BP PLC (BP), the British energy major, was held accountable for “gross negligence” in a U.S. federal court ruling over the oil spill incident that took place in April 2010. The accident, infamously known as the “Deepwater Horizon” or “Macondo” accident, involved millions of gallons of crude oil spilling into the Gulf of Mexico for over three months. Eleven people died.
The case also involved Transocean Ltd. (RIG) and Halliburton Co. (HAL). These two companies were also found “negligent.” RIG and HAL are components of the Energy Sector Select SPDR ETF (XLE) and the VanEck Vectors Oil Services ETF (OIH).
According to the judge’s determination, BP was held responsible for 67% of the disaster, followed by RIG and HAL. According to the estimates, the total fine could reach as high as $18.5 billion if the ruling is sustained and implemented.
Stock reflects optimism even after the ruling
Following the ruling, BP’s share price plunged ~7% to $44.89 on September 4. However, it recouped some of the losses after BP’s decision to appeal.
BP to continue its legal battle
The court’s ruling is not yet the final verdict on the matter. BP has decided to move to the Court of Appeals against the ruling.
BP strongly disagreed with the United States District Court for the Eastern District of Louisiana and disclosed that it would proceed to the United States Court of Appeals. The company declared that the court’s finding “is not supported by the evidence at trial.” It also declared that “BP will seek to show that its conduct merits a penalty that is less than the applicable maximum after application of the statutory factors.”
Read the following parts of this series to learn more about BP and how the Macondo incident has affected and will affect shareholders.