BP Agrees to Fork Out Final US$1 Billion of Deepwater ‘Seafood Compensation Claim’

The flames that engulfed the Deepwater Horizon offshore oil rig have long been extinguished, but despite BP’s best efforts legal battles have endured for more than six years. Following the 2010 explosion that killed 10 workers, the oil and gas giant was fiercely pursued by Gulf Coast shrimpers, oystermen and seafood processors. Lawyers sought over US$2 billion in damages, a claim that BP opposed for over two years.

Now, the British owned ‘supermajor’ has yielded to legal pressure and agreed to fork out the full amount of the US2.3 billion dollar ‘Seafood Compensation Program Settlement’ sum sought by Gulf coast fishermen.

Why are fishermen reeling in BP?

In the aftermath of the explosion the subsea gusher spewed more than 4 million barrels of crude into the Gulf of Mexico. The environmental disaster saw beaches across five states swathed in oil, and forced the widespread closure of local fisheries operations. In the wake of the spill BP was ordered to pay US$2.3 billion in compensation to seafood industry claimants.

Something smells fishy…

While BP happily coughed up the first US$1 million, the company balked when its lawyers uncovered suspicious irregularities on a prosecutor’s client list. The company went on to claim that the number of Southeast Asian immigrant fishermen and boat hands filing claims was fraudulently exaggerated, which inflated its final settlement by hundreds of millions of dollars.

While BP is still pursuing civil fraud claims against some parties (including lawyer Mikal Watts who submitted claims riddles with bogus names and Social Security numbers), the company has now dropped its efforts to avoid paying out the second instalment of its $2.3 billion seafood fund compensation claim. Permission was handed down by a federal judge in New Orleans.

"We have withdrawn our claims seeking an injunction against payments by the Seafood Program so the program can be concluded," said Geoff Morrell, a BP spokesperson.

With 10 lives lost and a catastrophic environmental aftermath, it’s pragmatic to say that BP’s safety directives were given a ruthless overhaul post-Deepwater Horizon oil spill. For more information on how health and safety is regulated within the oil and gas industry, ‘Hazardous Environment – Focus on the Area of Use for Device Selection’ explores the challenges and risks associated with specialised equipment, with commentary from expert design and manufacturing Director, Tony Holliday.