BP to Settle Federal, State and Local Deepwater Horizon Claims for up to $18.7 Billion With Payments to be Spread Over 18 Years
Release date: 02 July 2015
The Disclosure and Transparency Rules (“DTR”) made by the Financial Conduct Authority govern amongst other matters the disclosure of inside information. Accordingly in compliance with Rule 2.2, BP plc makes the following announcement
Five years on from the Deepwater Horizon accident and spill in 2010, BP has reached agreements in principle to settle all federal and state claims arising from the event.
BP today announced that its US Upstream subsidiary, BP Exploration and Production Inc (BPXP) has executed the agreements with the US federal government and five Gulf Coast states.
The agreement with the states of Alabama, Florida, Louisiana, Mississippi and Texas also includes settlement of claims made by more than 400 local government entities.
The principal payments are as follows:
BPXP is to pay the United States a civil penalty of $5.5 billion under the Clean Water Act (CWA) – payable over 15 years.
BPXP will pay $7.1 billion to the United States and the five Gulf states over 15 years for natural resource damages (NRD). This is in addition to the $1 billion already committed for early restoration. BPXP will also set aside an additional amount of $232 million to be added to the NRD interest payment at the end of the payment period to cover any further natural resource damages that are unknown at the time of the agreement.
A total of $4.9 billion will be paid over 18 years to settle economic and other claims made by the five Gulf Coast states.
Up to $1 billion will be paid to resolve claims made by more than 400 local government entities.
The expected impact of these agreements would be to increase the cumulative pre-tax charge associated with the Deepwater Horizon accident and spill by around $10 billion from $43.8 billion at the end of the first quarter. Separately to these agreements, the total charge reported in BP’s second quarter results will also reflect other items including charges for additional business economic loss determinations.
The principal payments arising from the agreements will be made over extended periods of time as set out in the attached schedule of payments.
NRD and CWA payments are scheduled to start 12 months after the agreements becomes final. Total payments for NRD, CWA and State claims will be made at a rate of around $1.1 billion a year for the majority of the payment period.
Carl-Henric Svanberg, BP’s chairman, said: “Five years ago we committed to restore the Gulf economy and environment and we have worked ever since to deliver on that promise. We have made significant progress, and with this agreement we provide a path to closure for BP and the Gulf. It resolves the company’s largest remaining legal exposures, provides clarity on costs and creates certainty of payment for all parties involved.
“In deciding to follow this path, the Board has balanced the risks, timing and consequences associated with many years of litigation against its wish for the company to be able to set a clear course for the future.
“The Board therefore believes that this agreement is in the best long-term interest of BP and its shareholders. The Board set out its position on the dividend at the first quarter and this remains unchanged by the agreement.”
Bob Dudley, BP’s group chief executive, said: “This is a realistic outcome which provides clarity and certainty for all parties.
“For BP, this agreement will resolve the largest liabilities remaining from the tragic accident and enable BP to focus on safely delivering the energy the world needs.
“For the United States and the Gulf in particular, this agreement will deliver a significant income stream over many years for further restoration of natural resources and for losses related to the spill.
“When concluded, this will resolve not only the Clean Water Act proceedings but also the Natural Resource Damage claims as well as other claims brought by Gulf States and local government entities.”
BP’s chief financial officer, Brian Gilvary, said: “The negotiations were carried out with the goal of reaching a collective solution that would be acceptable for all parties. For BP this will provide certainty with respect to BP’s financial obligations for the matters settled, particularly with the ability to spread payments smoothly over many years.
“The impact of the settlement on our balance sheet and cashflow will be manageable and enables BP to continue to invest in and grow its business, underpinned by a resilient and robust financial framework.”
The agreements in principle are subject to execution of definitive agreements. These will comprise a Consent Decree with the United States and Gulf states with respect to the civil penalty and natural resource damages, a settlement agreement with five Gulf states with respect to State and local claims for economic and property losses, and release agreements with local government entities.
