BP, Transocean reportedly nearing oil spill settlement agreements

BP Plc (NYSE: BP) and Transocean Ltd. (NYSE: RIG) reportedly are closer to settlement agreements with the U.S. Justice Department for civil and criminal charges related to the 2010 Gulf of Mexico oil spill.

BP Plc (NYSE: BP) and Transocean? ? Transocean Latest from The Business Journals Chevron seals and abandons Nigeria well that burnedChevron seals and abandons Nigeria well that burnedTransocean to sell up to B in Middle East rig assets Follow this company Ltd. (NYSE: RIG) are reportedly closer to settlement agreements with the U.S. Department of Justice? ? U.S. Department of Justice Latest from The Business Journals Memphis still good for real estate investment, report finds Follow this company for civil and criminal charges related to the 2010 Gulf of Mexico oil spill.

People familiar with the process have told The Wall Street Journal that settlement discussions have picked up recently, though they did not provide specific details of those discussions.

Any deals would likely include billions of dollars in fines and penalties, and without a deal, BP could face tens of billions of dollars in civil and criminal penalties, the Journal reports.

Earlier this month, the Financial Times reported that BP was trying to settle all criminal and civil penalties and damages from the Deepwater Horizon explosion for less than $15 billion, a sum significantly smaller than the $25 billion federal authorities are seeking.

Last month, the Journal reported federal prosecutors were investigating BP regarding oil spill estimates, which could affect BP?s final bill for civil fines under the U.S. Clean Water Act. The government estimates about 4.9 million barrels of oil spilled in total, in which case BP could pay between $5.4 billion and $21 billion in fines. BP estimates the amount spilled at 20 to 50 percent less than the government?s figure. Whether BP can be considered grossly negligent also factors into the total amount of the fines.

BP is likely to face between $7 billion and $10 billion in civil Clean Water Act fines and between $5 billion and $10 billion in criminal penalties, the Journal reports.

BP in April reached a definitive settlement agreement worth about $7.8 billion in the case brought by thousands of individuals and businesses claiming damages from the 2010 oil spill. The settlement does not include separate claims against BP made by the Department of Justice or other federal agencies, the company's partners in the Macondo well drilling, Gulf states or shareholders.

Olivia Pulsinelli is the web producer for the Houston Business Journal's award-winning website.

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