British oil giant BP is nursing another large hole in its bank account. Yesterday the company agreed to pay the U.S. authorities $4.5 billion to settle criminal charges over the Gulf of Mexico oil spill and there are more big penalties in the pipeline.
BP still faces a civil trial over the disaster which could be very costly. If the U.S. government can prove gross negligence, the company could face a further fine of up to $21 billion under the Clean Water Act.
BP is hoping to reach a settlement before the trial begins in New Orleans next February. Some analysts say U.S. authorities may be prepared to make a deal.
Jason Kenney of the Santander bank argues that it is not in the interest of the U.S. government to drive the company into bankruptcy: “BP — in the energy space in the U.S. — is the largest employer. It’s the largest taxpayer from an oil and gas perspective. It’s bigger than Exxon and Chevron. You don’t want to be getting rid of BP too quickly.”
Kenney also points out that the BP is investing heavily in the Gulf of Mexico.
“Punish the company,” he says, “but don’t kill it.”