Following the June 8th midnight deadline to file claims involving British Petroleum’s (BP) Deepwater Horizon oil spill in the Gulf of Mexico, 10 claims centers operating through the country will be closing on Friday, June 19th. The offices opened shortly after the 2012 settlement was announced, and have remained open past the claims deadline in order to field questions from claimants who took losses due to the disaster. Claims Administrator, Patrick Juneau, said the remaining centers located in Alabama, Louisiana, Mississippi, and Florida will close and “are now putting our resources into the review of claims.” The oil spill occurred when the ship, Deepwater Horizon, sank on April 22nd off the coast of Louisiana, pouring oil into the Gulf for 87 day and spilling an estimated 3.19 million barrels of oil and claiming the lives of 11 crew-members.
Vetting of the claims will likely take a considerable amount of time and effort. On May 6th, U.S. District Judge Carl Barbier gave Juneau subpoena power in order to pursue investigations and to “maintain the integrity” of the settlement process. BP’s lawyers have unsuccessfully challenged the settlement in the court system almost immediately after the agreement was reached, citing widespread fraud in the claims process. BP has already paid out over $5.3 billion to 66,000 claimants but by mid-April, the number of claimants skyrocketed to over 320,000. The final number of claims is likely significantly higher than that, however, given the massive rush to make last week’s deadline. According to the company’s first-quarter financial statement, BP now estimates the total settlement cost to be roughly $10.3 billion. Terms of the 2012 settlement do not include a cap. In addition to the final settlement figure, BP could be fined as much as $13.7 billion for the environmental damage caused by the spill.
Despite the carnage left in the wake of the Deepwater disaster, things are slowly getting back to normal in the Gulf region. This includes the petroleum industry, as the Bureau of Safety and Environmental enforcement issued its first drilling permit in April. The company that received the first permit, LLOG Exploration, a private Louisiana firm, has begun the process of drilling the vast oil-rich 5,490-acres of the Macando reservoir, the area in which the BP spill occurred. Although most of the area will be available for exploration, BP retains possession of the 270-acre perimeter where the Deepwater actually sank and the well that was being extracted was closed. In addition to preserving the area given the sensitivity of the issue and loss of life, BP retains the territory in case modifications need to be made to the well or if additional investigations take place. Some fear a repeat of the 2010 spill, and LLOG’s own analysis estimates a spill would take 109 days to contain and result in nearly 2 million barrels of oil to leak into the Gulf. At the same time, many academics and professionals site LLOG’s experience, having drilled over 50 wells in the region since 2002, including 8 in the Macando area.
Houston Chronicle – Collin Eaton
Splash 24/7 – Donal Scully
The Times-Picayune/Nola.com – Jennifer Larino