BP Fined a Record $20.8 Billion for Oil Spill Disaster

BP PLC — the company responsible for the 2010 Deepwater Horizon oil spill — will pay a record $20.8 billion to the US government to cover damages caused by the disaster

The deal finalizes an agreement between BP and the federal government that was first announced in July, in which BP said it would pay $18.7 billion. This final settlement updates that number and resolves all civil claims against BP set forth by the Department of Justice and five Gulf states. It is considered "the largest settlement with a single entity in American history," according to US Attorney General Loretta Lynch.

Out of the money owed, BP will pay $5.5 billion to cover penalties incurred under the Clean Water Act, the US law that regulates water pollution. The five states affected by the spill — Alabama, Florida, Louisiana, Mississippi, and Texas — will also receive large sums to cover damages, as will 400 local government entities. Apart from this settlement, BP has spent a reported $28 billion on cleanup and compensation.

The Deepwater Horizon disaster is considered by many to be the worst oil spill in US history. The spill occurred when an offshore oil rig exploded in the Gulf of Mexico, dumping 4.9 million barrels of oil into the surrounding waters. The explosion killed 11 people and devastated marine wildlife in the area. A portion of the BP settlement will go toward revitalizing these damaged habitats. "Once approved by the court, this agreement will launch one of the largest environmental restoration efforts the world has ever seen," Lynch said.

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