SUPERMAJOR BP has submitted to a US court that a proposed fine of US$13.7 billion relating to the 2010 Macondo oil spill be reduced due to low oil prices.
Reuters reported lawyers for BP argued for a reduction in the potential fine, to be issued under the Clean Water Act.
They argued that the defendant named in the case, BP’s exploration and production unit BPXP, could not afford a big penalty, and that it should not be tied to the balance sheet of its parent company.
BP lawyers added that low oil prices should be considered, with a 60 per cent drop in oil prices since June 2014 lowing BPXP’s value to about US$5.1 billion, down from US$16 billion just months ago.
“BPXP cannot afford a penalty in the range that they are asking for, and so that’s why they [the government] are saying to look to the parent,” he said.
The government’s lawyer, Steve O’Rourke proposed a fine of between US$11.7 billion and US$13.7 billion, arguing BPXP and BP were effectively the same company.
Courts typically consider eight statutory factors when deciding on a penalty amount:
They include the seriousness of the violations, any efforts to minimise or mitigate the effects of the spill, the economic impact of a penalty on the violator and the degree of culpability involved.
BP said the equal consideration of these factors “weighs in favour of a penalty at the lower end of the statutory range.”
Under phase two of the MDL 2179 civil trial the court ruled 3.19 million barrels of oil was discharged into the Gulf of Mexico during the Macondo deep water well incident, for which BP had previously been found negligent.
The Macondo oil spill was the result of a blowout on the Macondo prospect, in the Gulf of Mexico, on 20 April 2010 which killed 11 men who were working on the drilling rig.