$20b Penalty for BP

$20b Penalty for BP$20b Penalty for BP

In the largest environmental settlement in US history, oil and gas firm BP will pay over $20 billion to the American government as damages over the 2010 oil spill in the Gulf of Mexico.

A US judge approved the settlement deal, resolving years of litigation over the worst offshore spill in the nation's history, AP reported.

The settlement, first announced in July, includes $5.5 billion in civil Clean Water Act penalties and billions more to cover environmental damage and other claims by five Gulf of Mexico states and local governments.

The money is to be paid out over roughly 16 years.

BP has estimated its costs related to the spill, including its initial cleanup work and the various settlements and criminal and civil penalties, will exceed $53 billion.

The US Justice Department has estimated that the settlement will cost the oil giant as much as $20.8 billion, the largest environmental settlement in US history as well as the largest-ever civil settlement with a single entity.

US District Judge Carl Barbier, who approved the settlement, had set the stage with an earlier ruling that BP had been "grossly negligent" in the offshore rig explosion that killed 11 workers and caused a 134-million-gallon spill.

US Attorney General Loretta Lynch praised the settlement.

"Today's action holds BP accountable with the largest environmental penalty of all time while launching one of the most extensive environmental restoration efforts ever undertaken," Lynch said in a statement.