British oil giant BP (LON:BP.) is facing one of the most defining weeks in its 114-year history as several legal disputes over the 2010 Gulf of Mexico spill come to a head.
Monday July 8 is the date of a court hearing in BP’s challenge against overblown and fabricated claims.
The oil major wrote to Carl Barbier, the judge in charge of the case in New Orleans, putting forward the case for “unethical and potentially criminal behaviour” on the part of individuals working on behalf of the claims administrator Patrick Juneau.
The compensation payouts under the settlement for victims of the rig disaster that led to the largest oil spill in US history will hit BP’s earnings before the end of the year unless it is successful in its appeal.
Juneau reported yesterday he had processed about a quarter of the 194,800 claims received and made compensation offers worth around US$3.86bn. BP had initially expected the settlement to cost it US$7.86mln.
The company has so far been paying damages to victims from a US$20bn trust fund set up in 2010. However, with US$18.3bn already shelled out by the end of March, future compensation will be charged to BP’s earnings.
Reports suggest BP could run out of compensation cash by September at the current burn rate.
Friday July 12 meanwhile is the deadline for submission by the plaintiffs and defendants for the first phase of the negligence litigation over the accident that killed 11 oil rig workers.
Barbier once again has the honour of deciding whether BP or its contractors Transocean and Halliburton acted with wilful or wanton misconduct or reckless indifference.
A ruling against BP could subject it to billions more in damages.