BP is likely to agree to pay the U.S. Department of Justice $20-$25 billion to settle all charges around the Gulf of Mexico oil spill, according to a leading analyst, a prediction that is at least twice what the company has set aside.
Martijn Rats, head of European oil research at Morgan Stanley, said he saw a 70-80 percent chance that the two sides would agree a deal on civil and criminal charges surrounding the 2010 disaster sometime between BP's full year results on February 7, and the scheduled start of legal hearings in New Orleans on February 27.
BP sources said that talks are ongoing with the Department of Justice about a possible settlement and that the London-based company's board has shifted to weekly meetings to discuss progress. Senior company sources said last year that the company was prepared for a massive payout. One source predicted BP would offer "the mother of all settlements".
Another said the settlement would likely be the second-largest in U.S. legal history, putting it between the $206 billion the tobacco industry agreed to pay U.S. states for treating smoking-related illnesses and the $7.2 billion banks agreed to pay to settle litigation related to Enron's collapse, Reuters reported.