The Consent Decree will be subject to public comment and final court approval. The Consent Decree and settlement agreement with the Gulf states are conditional upon each other and neither will become effective unless (1) there is final court approval for the Consent Decree and (2) local government entities execute releases to BP’s satisfaction.
The agreements do not cover the remaining costs of the 2012 class action settlements with the Plaintiffs’ Steering Committee for economic and property damage and medical claims. They also do not cover claims by individuals and businesses that opted out of the 2012 settlements and/or whose claims were excluded from them. BP will continue to defend those claims vigorously. Today’s agreements in principle also do not resolve private securities litigation pending in MDL 2185.
Interest will accrue at a fixed rate on the unpaid balance of the civil penalty and natural resource damages payments, compounded annually and payable in years 15 (CWA) and 16 (NRD).
The interest rate will be fixed at the average market yield on U.S. Treasury securities at 2-year and 3-year constant maturities, quoted on an investment basis by the US Federal Reserve (H.15 Release), for the period from 28 May 2014 to 27 May 2015.
To address possible natural resource damages unknown at the time of the settlement, beginning ten years after the settlement, the federal government and the Gulf states may request accelerated payment of accrued but unpaid interest on the natural resource damages payments.
Parent company guarantees for these payments will be provided by BP Corporation North America Inc. as the primary guarantor and BP p.l.c. as the secondary guarantor.
The federal government and the Gulf states may jointly elect to accelerate the civil penalty and natural resource damages payments in the event of a change of control or insolvency of BP p.l.c.
In addition to these agreed settlement payments, set out in the table above and the payment of up to $1 billion for local government claims, BPXP has also agreed to pay $350 million to cover outstanding NRD assessment costs and $250 million to cover the full settlement of outstanding response costs, claims related to the False Claims Act and royalties owed for the Macondo well. These additional payments will be paid over nine years, beginning in 2015.
The Deepwater Horizon Trust Fund, established to meet claims in 2010 after the oil spill, is expected to be used to make payments (other than CWA fines and penalties), including $1 billion of state claims and up to $1 billion to settle local claims.
This press release contains certain forward looking statements including statements regarding expectations with respect to finalizing the Consent Decree, timing of court approval, schedule of payments under the agreement and financial impact of the settlement on BP. By their nature forward looking statements involve risk and uncertainty because they relate to future events and depend on circumstances that will or may occur in the future and are outside the control of BP. Actual results may differ from those expressed in such statements depending on a variety of factors including those discussed in this release.
BP Press Office, London
Phone: +44 (0)207 496 4076
BP Press Office, US
Phone: +1 281 366 4463
Please join us for an afternoon workshop titled “An Interactive Sea Level Rise Workshop: Protecting Coastal Communities by Linking Science and Citizens” on Friday August 14th, 2015 from 11:30AM-2:00PM at the Grand Bay NERR Coastal Resource Center.
This is a FREE workshop open to the public. Elected officials, planners, port managers, planning commissions, utility managers, public works staff, GIS technicians and land resource managers are encouraged to join and will benefit from this training.
Participants in this workshop will learn how Sea Level Rise (SLR) may impact coastal communities in the future. The goal is to provide participants the necessary tools to plan and protect communities should SLR become a threat. There will be multiple presenters discussing these tools throughout the workshop.
Registration before August 11th is required as space is limited to only 30 participants. To register, please visit http://www.gulfalliancetraining.org . Lunch will be provided.
Gov Bentley, AG Strange announce multi-billion dollar settlement with BP
Posted: Jul 02, 2015 8:09 AM CDT
Updated: Jul 02, 2015 8:09 AM CDT
MONTGOMERY, AL (WALA) -
Alabama Governor Robert Bentley and Attorney General Luther Strange announced Thursday that BP has agreed to pay the State of Alabama $1 billion in economic damages and approximately $1 billion in natural resource damages and federal penalty monies to resolve the State’s claims arising from the 2010 Gulf oil spill.
