HOUSTON (AP) — 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 Deepwater Horizon disaster killed 11 rig workers and spewed millions of gallons of crude that stained beaches, coated wildlife and polluted marshes.
Texas is receiving nearly $790 million as part of the settlement that resolves years of litigation over the 2010 Deepwater Horizon Oil Spill.
Gov. Greg Abbott says the settlement will allow Texas and the rest of the Gulf Coast to “reinvigorate the economic and environmental health of the region.”
In its lawsuit, Texas claimed the spill cost the state tax revenue, reduced revenues at state parks and injured, destroyed or contaminated coastal habitats and a variety of wildlife.
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.
The deal includes $8.1 billion in payments to state and local governments in Alabama, Florida, Louisiana, Mississippi and Texas for natural resource damage. It also includes a $5.5 billion Clean Water Act penalty, most of which the states would share.
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