US judge cuts BP’s fine

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London/San Francisco - A US judge ruled on Tuesday that BP Plc recovered 810,000 barrels of oil from its 2010 spill site and that this amount should be excluded from certain penalties it may face, cutting its maximum fine by as much as $3.5 billion.

Just days before he presides over a spill-related civil trial due to start on February 25 in New Orleans, US District Judge Carl Barbier deemed those barrels as 'collected' during the spill.

BP had sought this reduction in the penalty-relevant total more than a month ago.

“The 'Collected Oil' flowed from the subsurface reservoir, through the well, through the blow-out preventer, and never came into contact with any ambient sea water, and was not released to the environment in any way,” the ruling said.

Earlier, the British oil company said the US Department of Justice backed its assertion that the oil recovered directly from the leaking Macondo well should not count when it comes to fines that could be levied under the US Clean Water Act.

“Under the Clean Water Act, civil penalties are assessed only on oil that has actually entered the environment and potentially caused harm,” BP said in a statement on Tuesday.

BP also repeated that the total 4.9 million spilt barrels estimate made by the US government in its claim against BP, including barrels recovered, was too high by 20 percent.

The maximum fine payable under the act is $4,300 per barrel, so a calculation based on 4.9 million barrels spilt would have forced BP to pay as much as $21 billion under the Clean Water Act, on top of any other fines and penalties, if BP was found guilty of “gross negligence.”

Without the gross negligence finding, the fine could be up to $1,100 per barrel - or $5.4 billion - so that potential fine was cut by nearly $900 million with the ruling on Tuesday.

Separately, Barbier signed on Tuesday a $1 billion civil settlement between the US government and Transocean related to the spill, which had been struck last month.

Transocean's Deepwater Horizon rig was destroyed in the blowout.

The overall civil case under Barbier is In re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, No. 10-md-02179, in the US District Court, Eastern District of Louisiana. - Reuters


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