“As part of an $18.5 billion global settlement announced today, BP has agreed to pay the State of Alabama $1 billion in economic damages from the April 2010 Gulf oil spill,” Attorney General Luther Strange said. “This is a major victory for the people of Alabama who will benefit for years to come.”
Attorney General Strange joined Governor Robert Bentley in making the announcement Thursday morning. The $1 billion economic settlement funds will be deposited in the state’s general fund over the next 18 years. The precise allocation of these payments to the general fund will be determined at a future date, as will the State’s receipt of approximately $1 billion in settlement monies for natural resource damages and federal penalties.
This landmark settlement with BP may be the most significant economic damages case ever handled by the Alabama Attorney General’s office.
“Five years ago when I took over the State’s case against BP, I promised to make the State of Alabama whole and to do so without spending a penny on outside counsel,” said Attorney General Strange.
“Today, I am pleased to announce that both goals have been accomplished. This is a remarkable achievement for our state and a tremendous legacy for the future.”
Attorney General Strange went out of his way to praise his team, led by Special Deputy Attorney General Corey Maze, who worked tirelessly to achieve this historic settlement.
In January 2011, General Strange was appointed by the court to serve as Coordinating Counsel for the Gulf States in this historic litigation. In March of this year, Strange announced that Alabama had been chosen to be the first State to receive a jury trial against BP for economic damages. That trial was slated to begin in the spring of 2016.
All content © 2015, WALA; Mobile, AL. (A Meredith Corporation Station). All Rights Reserved.
EPA is inviting you to participate in the Low impact development, green infrastructure workshop to be held in Biloxi, Mississippi on July 15-16, 2015. This workshop is being held in cooperation with the Mississippi Department of Environmental Quality (MDEQ), the Mississippi Department of Marine Resources (DMR), the Mississippi Chapter of the American Planning Association (MAPA), and Allen Engineering and Science, Inc. (AllenES). To improve water quality in urban waters located in Mississippi, managing stormwater to predevelopment hydrological conditions for newly developed and redeveloped sites is a goal of the existing Phase I and II municipal separate storm sewer system (MS4) permits.
The workshop will focus on water quality and non-point source pollution management practices utilizing Low Impact Development (LID) and Green Infrastructure (GI) techniques. The goal is to educate municipal staff and engineers on how to design sites to meet predevelopment conditions. The workshop will include case studies of projects that have implemented stormwater controls particularly in the coastal areas to meet the MS4 permits' goals. Also anticipated at the workshop will be MDEQ’s discussion on permit expectations for the next Phase II MS4 permit.
The workshop is open to MS4s, State representatives, developers,and other stormwater practitioners involved the municipal stormwater program. The workshop is free, but attendees will need to register online.
Provided below is the link to handle registration for the EPA LID/GI Workshop.
17 June 2015
Alabama’s Timberland Acreage Increases to 23 Million Acres
All it takes is a drive down virtually any road in Alabama for one to come to the conclusion that there is an abundance of timberland – commercial forestland – in the state. This conclusion is substantiated by 2014 Forest Inventory & Analysis (FIA) data which shows that the amount of timberland in Alabama has increased to an all-time high of 23 million acres. The only states in the nation having more timberland than Alabama are Georgia and Oregon. These 23 million acres of timberland account for 69 percent of Alabama’s total area, an increase of 360,000 acres since the year 2000.
Despite the perception of some that trees and forests are vanishing, FIA data also shows an increase in timber volume over previous years. The fact is that the amount of timber growth exceeds the amount of timber being harvested annually. More specifically, for every ton of timber harvested, 1.55 tons of new growth are added to our forests each year. Total timber volume has increased 18.7 percent since 2000 to a total of 1.17 billion tons. Softwood timber volume (primarily pine species) has increased 31.1 percent, while hardwood timber volume has increased 7.6 percent. “The annualized inventory of Alabama’s forests continues to show that all the benefits we derive from our vast forests – wood products, clean water, clean air, wildlife habitat, and recreational opportunities – can be managed in a sustainable way. The fact that more land is being put into timberland is icing on the cake,” says State Forester Greg Pate.
