock Analysis Report
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