BP BP today announced that it has reached agreement with the United
States government, subject to court approval, to resolve all federal criminal
charges and all claims by the Securities and Exchange Commission (SEC) against
the company stemming from the Deepwater Horizon accident, oil spill, and
response.
TERMS OF RESOLUTION
As part of the resolution, BP has agreed to plead guilty to 11 felony counts
of Misconduct or Neglect of Ships Officers relating to the loss of 11 lives;
one misdemeanor count under the Clean Water Act; one misdemeanor count under
the Migratory Bird Treaty Act; and one felony count of obstruction of
Congress. This resolution is subject to U.S. federal court approval.
Thirteen of the 14 criminal charges pertain to the accident itself and are
based on the negligent misinterpretation of the negative pressure test
conducted on board the Deepwater Horizon. BP acknowledged this
misinterpretation more than two years ago when it released its internal
investigation report. Today's agreement is consistent with BP's position in
the ongoing civil litigation that this was an accident resulting from multiple
causes, involving multiple parties, as found by other official investigations.
The remaining criminal count pertains to two BP communications made to a
member of Congress during the spill response about flow rate estimates. As
part of its resolution of criminal claims with the U.S. government, BP will
pay $4 billion, including $1.256 billion in criminal fines, in installments
over a period of five years. BP has also agreed to a term of five years'
probation.
Under the resolution with the Department of Justice (DOJ), a total of $2.394
billion will be paid to the National Fish & Wildlife Foundation (NFWF) over a
period of five years. In addition, $350 million will be paid to the National
Academy of Sciences (NAS) over a period of five years.
Pursuant to the terms of the plea agreement, BP has also agreed to take
additional actions, enforceable by the court, to further enhance the safety of
drilling operations in the Gulf of Mexico. These requirements relate to BP's
risk management processes, such as third-party auditing and verification,
training, and well control equipment and processes such as blowout preventers
and cementing. In addition, BP has agreed to several initiatives with academia
and regulators to develop new technologies related to deepwater drilling
safety.
The resolution also provides for the appointment of two monitors, both with
terms of four years. A process safety monitor will review, evaluate and
provide recommendations for the improvement of BP's process safety and risk
management procedures concerning deepwater drilling in the Gulf of Mexico. An
ethics monitor will review and provide recommendations for the improvement of
BP's Code of Conduct and its implementation and enforcement.
Under U.S. law, companies convicted of certain criminal acts can be debarred
from contracting with the federal government. BP has not been advised of the
intention of any federal agency to suspend or debar the company in connection
with this plea agreement. BP will continue to work cooperatively with the
debarment authority.
In its resolution with the SEC, BP has resolved the Commission's Deepwater
Horizon-related claims against the company under Sections 10(b) and 13(a) of
the Securities Exchange Act of 1934 and the associated rules. BP has agreed to
a civil penalty of $525 million, payable in three installments over a period
of three years, and has consented to the entry of an injunction prohibiting it
from violating certain U.S. securities laws and regulations. The SEC's claims
are premised on oil flow rate estimates contained in three reports provided by
BP to the SEC during a one-week period (on April 29 and 30 and May 4, 2010),
within the first 14 days after the accident. This resolution is subject to
U.S. federal court approval.
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