The Court Supervised Settlement Program (CSSP) established as part of the Deepwater Horizon (DWH) class action settlement is winding down. BP now expects to take a post-tax non-operating charge of around $1.7 billion in its fourth quarter 2017 results for the remaining Business Economic Loss (BEL) and other claims associated with the CSSP. The cash impact is expected to be spread over a multi-year period.
The charge results primarily from significantly higher claims determinations issued by the CSSP in the fourth quarter and the continuing effect of the Fifth Circuit’s adverse May 2017 ruling on the matching of revenues with expenses when evaluating BEL claims.
Brian Gilvary, BP’s Chief Financial Officer, said, “With the claims facility’s work very nearly done, we now have better visibility into the remaining liability. The charge we are taking as a result is fully manageable within our existing financial framework, especially now that we have the company back into balance at $50 per barrel.”
Cash payments related to DWH in 2018 are now anticipated to be around $3 billion, as compared to the company’s third-quarter estimate of just over $2 billion.
BP will continue to vigorously appeal determinations of claims that it believes are non-compensable under the Plaintiffs’ Steering Committee settlement agreement.
On April 20, 2010, an explosion on the Deepwater Horizon Macondo oil well drilling platform tragically killed 11 workers, and started the largest marine oil spill in U.S. history, releasing millions of barrels of oil into the Gulf of Mexico.