Advertiser Disclosure

BP Agrees to Pay $4.5 Billion in Criminal Fines, Faces Criminal Charges

Nearly three years after British Petroleum’s Deepwater Horizon oil rig exploded, killing 11 workers and releasing millions of gallons of crude oil into the Gulf of Mexico, BP agreed to pay $4.5 billion in criminal fines and face 14 counts of criminal acts.

The British energy company, the second-largest oil and gas producer in the United States, will plead guilty to charges related to felony manslaughter and lying to Congress following the tragedy, according to the U.S. Department of Justice.

The settlement, which must be approved by a federal judge, includes:

  • $350 million to be paid to the National Academy of Sciences
  • Nearly $2.4 billion to the National Fish and Wildlife Foundation
  • $500 million to the Securities and Exchange Commission (SEC).

BP was accused by the SEC of misleading investors by underestimating the amount of crude gushing from the ruptured well. It was estimated 172 million gallons of crude spilled 50 miles off the Louisiana coast, harming marshes and beaches, killing wildlif,e and closing commercial fishing in many areas. The well was finally capped on July 15, 2010, after 85 days.

U.S. Attorney General Eric Holder said in a news conference in New Orleans, Louisiana, that the $4.5 billion penalty is the largest criminal resolution in American history. BP will pay the fine over five years.

How Disaster Affected BP

In the wake of the 2010 oil spill, BP reported a loss before interest and taxes of $3.7 billion, nearly one-sixth of its 2009 profit of $26.4 billion.

According to FactSet, BP’s net loss reached $2.4 billion, including $17.7 billion spent attempting to clean up the spill. The company has also paid approximately $15 billion so far into a $20 billion trust fund to be used to pay claims and settlements.

BP’s current stock price hovers around $40 a share, one-third lower than its $60-a-share price before the spill. That equates to a market value loss of about $60 billion.

In the most recent quarter, BP reported sales of $93 billion and a profit of $5.5 billion.

Criminal Inquires Will Continue

Holder said criminal inquiries into the disaster are ongoing and include an effort to recoup civil fines under the Clean Water Act and other federal laws. BP faces the possibility of paying more money to businesses impacted by the spill, such as fishermen, many of whom lost their livelihood.

The company also faces fines through the Natural Resources Damage Assessment, with the possibility of payouts to states affected by the tragedy. Combined, those can total more than $40 billion, Holder said. A trial to assess fault in the case is scheduled for February in New Orleans.

Also possible: a proposed $7.8 billion settlement between BP and more than 100,000 businesses and individual who claim they were harmed by the spill. Claims continue to be filed by property owners, shrimpers, commercial fishermen, environmental groups, restaurants and hotels who experienced financial loss.

Future Claims for BP

Future fines and claims from property owners may impact the financial performance of BP, the country’s second largest oil and gas employer with a workforce of about 23,000. BP stated it supports nearly a quarter of a million American jobs and has invested more than $52 billion in the United States over the past five years.

BP Chairman Carl-Henric Svanberg said company’s agreement to criminal charges and fines is in the best interest of the company and its shareholders.

According to Svanberg, “It removes two significant legal risks and allows us to vigorously defend the company against the remaining civil claims.”

Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].


2 Minute Read

Table of Contents
    Add a header to begin generating the table of contents

    Home > Blog > BP Agrees to Pay $4.5 Billion in Criminal Fines, Faces Criminal Charges


    1. Jervis, R. (2012, November 16). The amount in fines was the largest-ever criminal resolution in U.S. history, Attorney General Eric Holder said. USA Today. Retrieved from
    2. (2012, November 15). BP Announces Resolution of All Criminal and Securities Claims by U.S. Government Against Company Relating to Deepwater Horizon Accident. Retrieved from
    3. WIKI Analysis. Retrieved November 16, 2012 from
    4. Kunzelman, M. (2012, November 15). BP to pay $4.5 billion in oil spill settlement. Retrieved from