Another common misperception is that Alabama’s timberland is dominated by pine trees. Yes, there are a considerable number of pines in the state, but the number of timberland acres comprised of hardwood stands is virtually identical to the number of acres composed of pine stands. Currently, there are 9.87 million acres of timberland inhabited predominantly by hardwood tree species, while another 9.90 million acres are comprised primarily of pine tree species. The remaining 3.23 million acres are home to a mixture of hardwood and softwood tree species.
For the full report pertaining to the current status of Alabama’s forest resources, visit the Alabama Forestry Commission’s website at http://www.forestry.alabama.gov/PDFs/alabamaForestResourceReport.pdf.
Contact: Brian Hendricks
Telephone: (334) 240-9370
May 28, 2015
Contact: Suzanne Langley, Executive Director, 205-719-3678
Dauphin Island & Eufaula NWR Prioritized as Globally Significant Important Bird Areas
Birmingham, AL – The U.S. Important Bird Area (IBA) Committee has prioritized two sites in Alabama as globally significant for birds of conservation concern documented in reliable numbers at these locations. Dauphin Island and Eufaula National Wildlife Refuge (NWR) are considered sites of global significance because both locations provide essential habitat for birds classified as critical, endangered, vulnerable or near-threatened.
Bird species of global conservation concern at these Alabama sites include:
• Dauphin Island: Semipalmated Sandpiper, Piping Plover
• Eufaula NWR: Rusty Blackbird
Important Bird Areas provide essential habitat for one or more species of breeding, wintering or migrating birds. As the U. S. Partner for Birdlife International, National Audubon Society identifies and works to conserve a network of IBAs throughout the U.S. This network of sites is comprised of state-level IBAs prioritized as continentally or globally significant by the U. S. IBA Committee, a panel of nationally recognized bird experts.
With the announcement changing Dauphin Island and Eufaula NWR from state-level to global IBAs, the number of globally significant bird areas in Alabama grows to six including: Conecuh National Forest, Talladega National Forest (Okmulgee District) and Talladega National Forest (Shoal Creek/Talladega District) all for providing essential habitat for the Red-cockaded Woodpecker, an endangered species; and, Wheeler National Refuge for Rusty Blackbird habitat. Both Dauphin Island and Eufaula NWR were among the 12 state-level IBAs.
The Important Bird Areas Program, coordinated by Birdlife International, relies on local stewardship and focuses on engaging individuals, private landowners, local communities, businesses, partner organizations and government agencies in site conservation.
Birmingham Audubon is a staffed, urban chapter of National Audubon Society representing members and supporting conservation and recreational programs in seven central Alabama counties in addition to working with Alabama Audubon chapters on bird and habitat conservation projects throughout Alabama. Birmingham Audubon and Mobile Bay Audubon coordinate the Audubon Coastal Bird Survey in Mobile and Baldwin Counties.
Alabama Gulf Coast Recovery Council releases Center of Excellence Competitive Process, Solicitation for Proposals
May 13, 2015 – Following a 45-day public comment period, the Alabama Gulf Coast Recovery Council (AGCRC) has released its Center of Excellence Research Grants Program Competitive Process and related Solicitation for Proposals. Click here to view the released document.
May 13, 2015 - The Alabama Gulf Coast Recovery Council (AGCRC) is now soliciting proposals from non-governmental entities and consortia, including public and private institutions of higher learning, in the Gulf Coast Region to serve as Alabama’s Center of Excellence. The solicitation period will be open for over 45 days with the deadline set for June 30, 2015 at 4:00 p.m.
Click here to view the Solicitation for Proposals.
The NEP has released an RFP for Benthic Habitat/SAV Mapping. All interested parties should review the request in our Library of Documents or download the RFP by clicking here. Deadline for submission is May 28th at 4:00 p.m. Anticipated contract start date is June 15th.