US Government Sues BP Over Gulf Of Mexico Oil Spill

The U.S. government is suing BP and four other companies over the world’s biggest offshore oil spill, which left 11 men dead earlier this year.

Deepwater Horizon Fire: The U.S. government is suing BP and four other companies over the world's biggest offshore oil spill, which left 11 men dead earlier this year. Photo: US Coast Guard. via John Amos/Flickr

The Justice Department on Wednesday sued BP Exploration and Production Inc. and eight other companies in the Gulf oil spill disaster in an effort to recover billions of dollars from the largest offshore spill in U.S. history.

America is alleging the oil major, its contractor Transocean, and its partners Anadarko and Mitsui violated environmental laws. The claim also names Lloyds of London, BP’s insurer. The US is seeking unlimited damages on top of the $30bn that BP has already paid for the clean-up and compensation.

The lawsuit leaves open the option for the government to offer evidence of “gross negligence” by the defendants, which has been strongly denied by BP and its contractors. If this allegation is made and proven, fines could top more than $21bn, depending on how many barrels of oil are judged to have been spilt.

News of the suit emerged after the stock market closed in London, but BP’s shares in the US closed 1.3pc lower at $43.86.

According to the suit, the defendants failed to keep the Gulf of Mexico well “under control” and “failed to use the best available and safest drilling technology to monitor the well’s conditions”. It also alleges they did not maintain surveillance, equipment and material that were “available and necessary to ensure the safety and protection of personnel, equipment, natural resources and the environment”.

Eric Holder, the US attorney general, said at a press conference in Washington DC: “We intend to prove that these defendants are responsible for government removal costs, economic losses and environmental damages without limitation. Both our civil and criminal investigations continue.”

The government filed the suit on Thursday in a court in Louisiana, where Judge Carl Barbier is also overseeing the lawsuits filed on behalf of individuals and businesses who claim they suffered economically because of the spill in April. The judge had set Thursday as a deadline for such suits by individuals and businesses to be filed.

BP said that it will “answer the government’s allegations in a timely manner and will continue to cooperate with all government investigations and enquiries”.

Since the spill on April 20, BP has pledged to make safety its chief priority as it seeks to win back political and public opinion in the US, its biggest market. The oil company, which replaced Tony Hayward with Bob Dudley as chief executive in October, also said it’s preparing its Canadian natural gas liquids business for a possible sale as it raises funds to pay for compensation.

BP and the others are being sued under the Oil Pollution Act, seeking compensaiton for damage caused to natural resources, including “salt marshes, sandy beaches, and mangroves” as well as “birds, sea turtles, and marine mammals” that were affected. Halliburton and Cameron, two other contractors who worked on the well, are not mentioned in the filing.

BP and its partners, but not Lloyds of London, are also being separetely targeted by the government under the Clean Water Act, which impose fines according to how much oil was spilt. US scientists believe up to 60,000 barrels leaked into the Gulf each day, but BP claims it could be half this figure. If any gross negligence is proven, the fine could be $4,300 per barrel, or $1,100 if no negligence is found.

The lawsuit says the accident could have been caused by “acts, joint acts, omissions, fault, negligence, gross negligence, wilful misconduct, and/or breach of federal regulations”.

Transocean said it was not liable in the oil spill lawsuit and is indemnified, while Anadarko said it recognised that it may have obligations under federal law but will look to BP to pay all legitimate claims.

Separately, a fresh US embassy cable released by Wikileaks claimed that BP suffered what could have been a similar disaster to the Deepwater Horizon spill when it suffered a blowout at a gas platform in Azerbaijan in September 2008. [via The Telegraph (UK), Yahoo! News, CNN and BBC]

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