The oil spill from a BP well that took place in 2010 in the gulf of Mexico. (Photo: Louisiana GOHSEP/CC BY-SA 2.0)

BP to finally pay USD 1000 million to fishing sector

UNITED STATES
Tuesday, May 03, 2016, 23:50 (GMT + 9)

British Petroleum plc. (BP) firm has finally decided to pay off USD 1 billion it owed in compensation to seafood interests affected by the Gulf of Mexico oil spill in 2010.

This decision was taken after a New Orleans federal judge accepted the company’s request to drop the bid to avoid payment of the second half of the USD 2.3 billion compensation amount, Bloomberg reported.

According to Federal Court documents, in 2010 BP was responsible for a massive oil spill in the Macondo Prospect in the Gulf of Mexico for not taking the adequate safety measures and hence the maximum penalty should be enforced.

A study conducted by the National Wildlife Federation (NWF) revealed that the spill caused significant damage to the dolphin and whale populations and that the chain reaction that resulted from the disaster affected the natural eco-systems.

The study also showed that the spill killed a significant number of fish and turtles and that local fisherman and the seafood industry in general were affected.

Mikal Watts, a Texas attorney representing thousands of affected individuals, had claimed that the company owed USD 2.3 billion to the victims but BP dismissed the claim and stated that the amount had been overstated.

“The facts of this case shout fraud. Tens of thousands of Mike Watts’s clients have proved to be phantoms. Mr. Watts’s false representations improperly inflated the value of potential claims against the Seafood Compensation Program and resulted in an overblown USD 2.3 billion fund,” said in this regard BP spokesperson Geoff Morell, as it was informed by BidnessEtc.

Although the company has failed to repair the damage done to its reputation, its decision to pay off the remaining compensation amount is a step in the right direction.

According to Bloomberg, with the lawsuit against Watts’ scheduled for July, it’s hard to predict BP’s next move. Though it is still far from recovering from the damage ensued by the oil spill and the persistent downturn in oil prices, the British oil company has the potential to make a strong comeback.

On the other hand, the US High Court denied BP shareholders request to revive a class action lawsuit against the company. This lawsuit alleged that BP misrepresented its safety procedures prior to the Gulf of Mexico

As Reuters informed, it seems like BP investors attempted to redeem the value of the stock through the class action lawsuit. The appeals court mentioned that some of the BP shareholders were fully aware of the associated risks when they bought the shares.

The company stated that the shareholders’ claims were baseless, and the lawsuit was an attempt to make up for the lost stock value following the incident.

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