BP to Pay $7.8 Billion in Gulf Oil Spill Settlement

BY Mike Fritz  March 3, 2012 at 10:03 AM EDT

BP says it has reached a $7.8 billion settlement with lawyers representing thousands of plaintiffs who were affected by the worst offshore oil spill in U.S. history.

The announcement came late Friday as a much anticipated trial in a New Orleans federal court was set to begin next week. That trial has now been postponed indefinitely while BP, TransOcean and other companies involved continue settlement talks.

The settlement stems from a blowout at BP’s Macondo well on April 20, 2010, which sunk the oil rig Deepwater Horizon – killing 11 workers on board and pouring millions of barrels of oil into the Gulf of Mexico.

BP says it will use money remaining from a $20 billion trust fund that the company had set up during the spill in hopes of resolving claims without extensive litigation. The company also announced a separate compensation fund overseen by Kenneth Feinberg will be shut down.

Even with Friday’s settlement – which must be approved by a district judge in New Orleans – legal troubles remain for the London-based oil company, as it continues to face civil charges from Gulf Coast state governments like Louisiana and Alabama.

And the U.S. Justice Department, who is weighing criminal charges against BP, said in a statement that “The United States will continue to work closely with all five Gulf states to ensure that any resolution of the federal law enforcement and damage claims, including natural resources damages, arising out of this unprecedented environmental disaster is just, fair and restores the Gulf for the benefit of the people of the Gulf states.”

Yet BP’s chief executive Bob Dudley said in a statement that, “The proposed settlement represents significant progress toward resolving issues from the Deepwater Horizon accident and contributing further to economic and environmental restoration efforts along the Gulf Coast.”

The NewsHour’s Ray Suarez spoke with Dudley in a wide-ranging interview during the height of the environmental crisis in July of 2010 from the company’s U.S. headquarters in Houston:

Click here for more NewsHour coverage of the BP oil spill