BP 'dumped 3.19 million barrels of oil', faces $16.7 billion in fines

In this handout image provided be the US Coast Guard, fire boat response crews battle the blazing remnants of the off shore oil rig Deepwater Horizon in the Gulf of Mexico on April 21, 2010 near New Orleans. Photo: US Coast Guard via Getty Images

BP faces a maximum fine of $16.68 billion (USD 13.7 billion) after a US judge ruled that the company dumped 3.19 million barrels of oil into the Gulf of Mexico in 2010.

U.S. District Judge Carl Barbier has rejected the US government’s 4.2 million barrel estimate of the spill size, decreasing the potential maximum fine from $18 billion.

Barbier, who conducted a trial without a jury over who was at fault for the disaster, previously found BP’s exploration unit acted with gross negligence in causing the largest offshore oil spill in U.S. history.

Today’s ruling on the spill’s size sets the stage for a trial next week at which Barbier will determine the amount of the fines, based on the law’s provision for as much as $4,300 per barrel released and factors such as what BP did to minimise or mitigate the effects of the disaster.

The London-based oil company has set aside $3.5 billion to cover the pollution fines.

BP has already spent more than $28 billion in spill response, cleanup and claims.

The company had taken a $43 billion charge to cover all the costs, according to an Oct. 28 earnings statement. The ultimate cost is “subject to significant uncertainty,” BP said.

BP didn’t extend the 2010 Gulf of Mexico oil spill by lying about its size or misrepresenting the efforts to contain it, Barbier also found.

Geoff Morrell, a BP spokesman, didn’t immediately return a phone call and e-mail for comment on the ruling.

Macondo Blowout

The blowout of the Macondo well off the coast of Louisiana in April 2010 killed 11 people aboard the Deepwater Horizon drilling rig and spewed oil for almost three months into waters that touch the shores of five states.

The accident sparked thousands of lawsuits against BP, as well as Vernier, Switzerland-based Transocean Ltd. (RIG), owner of the rig that burned and sank, and Houston-based Halliburton Co. (HAL), which provided cementing services for the project.

Barbier conducted two trial phases in 2013, one on fault and gross negligence, the other on the size of the spill and the efforts to contain it.

Barbier said today that 4 million barrels of oil spewed from the well and agreed with both sides that 810,000 barrels were captured by a siphoning device at the wellhead before they could spill into the Gulf.

That left the 3.19 million barrels that will be considered in determining the civil penalty, he said.

The case is In re Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, MDL-2179, U.S. District Court, Eastern District of Louisiana (New Orleans).

''To contact the reporter on this story: Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net David Glovin, Joe Schneider''