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BP will pay states $18.7 billion for 2010 Gulf of Mexico oil spill

BP will pay states $18.7 billion for 2010 Gulf of Mexico oil spill


The payments will take place over 18 years

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BP has reached a settlement in the Gulf of Mexico oil spill case. The Deepwater Horizon disaster, which took place in 2010, killed 11 rig workers and blew the cap off a well, spilling hundreds of millions of gallons of crude oil into the Gulf for months. Now the company will have to pay $18.7 billion to the US government and five states over the course of 18 years.

"Largest settlement with a single entity in American history."

The agreement is the "largest settlement with a single entity in American history," said Loretta Lynch, US attorney general. A record $5.5 billion will be used to cover federal penalties under the Clean Water Act, Bloomberg reports. Louisiana, Mississippi, Florida, Texas, and Alabama will also receive large sums relating to the damages caused by the spill. The agreement also involved 400 local government entities, The Wall Street Journal reports.

"This agreement will resolve the largest liabilities remaining from the tragic accident," BP CEO Bob Dudley said in a statement. "For the United States and the Gulf in particular, this agreement will deliver a significant income stream over many years for further restoration of natural resources and for losses related to the spill."

The 2010 disaster was the biggest offshore oil spill in US history; scientists are still trying to figure out just how much damage it caused. Last year, researchers reported that the Deepwater Horizon spill had left an oil ring the size of Rhode Island at the bottom of the sea. Some researchers suggest that the spill may have caused lethal heart defects in two species of tuna and one species of amberjack. Dolphin deaths have also been linked to the spill.

So far, BP has spent more than $28 billion on cleanup and victim compensation. A federal judge ruled that the spill was the result of "gross negligence" on the part of BP last September — a few months after BP won new oil contracts to explore the Gulf of Mexico. The settlement will end all litigation between the BP and the US government; BP shares climbed 4 percent following the announcement.