The Deepwater Horizon incident hit news pages nearly eight years ago. 11 people were killed, 17 more were injured, and millions of barrels of crude oil were released into the sea. BP has faced extreme costs from the Deepwater Horizon explosion, and those costs have continued to climb.
The BP Deepwater Horizon Costs Have Reached $65 Billion
BP has had to take out a new charge for the Deepwater Horizon spill—a charge that brings the total costs of the Deepwater Horizon case to $65 billion for the London-based company. The current $65 billion total cost is a mix of litigation fees and clean-up costs. The new costs were driven by successful litigation claims, forcing BP to pay out charges that are seven times higher than previously anticipated. These claims were part of the Court Supervised Settlement Program, which funneled Deepwater Horizon claims into one collective litigation pile. One of the representatives of the program stated hundreds of claims are still outstanding, meaning BP will potentially face more claim payouts in the future.
BP Historically Downplayed the Costs & Impact of Deepwater Horizon
From the beginning, BP never accurately estimated costs and the impact of Deepwater Horizon. When the incident initially occurred, BP’s prediction of oil leakage was 1,000 barrels a day. The real figure was 53,000 barrels a day. This leads many to suspect BP’s claims when it comes to disaster announcements.
However, BP has also not accurately informed their shareholders of Deepwater Horizon costs. In July 2016, BP announced it could “now reliably estimate all of its remaining material liabilities.”
Despite this claim, a new $1.7 billion charge is being taken out of BP’s fourth-quarter results to pay litigation outcomes. This charge amount is seven times greater than BP’s anticipated litigation charges for this quarter, meaning BP has once again made questionable claims concerning damages from Deepwater Horizon. This is made worse by the 2016 statement that BP made concerning the accuracy of material liabilities. Overall, BP had estimated $2 billion of cash payments for the spill; however, the payments are now expected to reach $3 billion, which is bad news for BP stockholders.
In regards to the fact that there are still outstanding litigation decisions, and how they could impact BP, an analyst representing the company stated, “We acknowledge the possibility that there might be further provisions in the next few quarters, as the remaining claims might prove to exceed BP’s expectations.”
Companies Water Down Disaster Estimates & Injury Claims
BP’s initial low ball estimate of the amount of oil that would be spilled into the ocean after the blast, in addition to their too-low estimates of the charges they would face after subsequent litigation, shows that companies can serve as unreliable sources of information. This is especially true when a company is working outside of the limelight. Oil rig companies whose workers are injured while on the job will downplay employee injuries to try and sidestep accountability. However, it is a worker’s right to hold rig companies accountable by hiring professional offshore injury attorneys.
If your company is watering down your accident, call (888) 493-1629 for a free case consultation. With our firm, you do not pay unless we win.