The shares of BP plc (ADR) (NYSE:BP) witnessed slight positive movement in the extended hour trading after a U.S. judge ruled out the $18 billion fine settlement from the government and restricted maximum fines to $13.7 billion. At the same time, the judge overruled government’s estimate of 4.2 million barrels of oil spill.
In the biggest U.S. pollution penalty case, BP plc can take a sigh of relief as the U.S. District Judge Carl Barbier has overruled the $18 billion fine set by the U.S. Government. Earlier, Barbier found the exploration unit of BP plc (ADR) (NYSE:BP) guilty for the oil spill that occurred out of gross negligence and under the legal provisions, Barbier could charge up to $4,300 per barrel or less taking into account the efforts put up by the company to control the damage.
The oil spill was a complete disaster for the company as it paid up to $9.7 billion to different private companies who incurred damages because of the accident. According to David Uhlmann, former head of the environmental crime division of the Justice Department, said,
“Today’s ruling is a major victory for BP and reduces by billions their potential liability. A fine in excess of $10 billion remains possible but is now less likely.”
Another important fact to consider is that BP plc (ADR) (NYSE:BP) has spent over $28 billion against different damage claims and cleanup efforts. The oil company estimated net charge of $43 billion to cover all the spill related costs. At the same time, the company is not expecting a maximum fine from Barbier as the company is hoping the fine to stay lower considering its efforts to minimize the spill damage.
BP plc (ADR) (NYSE:BP) was not the only company involved in the Deepwater Horizon drilling rig disaster. Transocean LTD (NYSE:RIG) and Halliburton Company (NYSE:HAL) are the other companies involved in the accident. BP plc was held 67 percent responsible for the oil spill whereas Transocean LTD (NYSE:RIG) had 30 percent and Halliburton Company (NYSE:HAL) shared 3 percent responsibility of the incident.
This article has been written by Prakash Pandey.