BP agrees to $18.7B deal with five states

Associated Press

NEW ORLEANS

Trying to close the books on the worst offshore oil spill in U.S. history, BP agreed Thursday to provide billions of dollars in new money to five Gulf Coast states in a deal the company said would bring its full obligations to an estimated $53.8 billion.

Federal and state government officials touted the record-breaking $18.7 billion agreement as a historic milestone in the Gulf Coast’s recovery. The Deep-water Horizon disaster killed 11 rig workers and spewed millions of gallons of crude that stained beaches, coated wildlife and polluted marshes.

BP also gets a valuable return: Much of the payments, to be made over the next 18 years, could be tax-deductible. And by finally providing shareholders with a clearer cost picture, the London-based oil giant will be freer to embark on new ventures.

“This allows us to manage BP as an oil company,” BP CEO Bob Dudley said during a conference call. He said BP could launch as many as 20 major new projects by 2020, depending on oil prices.

The Justice Department said Thursday’s agreement would be the largest environmental settlement in U.S. history as well as the largest-ever civil settlement with a single entity. Civil claims by the five Gulf states and the federal government were, by far, the largest unresolved piece of BP’s financial obligations for the spill.

BP’s total spill-related cost estimate also includes roughly $29 billion on response and cleanup expenses and compensation for Gulf Coast businesses and residents.