Counting the Costs: BP Gulf of Mexico Oil Spill

BP Plc shares are one of the top performers on the FTSE 100 Monday after reports at the weekend revealed that the UK oil giant is set to seal a deal with US authorities soon and pay less than $15bn in criminal and civil penalties following the 2010 Deepwater Horizon oil spill in the Gulf of Mexico.

According to an unnamed source cited in the Financial Times, the Department of Justice (DoJ) is seeking $25bn from BP but accelerated talks could lead to a substantially lower settlement cost, ahead of the Democratic party's convention in September.

BP's shares are currently trading at a one-month high at 2.20 percent to the upside, standing at 418.00p as of 1020 GMT.

A BP representative was not immediately available to comment when contacted by the IBTimes UK.

Critical Estimates On Oil Spill Fallout

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On 20 April 2010, an explosion on BP's Deepwater Horizon rig killed 11 workers and resulted in the largest oil spills and environmental disasters in history.

While, oil immediately spewed out into the Gulf of Mexico, the estimates of how much and at what rate this was occurring was being constantly revised by BP and the US government. In January 2011, the Presidential Commission filed its final report on the BP Deepwater Horizon Oil Spill and Offshore Drilling incident.

In the final report, the National Commission found that the spill could have been prevented if operator BP, rig owner Transocean and contractor Halliburton had not made a number of mistakes in the Macondo well blowout.

According to estimates, at the time, 4 million barrels of oil was leaked into the US Gulf of Mexico and independent groups had constantly revised forecasts.

Under The US Clean Water Act, BP still faces a civil fine over the accident.

The estimates are critical because the total amount of oil that was spilled into the ocean is vital for the verdict and will determine the final penalty.

The US government's final total estimate is 4.9 million barrels, which equates to a rate of 53,000 and 62,000 barrels of oil per day.

BP Blighted By Lawsuits, Fines and Settlements

In 2010, BP set aside $37.2bn for what it estimates will be its maximum spill-related costs. In March, it reached an agreement to pay around $7.8bn to satisfy most claims from private plantiffs related to economic damage, clean-up costs and property damage.

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