BP to pay over $20 bn over Deepwater Horizon oil spill

BP Plc's settlement with the US government and five Gulf states in the Deepwater Horizon oil spill increased to $20.8 billion in the latest tally of costs from the US Department of Justice.

The settlement, the largest in the department's history ends the government's civil claims under the Clean Water Act and Oil Pollution Act, as also economic damage claims from regional authorities, according to a US justice department statement.

The pact is designed ''to not only compensate for the damages and provide for a way forward for the health and safety of the Gulf, but let other companies know they are going to be responsible for the harm that occurs should accidents like this happen in the future,'' US attorney general Loretta Lynch told reporters at a briefing in Washington.

The $18.7 billion in total settlement costs announced in July did not include reimbursements, interest payments and committed expenditures for early restoration of damages to natural resources.

The London-based company had made a provision of $53.7 billion to pay for the 2010 disaster in which an explosion on the Deepwater Horizon drilling rig in the Gulf of Mexico led to the largest offshore oil spill in US history.

 ''Once approved by the court, this agreement will launch one of the largest environmental restoration efforts the world has ever seen,'' Lynch said at a news conference. ''BP is receiving the punishment it deserves, while also providing critical compensation for the injuries it caused to the environment and the economy of the gulf region. The steep penalty should inspire BP and its peers to take every measure necessary to ensure that nothing like this can ever happen again.''

In 2013, the UK oil giant pleaded guilty to criminal misconduct before and after the disaster and was sentenced to pay an additional $4 billion in criminal fines and restitution, including $2.4 billion for natural resources restoration, according to the justice department.

The civil settlement will be open for public comment for 60 days before it goes to a federal judge for final approval.

UK oil giant BP has agreed to a record $18.7 billion settlement to cover all federal, state and local claims arising from the 2010 Gulf of Mexico oil spill. The deal comes as the largest environmental settlement - and the largest civil settlement with any single entity - in the nation's history, officials said. (See: BP agrees to record $18.7 billion settlement over Gulf of Mexico oil spill).