Is BP Getting a Raw Deal?

The Deepwater Horizon oil spill was smaller than the U.S. is claiming, driller BP (NYSE:BP) says. The energy company told a federal court it has documents that prove the American estimate of the 2010 rig explosion having spilled almost 4.9 million barrels of oil in the Gulf of Mexico was exaggerated.

“The United States is using a privilege intended to protect discussions and deliberations in advance of policy determinations to shield documents reflecting discussions and deliberations concerning a factual issue, the amount of oil discharged,” BP said in its filing.

According to the London-based company, evidence from almost 10,000 documents suggests the U.S. government estimate on the April 2010 spill from the Macondo well is incorrect. Another 70,000 documents are being held by the government, according to BP. The greater the extent of the spill, the more money BP will have to cough up in fines. Its civil pollution fines may be as high as $17.6 billion under the U.S. Clean Water Act, based on the number of barrels spilled.

If BP is found guilty of simple negligence, the company may have to pay $1,100 for each barrel. A gross negligence judgment, which determines a conscious action or omission on the company’s part, can increase fines up to $4,300 per barrel.

“It is the United States that has brought this case, seeking large monetary penalties against BP,” the oil company said. “When the government seeks relief, it is fundamentally unfair to allow it to evade discovery.”

BP has put aside $37 billion to cover the costs associated with the spill, including a $20 billion trust set up for spill victims. Earlier this month, BP agreed to pay almost $7.8 billion on claims of economic loss, property damage, and injuries. However, that does not cover any federal or state government environmental damages.

“Despite the United States’ declaration that it was ‘ground truth,’ the August 2 estimate was in fact the fourth official estimate” to be released, BP’s court filing added.

To contact the reporter on this story: Aabha Rathee at

To contact the editor responsible for this story: Damien Hoffman at

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