By Andrew Restuccia - 04/18/12 03:42 PM EDT
BP estimates that the settlement will cost the company about $7.8 billion. BP said it expects the money to come from a $20 billion fund the company set aside to compensate victims of the disaster.
The April 20, 2010, blow-out of BP’s Macondo well and the resulting Deepwater Horizon explosion led to the death of 11 rig workers and dumped 4.9 million barrels of oil into the Gulf over several months.
The settlement sets up a framework for compensating victims who claim economic and property losses as a result of the spill. The agreement establishes “compensation protocol” for current and potential future losses.
If Barbier gives preliminary approval to the settlement, a new facility will open within 30 days to process oil spill claims.
Spill victims had previously been compensated through a program known as
the Gulf Coast Claims Facility (GCCF) that was set up by BP and the
Obama administration in the aftermath of the spill. The GCCF was
overseen by Kenneth Feinberg, a Washington lawyer appointed by President
The parties agreed to a separate settlement to cover medical claims.
“Although claims will not be paid until final approval of the medical settlement agreement, class members will be permitted to file claim forms in advance of any effective date of the settlement to facilitate prompt administration of the medical settlement should it be approved,” BP said in a statement Wednesday.
The settlement establishes a program for compensating those who discover medical problems related to the spill later in life.
BP has already spent more than $22 billion as a result of the disaster, the company said, including more than $8 billion paid to individuals, businesses and government entities and roughly $14 billion spent responding the accident.
The settlement does not resolve all of BP’s legal problems. The company faces Justice Department environmental charges and a criminal probe over disaster, among other legal woes.