If Thursday headlines declaring a “record” settlement suggest that the Justice Department has brought the hammer down on BP for the Deepwater Horizon calamity, financial markets suggest otherwise.
The oil giant’s stock price climbed to $41.24 per share—growth of about 3.5 percent in one hour, between 8 and 9 in the morning—as news of the deal trickled down to the media. The growth mostly occurred during two seven minute periods at the top of each hour.
By noon EST, around the time of publication, BP shares were trading at $41.15.
The $18.7 billion settlement is still subject to a judge’s approval and a public comment period.
“If approved by the court, this settlement would be the largest settlement with a single entity in American history,” Attorney General Loretta Lynch declared.
The accord would settle claims made by five states that border the Gulf of Mexico, the federal government, and more than 400 local authorities.
It would also see the British firm clear a major hurdle in its bid to put the 2010 disaster behind it. If the stock market is any indication, the deal represents a better ending to the matter for the oil company than investors had anticipated.
Greatly impacting both the fine and BP’s final cost for being responsible for one of the worst environmental disasters in history are estimations over how much crude oil actually poured into the Gulf. A judge in the case ruled earlier this year that 3.19 million barrels gushed into the sea after the offshore rig exploded. A US government task force assembled to calculate the volume of the spill, however, had argued that BP was responsible for contamination equivalent to 4.9 million barrels.
According to Truthout reporter Dahr Jamail, a scientist who was part of the task force said that even the 4.9 million estimate was too low by a factor of three, according to “BP’s own estimate for a freely flowing pipe.”
Jamail reported that a 12.18 million barrel spill would have resulted in more than $52.3 billion fines for Clean Water Act violations alone. According to CBS News, the deal announced Thursday includes “a civil penalty of $5.5 billion under the Clean Water Act.”
