Creditors from bankrupt oil and…
Oil prices spiked on Monday…
On Monday the trial began to determine whether BP’s actions during the 20th April 2010, Deepwater Horizon blowout and spill were of sufficient level as to be grossly negligent and therefore warrant higher fines and punitive damages.
BP, facing fines of as much as $18 billion, is trying to convince the US District Judge Carl Barbier that the amount of oil spilled into the Gulf of Mexico is far less than the US are claiming, hoping that a decision in their favour will help reduce the fines.
BP claim far less oil spilled than estimated. (NY Times)
The decisions that will be made in this part of the trial will mean billions of dollars to BP.
Brian Barr, the lawyer for the plaintiff, opened his prosecution with the statement that “the evidence will show BP’s outright lies caused the oil to flow.
BP willfully, with the intent to deceive, misrepresented its knowledge of the flow rate causing it to eschew available source control methods that would have stopped the flow of oil weeks earlier.”
Mike Brock, the lawyer for BP, replied by stating that his client had done everything in its power to stop the flow of oil.
If Judge Barbier finds in favour of BP’s assessment that the spill was 40 percent smaller than the US government has been estimating, this could help to reduce the maximum fine that BP faces under the US Clean Water Act by as much as $7.5 billion.
If Barbier finds that BP’s actions caused the spill to endure longer than necessary, then the co-defendants, Transocean and Halliburton, could have their share of responsibility dropped by as much as 70%.
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John Levy, a maritime lawyer from New Jersey, explained to Bloomberg that the judge is probably going to compromise on the oil spill estimates, and that finding BP guilty of gross negligence in its actions after the blowout is likely to be very difficult due to the large participation of the US government and other experts in dealing with the spill.
BP set aside $43 billion to pay for any costs related to the oil spill, and claim that they have already spent over $26 billion on the clean-up and claims.
The company’s shares fell 40% in the weeks following the blowout, and as they trial weighs heavy on investor’s minds the shares are still down 31% compared to the day before the incident.
By. Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com