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BP to pay US government $20.8 billion for Gulf oil disaster

BP to pay US government $20.8 billion for Gulf oil disaster

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BP To Cut 3000 Jobs As Earnings Plunge
Photo by Spencer Platt/Getty Images

A federal judge has approved BP’s $20 billion settlement over its 2010 oil spill, the Associated Press reports. First reached in October, the final settlement amount accounts for civil claims against the company set forth by the Department of Justice and five Gulf states. US Attorney General Loretta Lynch previously called the settlement "the largest with a single entity in American history."

While $5.5 billion will go toward penalties incurred under the Clean Water Act, most of the money will be given to five states — Alabama, Florida, Louisiana, Mississippi, and Texas — and 400 local government entities to cover damages from the spill. BP has already spent a reported $28 billion on cleanup and compensation. The Deepwater Horizon incident occurred after an offshore oil rig exploded in the Gulf of Mexico and consequently dumped 4.9 million barrels of oil into the surrounding water. Eleven people were killed and marine life in the area was devastated.