BP warned investors last month that the price tag will be “significantly higher” than it initially estimated for its multibillion-dollar settlement with businesses and residents who were damaged by the 2010 oil spill in the Gulf of Mexico. The London-based oil giant claimed last year that it would spend roughly $7.8 billion to resolve tens of thousands of claims covered by the settlement agreement. But in a regulatory filing last month, BP PLC said businesses’ claims have been paid at much higher average amounts than it had anticipated.
The company claims it can’t reliably estimate how much it will pay for unresolved business claims following the ruling referred to above by Judge Carl Barbier, who is supervising the uncapped settlement that BP agreed to. It should be noted that BP had revised its estimate for the total cost of the settlement before Judge Barbier’s ruling, saying earlier this year that it expected to pay $8.5 billion instead of the $7.8 billion it estimated when it first agreed to the settlement.
In BP’s regulatory filing, the company said it has been analyzing the processing of recent claims to determine if they can be used to predict future claims, but concluded it can’t. Excluding business claims that Juneau hasn’t received or processed yet, the company now estimates it will pay $7.7 billion to resolve the rest of the claims covered by the settlement. Business economic loss claims not yet received or processed are not reflected in BP’s current estimate. The average payments per claim determined so far are higher than BP says it anticipated.
Source: Montgomery Advertiser
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