News24

Obama sues BP

2010-12-16 09:03

Washington - The Obama administration on Wednesday launched a legal battle against BP Plc and its partners by suing them for the worst offshore oil spill in US history, which could cost the companies billions of dollars.

The lawsuit seeks damages from the well owners BP, Anadarko Petroleum Corp and Mitsui & Co Ltd unit MOEX, and well driller Transocean Ltd and its insurer QBE Underwriting/Lloyd's Syndicate 1036, part of Lloyds of London, for their roles in the Gulf of Mexico disaster.

"While today's civil action marks a critical step forward, it is not a final step," US Attorney General Eric Holder told reporters at a news conference.

"Both our criminal and civil investigations are continuing, and our work to ensure that the American taxpayers are not forced to bear the costs of restoring the Gulf area - and its economy - goes on," he said.

The suit, the first by the US government after the April 20 explosion aboard the drilling rig in which 11 workers died, was filed in a New Orleans federal court which is considering private lawsuits against BP and the others for the spill.

BP, which returned to profitability in the third quarter of 2010, has begun selling assets and amassing a massive warchest to pay for damages caused by the oil spill, which the oil concern has estimated could reach as much as $40bn.

The oil company said on Wednesday it was weighing the sale of its Canadian natural-gas liquids business.

In response to the lawsuit, BP said it is "solely a statement of the government's allegations and does not in any manner constitute any finding of liability or any judicial finding that the allegations have merit."

"BP will answer the government's allegations in a timely manner and will continue to co-operate with all government investigations and inquiries," the company said.

Settlement is a possibility

Legal experts have said they expect the two sides to settle eventually but it could take years.

The lawsuit against BP and others warned that "the full extent of potential injuries, destruction, loss and loss of services is not yet fully known and may not be fully known for many years."

Shares in the companies targeted in the lawsuit fell in the wake of the lawsuit.

The stocks trimmed early losses to close off their lows, with BP down 1.3% at $43.86 and Anadarko Petroleum down 2.3% at $67.41. Halliburton, which wasn't named in the suit, closed near session lows, down 3.1% at $39.79.

The Deepwater Horizon drilling rig blowout spilled about 4.9 million barrels of oil over several months. It fouled resort beaches and fishing grounds and led to hundreds of lawsuits over lost revenues and wages.

Comments
  • william.botha - 2010-12-16 09:39

    I say list the process, sell some shares, create a hedge and all can trade happily ever after. They should pay, and obviously recover the losses from the oil price i.e. the end users, after all they know how to attach ridiculous values to commodities to satisfy their insatiable greed.

  • The Spear - 2010-12-16 09:56

    Ummm, the lawsuit is for something like 4 billion to 16 billion dollars in damages. BP already provided for US 40 billion in their financials for this. BP will actually be relieved about the amounts specified in the law suit.

  • goyougoodthing - 2011-01-06 13:13

    Window dressing. BP is needed, oil is needed. They are as dodgy as it gets.

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