BP loses bid over Gulf oil payouts
- 12 January 2014
- From the section Business
BP has lost an appeal to cancel the terms of its multi-billion-dollar settlement with businesses over the 2010 Gulf of Mexico oil spill disaster.
A US federal appeals court on Saturday upheld the terms of the original 2012 settlement.
The UK oil giant has supported compensation for businesses harmed by the disaster.
But it argued that the terms of the existing deal meant that some huge sums were being paid for false claims.
In 2012, BP agreed to make payments to those who suffered economic losses as a result of the disaster aboard the Deepwater Horizon drilling rig, which triggered the worst offshore oil spill in US history.
The blast killed 11 workers and released an estimated four million barrels of oil into the gulf.
However, BP complained that the payout formula worked out by court-appointed claims administrator Patrick Juneau was too generous and meant that people and businesses were being paid huge sums for false claims.
On Friday, the US Circuit Court of Appeals ruled the original judge, Carl Barbier, did not err by failing to determine whether the class of eligible claimants included individuals who haven't actually suffered any injury.
It means that the UK oil giant may have to pay out much more than it originally thought it would have to.
BP originally projected that the settlement would cost $7.8bn (£4.8bn) but last year increased its estimate to $9.6bn.
BP has faced about $42.4bn in criminal and civil charges since the disaster.