Sky News: BP will pay $175m (£121m) to shareholders who sued the oil company, accusing it of giving them misleading details about a major oil spill.
The group of US investors alleged BP managers understated the severity of the spill, which occurred after the Deepwater Horizon drilling rig blew up in the Gulf of Mexico in April 2010.
More than 4 million barrels of oil flooded into the Gulf in the 87 days it took the London-based oil firm to contain the spill.
Company officials repeatedly estimated that 1,000 to 5,000 barrels of oil were gushing from the well daily, when internal calculations said the real number was more than 10 times that.
According to court papers, from the day of the explosion through to 28 May, 2010, BP’s securities fell in value by 48%, wiping out more than $91bn in market capitalisation and causing the plaintiffs to lose as much as 40% of their investments.
The investors’ lawsuit was filed by the Comptroller of the State of New York and the Attorney General of Ohio, alleging that BP had misrepresented the estimated amount of the spill and their ability to respond to it.
They said that, not only was the disaster a predictable consequence of BP’s failure to implement safety reforms, but BP “possessed actual knowledge of serious equipment failures, maintenance delays, and authorised changes that reduced the safety redundancies on the Deepwater Horizon to such an extent that the company was on notice that just such a disaster was likely to occur”.
Jennifer Freeman, a spokesman for the New York Comptroller’s Office, said: “Investors saw their stock prices plummet after the Deepwater Horizon explosion.
“This settlement helps compensate investors for their losses.”
BP said: “BP and representatives of the post-explosion class have agreed to settle these class claims for the amount of $175m, payable during 2016-2017, subject to approval by the court.
“This settlement does not resolve other securities-related litigation in connection with the Gulf of Mexico oil spill.”
In 2012, BP agreed to pay $525m to settle claims by the Securities and Exchange Commission that the oil company had underestimated the size of the spill in an effort to save stock prices from falling.
The same year, BP said it would pay $4bn to resolve criminal charges regarding pollution violations, misleading Congress and manslaughter for the deaths of the 11 rig workers killed in the explosion.
These were among a series of deals BP has made with groups affected by the disaster, for which it has set aside $56.4bn.
