Gulf of Mexico Oil Spill: BP Wins US Appeals Court Order Halting Some Spill Payments

BP won an appeals court order in the US, stopping some payments to people and businesses whose losses could not be linked to the 2010 Gulf of Mexico oil spill.

The ruling could spare the company of extra costs under its $9.2bn (£5.6bn, €6.78) disaster settlement deal with those who suffered economic losses because of the largest US offshore oil spill, off the coast of Louisiana.

On 2 December, a divided 5th US Circuit Court of Appeals in New Orleans halted further payments to the plaintiffs who did not suffer property damage or economic loss as a result of the oil spill.

The appeals court ruling overturns US District Judge Carl Barbier's earlier decision, upholding settlement administrator Patrick Juneau's evaluation methods.

"This court's expressing its views through two different opinions may have created interpretive difficulties on the remand, but the district court erred by not considering the arguments on causation," according to the appeals court ruling.

BP had complained that the payout formula worked out by Juneau was too generous and that it compensated those who were not harmed by the disaster.

As of 2 December, about $3.78bn had been paid out, according to Juneau's claims website.

BP initially said the economic-settlement would cost $7.8bn but raised that estimate to $9.6bn in July.

Assets Worth $38bn Sold

BP revealed in October that it sold assets worth $38bn to pay for the 2010 Gulf of Mexico oil spill.

In BP's latest financial results, the group said it had raised its overall cumulative charge for the spill to $42.5bn.

An explosion on BP's Deepwater Horizon rig on 20 April 2010 killed 11 workers and sent more than 4 million barrels of oil into the sea, one of the worst environmental disasters in history.

Earlier in October, lawyers for BP and the US federal government disagreed over methods used to assess the size of the oil spill.

While the US government estimated a total spill size of about 4.9 million barrels of oil, BP claims that just 3.26 million barrels escaped into the sea. A total of 810,000 barrels of oil collected during the clean-up is excluded from the spill size.

The appeal is BP Exploration & Production Inc. versus Deepwater Horizon Court-Supervised Settlement Program and Patrick Juneau in his official capacity, 13-30315, US Court of Appeals for the Fifth Circuit (New Orleans).

The lower court case is In re Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, 10-md-02179, US District Court, Eastern District of Louisiana (New Orleans).