$7bn paid in gulf disaster claims – BP

2011-10-14 10:05

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Washington - Oil giant BP has so far paid out around $7bn in compensation claims arising from the deadly oil spill in the Gulf of Mexico last year, a senior executive told US lawmakers on Thursday.

"There has been a spend, a payment of claims about $5.6bn, $5.7bn to individuals and businesses and about $1.3bn to government entities," said Ray Dempsey, Vice President of BP America.

A further $13bn was spent in direct response to the disaster at the Deepwater Horizon drilling rig, but none of that came from a $20bn trust fund BP set up in the wake of the April 20 2010 accident, Dempsey said.

Asked at the House Natural Resources Committee how much BP's final bill would be, the BP executive said no figure had been set aside.

"It was neither a floor or a ceiling. It wasn't meant to represent any total or minimum amount of the cost associated with response to the accident," he told the congressional hearing, referring to monies allocated to the trust fund.

Dempsey gave evidence to the committee alongside officials from Halliburton and Transocean, all of whom were hit with citations on Wednesday for violating oil industry regulations in connection with the disaster, in which 11 people died.

The US Justice Department is also conducting a criminal investigation into the accident, the biggest maritime oil spill in history.

By the time the well was capped 87 days later, 4.9 million barrels of crude had gushed out of the runaway well 1 500m below the surface of the Gulf of Mexico.

All three companies were accused by the US government in Wednesday's action of failing to "protect health, safety, property, and the environment by failing to perform all operations in a safe and workmanlike manner".

It is also alleged that they failed to "take measures to prevent unauthorised discharge of pollutants into offshore waters" and failing to "take necessary precautions to keep the well under control at all times".

The companies have 60 days to respond to the 15 citations issued by the Bureau of Safety and Environmental Enforcement.

To date, BP - which leased the rig and was ultimately responsible for operations - has spent $40.7bn on the disaster and could still be liable for billions in fines, compensation and restoration costs.

- SAPA
Read more on:    bp  |  us  |  environment
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