The shares of BP plc (ADR) (NYSE:BP) soared in excess of 3 percent in the regular trading session after a lawyer said that the court might reveal Deepwater Horizon (2010) oil spill fine after April only when it receives post-trial briefs from the U.S. government. It is excellent news for the company, which reported lower revenue in its fourth quarter 2014 financial results.
In the arguments concluding on Monday, the oil company did its best to minimize the fines from the maximum penalty of $13.7 billion. According to legal experts, Carl Barbier, U.S. District Court Judge, could even give the ruling before receiving post-trial briefs but it is quite unlikely to go that way. BP plc (ADR) (NYSE:BP) further put forward arguments highlighting its efforts in controlling the damages while stating the inability of its exploration and production unit to bear such a hefty penalty.
On the contrary, the government urged the court to impose maximum penalty or a fine near to the maximum limit only. It is important to understand that Judge Barbier overruled government’s estimate of 4.09 barrels of spillage. Barbier confirmed the size of spill at 3.19 million barrels saving BP plc (ADR) (NYSE:BP) several billion dollars in fine.
In accordance with the Clean Water Act rules, Barbier is likely to consider the efforts of BP plc in controlling damages, previous violations of the company, and its current financial circumstances before ruling out the penalty decision. As per rules, Barbier has the freedom to impose fine of up to $4,300 per barrel under a case of “gross negligence.” BP plc (ADR) (NYSE:BP) said in its defense that the maximum fine for the spill should be $3,000 as the Congress didn’t pass laws to adjust the fine amount at par with inflation.
Earlier this week, BP Plc announced its fourth quarter 2014 financial results with revenues of $74 billion falling 21 percent on a year-over-year basis and earnings of $470 million, 57.2 percent lower on a year-over-year basis.
This article has been written by Prakash Pandey.