The Deepwater Horizon oil rig burns in the Gulf of Mexico after an explosion… (Gerald Herbet / Associated…)
Oil giant BP said it is confronting more than $34 billion in damage claims related to the Deepwater Horizon explosion in the Gulf of Mexico and the nation's biggest offshore oil spill.
Louisiana, Alabama, Mississippi and Florida presented their claims to BP for alleged losses, including economic losses and property damage as a result of the oil spill. BP said it is evaluating these claims.
The British company made the disclosure Tuesday in its latest financial statement.
“BP considers the methodologies used to calculate these claims to be seriously flawed, not supported by the legislation and to substantially overstate the claims,” the company said. “Should these claims proceed to trial, BP will defend vigorously against them.”
The explosion on the night of April 20, 2010, led to the deaths of 11 oil rig workers and unleashed a gush of oil from broken equipment on the seabed that continued for nearly three months off the Louisiana coast. More than 200 million gallons of oil were spilled, shutting down commercial fisheries, destroying the summer beach season along part of the coast and fouling coastal wetlands.
As a result, BP began restructuring and selling off assets. In October, the company agreed to sell its 50% stake in a Russian oil company, TNK-BP, for about $27 billion.
This was disclosed in the company fourth quarter earnings report in which BP said net profit fell to $1.62 billion, or down nearly 80%, from $7.69 billion from last year.
In the quarter, BP said it took a $4.1 billion charge reflecting a settlement agreement with the federal government when it plead guilty to manslaughter and other charges from the explosion. The company said the total cumulative net charge for the Gulf of Mexico incident at the end of the year was $42.2 billion.
“We remain prepared to settle the remaining civil claims,” BP Chief Executive Robert W. Dudley said on a conference call. “But only on reasonable terms.”
In trading, BP's stock was up 49 cents, or more than 1%, to $44.10.
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