BP expresses 'significant uncertainty' about settlement for 2010 Gulf spill

The British oil firm BP on Tuesday warned it might be unable to reach a settlement with the U.S. government over the 2010 Gulf of Mexico spill.

“BP is in ongoing discussions with the DOJ [Justice Department] and other federal agencies regarding a possible settlement of these claims and whilst it is ready to settle on reasonable terms, a number of unresolved issues remain and there is significant uncertainty as to whether an agreement will ultimately be reached,” BP said Tuesday in its third-quarter earnings report.

BP could owe as much as $21 billion in Clean Water Act fines alone, on top of potential criminal penalties for gross negligence for the incident that dumped more than 4 million barrels of oil into the Gulf and killed 11 people.

Industry analysts have noted BP’s decision last week to sell its stake in Russian joint venture TNK-BP to a Russian oil firm, Rosneft, freed up cash for a possible settlement. 

If the proposed deal goes through, it would give BP $12.3 billion in cash and a 19.75 percent interest in Rosneft.

Recent reports suggested DOJ and BP were nearing a settlement that would have given the oil company a tax break on some of its fines.

That arrangement would have let BP pay a portion of its penalties as part of the Natural Resources Damage Assessment. 

The federal government collects those fines — which can only be used for restoring wildlife and habitats — while allowing them to be partially written off as a business expense.

Some lawmakers oppose the plan. Rep. Jo Bonner (R-Ala.) introduced a bill last week that would bar BP from getting a tax break on fines for the spill.

Bonner and a handful of other lawmakers say the proposed settlement would let BP off the hook too easily, while also restricting states’ access to, and use of, penalty fees.

The lawmakers instead want BP to pay its fines through the Clean Water Act, which gives penalty money directly to affected states. 

They contend that doing otherwise would violate the Restore Act, which says 80 percent of fines collected must be given directly to the states for restoration.