BP share price down, can’t seek review of huge compensation bill

BP, one of the six “oil majors”, was denied the option to pursue redress over “excessive compensation” the company paid to settle claims over the Deepwater Horizon disaster, limiting what the company could salvage from the legal debacle.

As reported by the New York Times, the judge said that the earlier claims “were paid under the settlement’s terms as it was interpreted by the claims administrator and the court at that time”. He also added: “The fact that the decision and the interpretation were later reversed does not equate to fraud or anything close to it by these claimants.”

The ruling comes after BP was found “grossly negligent” by the US court over its role in the Deepwater Horizon oil spill, the worst offshore oil disaster in US history. The judge will announce the exact figure of BPs penalties, and it could be in excess of $20bn, which would take the total cost of the incident to over $40bn.

The latest ruling dampens hopes of limiting the costs and was immediately noted for appeal by the company.

“BP disagrees with todays decision and will appeal it,” company spokesman Geoff Morrell said in a statement. “We asked the court, as a matter of equity and fairness, to order the return of excessive payments. It was an attempt to reach the only fair outcome.”

The court had earlier ordered for a change in the compensation calculations in BPs favor, though it only covered future litigation. The current ruling was on BP addressing artificially increased claims ahead of the formula change.

BP had earlier in September moved to have the claims administrator removed, as it deemed him “biased and incompetent”, in a move related to the current ruling. A decision is yet to come.

BP Plc lost 1.55% to trade at GBX457.75 per share by 13:24 GMT, marking a one year change of +3.68%. The company is valued at £85.21 billion.