The shares of BP plc (ADR) (NYSE:BP) soared nearly 5 percent after a U.S. Judge lowered the fine to $13.7 billion from an earlier estimate of $18 billion. As per the latest ruling, the company was responsible for dumping 3.2 million barrels of oil, a quarter less than government estimates, in the Gulf of Mexico in 2010.
The U.S. District Judge, Carl Barbier, overruled the government’s estimate of 4.2 million barrels of oil, which could have cost $18 billion to the oil company, along with the BP plc (ADR) (NYSE:BP)’s 2.45 million barrels estimate. However, in both the cases, this would be the largest fine put up on a company under the U.S. Pollution Act.
Earlier, Barbier found the exploration unit of BP plc negligent in the Deepwater Horizon Explosion triggering the biggest fine in the U.S history. The judge would initiate a trial next week for calculating the amount of fine with the maximum penalty of $4,300 per barrel. Barbier is likely to consider the efforts of BP plc (ADR) (NYSE:BP) in minimizing the damages of the accident.
The Deepwater Horizon oil spilling accident is the biggest mistake made by BP plc, which has already resulted into damages in excess of $28 billion. The company has set apart additional $3.5 billion for covering the pollution charges. BP plc is hoping for fines in the lower-end of the statutory limits.
BP plc (ADR) (NYSE:BP) paid $9.7 billion to the different private firms and individuals who incurred damages because of the accident. While talking about the overall expenses last year, the company expected a net cap of $43 billion for all the damages.
Anadarko Petroleum Corporation (NYSE:APC) is another oil company facing penalties in excess of $1 billion put by the U.S. government, although Barbier ruled out any part of the company in the incident.
This article has been written by Prakash Pandey.