The rumor mill is a-churnin’, and the story it has spun for us today is that BP will likely agree to a $20 billion to $25 billion settlement with the Department of Justice (DOJ) over civil and criminal charges that resulted from the Deepwater Horizon oil spill in the Gulf of Mexico in April 2010.
Martijn Rats, the head of European oil research at Morgan Stanley, told Thomson Reuters that there is a 70 percent to 80 percent chance that the company will settle with the DOJ at some point after BP’s full year results on Feb. 7 and before legal hearings are scheduled to begin on Feb. 27. Thomson Reuters also reports that BP sources claim the company’s board has weekly meetings to discuss ongoing talks with the DOJ about a possible settlement.
The estimated $20 billion to $25 billion settlement is about twice what the company has supposedly set aside to resolve the charges related to the oil spill. If BP were to pay that much, the Deepwater Horizon settlement would be the second-largest in U.S. history, after the $206 billion the tobacco industry paid to U.S. states for the treatment of smoking-related illnesses.