Settlement with BP over Deepwater Horizon Spill
AUSTIN, October 5, 2015 - Texas Attorney General Ken Paxton today announced that Texas, together with four states and the federal government, had reached a settlement with BP that fully resolves all remaining government claims against the company resulting from the 2010 Deepwater Horizon disaster. Texas’ share of today’s announced settlement totals more than $800 million in money and restoration projects. Combined with money from previous settlements, Texas will ultimately receive more than $1 billion to help restore Texas’ gulf resources.
“The disaster of Deepwater Horizon was a tragedy that touched people’s lives all along the Gulf Coast, from those who love its natural beauty and wildlife, to those who make their living from the water,” Attorney General Ken Paxton said. “This agreement will help restore our natural resources and strengthen the communities that rely on them. Texas as a whole will benefit from this settlement.”
On April 20, 2010, explosions and fires destroyed the Mobile Offshore Drilling Rig (“MODU”) Deepwater Horizon at the site of the Macondo Well, approximately 50 miles from the Mississippi River delta. Eleven people aboard the rig lost their lives; many others were injured. Oil from the Macondo Well flowed into the Gulf of Mexico for months. Oil from the well entered into Texas territorial waters and upon its coastline, causing harm to the coastal area, the estuarine environment and native species, both within Texas waters and migrating to and from Texas waters.
The state of Texas filed a lawsuit against BP Exploration & Production Inc. (“BPXP”), the company that owned and operated the Macondo Well, and associated companies. The lawsuit alleged violations of federal and state law, including the Texas Water Code and the Texas Natural Resources Code.
The lawsuit against BPXP and associated companies is to be settled by a Consent Decree in the U.S. District Court, a related Economic Claims Settlement Agreement, and an agreed dismissal of all remaining claims.
The proposed Consent Decree provides for (1) the payment of civil penalties under the federal Clean Water Act, of which at least $430 million is expected to be directed to projects in Texas in accordance with the Resources and Ecosystems Sustainability, Tourist Opportunities, and Revived Economies of the Gulf Coast States (“RESTORE”) Act; (2) restoration of injured and damaged natural resources, with approximately $238 million directed to projects in Texas; (3) guarantees of payment by BPXP’s parent companies; (4) injunctive relief, and (5) other matters. Restoration of damaged natural resources will be done according to a final restoration plan developed by the Deepwater Horizon Oil Spill Trustees Council, composed of the five gulf states and federal Natural Resource Trustees, pursuant to applicable law and regulations.
In addition to the restoration projects, a proposed Economic Claims Settlement Agreement provides for the payment of $150 million to Texas. A separate order provides for the payment of $1 million in attorneys’ fees. Attorney General Paxton will publish formal notice of the entire settlement in the Texas Register and consider public comment for 30 days before deciding whether to accept the proposed settlement.
This is the third in a series of settlements with companies involved in the Deepwater Horizon disaster. In 2012 the State settled with MOEX Offshore 2007 LLC, a working interest owner in the Macondo Well, for $3.25 million in penalties and another $3.25 million in environmental restoration projects in Texas. Currently, the State is also considering a settlement offer with Transocean Offshore Deepwater Drilling, Inc., under which the State would recover $2 million in economic damages.