In a twist of fate,
British energy giant BP plc
) received adverse ruling from New Orleans District Judge Carl
Barbier over settlement payments relating to the 2010 Deepwater
Horizon oil spill.
Per the court verdict, the British energy giant has to adhere to
the earlier interpretation of the settlement over the spill which
tentatively suggests higher payouts for damages. BP - earlier
dissatisfied with court-appointed settlement administrator
Patrick Juneau - appealed for a revision to the 5th U.S. Circuit
Court of Appeals. The company's plea cited concerns that Juneau
is compensating even those companies unaffected by the disaster.
The 5th U.S. Circuit Court of Appeals ordered Barbier in December
to review Juneau's methodology.
As a reminder, on Apr 20, 2010, offshore driller
) ultra-deepwater Horizon drilling platform, contracted to BP,
sank following an explosion while operating in the U.S. GoM off
the coast of Louisiana. The incident killed 11 workers and spewed
more than 200 million gallons of crude in what was touted as the
country's worst oil spill ever. Subsequently, a moratorium was
imposed on offshore drilling at water depths of more than 500
feet in the region, which was lifted on Oct 12, 2010.
The breach of Clean Water Act along with other laws led the U.S.
government to take legal action against the main defendants in
the trial - BP, Transocean and
). Several other companies are also involved in the trial.
However, BP already raised its estimate for settlement payments
to $9.2 billion in October, from the earlier apprehension of $7.8
billion. Showing strong investor confidence in the festive
season, the company's stock surged consecutively for six trading
days and hit a new 52-week high of $48.07 on Dec 26, 2013.
London, England-based BP plc is one of the world's largest energy
companies, providing its customers with fuel for transportation,
energy for heat and light, retail services and petrochemical
products. It operates in three segments: Exploration and
Production, Refining and Marketing, and Other Businesses and
Even though the company remained active in strategic development
during the third quarter, it expects flattish production in the
upcoming quarter due to planned major turnaround activity and
repairs in the high-margin North Sea, planned maintenance in
Alaska as well as the continued impact of divestment. For the
next quarter, the company expects refining margins to remain
under significant pressure due to high gasoline stocks and new
competitor capacity addition as well as lower seasonal demand.
BP carries a Zacks Rank #3 (Hold). Better-ranked stocks in the
oil and gas sector include
Harvest Natural Resources Inc.
) which holds a Zacks Rank #1 (Strong Buy).
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