Nearly two years after an offshore explosion leaked almost 5 billion barrels of oil into the Gulf of Mexico, British Petroleum (BP) has reached a $7.8 billion settlement with businesses and individuals who sued over the spill.
The settlement includes hundreds of thousands of plaintiffs whose livelihoods suffered in the wake of the disaster. It will be broken down into two categories of claims: economic and medical. Economic claims include fishermen, hoteliers and others who lost business due to the spill; medical claims will provide financial compensation and ongoing medical consultation to those with spill-related health issues.
BP settled three days before the case’s scheduled court date. Although a trial could have potentially brought a larger financial award, plaintiffs may have been wary of a protracted legal battle, such as the 20-year courtroom drama after the 1989 Exxon Valdez oil spill.
The settlement was much lower than the $14 billion some analysts had predicted, according to Bloomberg. After news of the deal, the company’s shares jumped as much as 3.1 percent.
BP still faces claims from the U.S. government, Gulf states and drilling partners, which could total billions of dollars, according to Thomson Reuters. The petroleum giant has filed its own suits against Transocean Ltd., which owned the exploded Deepwater Horizon oil rig, and Halliburton Co., which cemented the Macondo well.