Oil giant BP plc’s (BP) ongoing court case tied to its 2010 Gulf of Mexico (GoM) oil spill suffered a setback on Wednesday. In a 2-1 judgment, the 5th U.S. Circuit Court of Appeals rejected BP’s bid to stop payments to businesses that have not proved their damage from the spill. The company has already appealed to the U.S. Supreme Court to review the court order on the settlement. The bone of contention per the company is that the lower court ruling will force it to pay for economic damages to business without the claimants having to prove their losses resulted from the spill.
As a reminder, on Apr 20, 2010, offshore driller Transocean Ltd’s (RIG) ultra-deepwater Horizon drilling platform, contracted to BP, sank following an explosion while operating in the U.S. GoM off the coast of Louisiana. The incident killed 11 workers and spewed more than 200 million gallons of crude in what was touted as the country’s worst oil spill ever. Subsequently, a moratorium was imposed on offshore drilling at water depths of more than 500 feet in the region, which was lifted on Oct 12, 2010.
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 and Halliburton Company (HAL). Several other companies have also been taken to court.
BP estimates the total payment under the spill compensation to exceed $9.2 billion. Under a substantial settlement deal reached last spring, thousands of Gulf Coast businesses and residents hurt by the 2010 BP oil spill in the Gulf of Mexico have started to receive payments.
London-based BP plc is one of the world's largest energy companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemical products. It operates in three segments: Exploration and Production, Refining and Marketing, and Other Businesses and Corporate.
BP – U.K.’s third largest oil company by market value after Royal Dutch Shell plc (RDS.A) – holds a Zacks Rank #3 (Hold).
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