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Penalties total $54 billion

BP to pay $20 billion in fines for Gulf of Mexico spill

Deepwater HorizonBP will pay fines totalling $20 billion (£13.2bn) to settle most of the claims resulting form the Gulf of Mexico oil spill five years ago,

It brings the final cost of the disaster to $54bn, including clean up costs.

BP’s shares rose nearly 3% on Wall Street as investors welcomed the cap on liabilities.

It had previously been agreed that the fines will be paid to the federal government, five Gulf Coast states and hundreds of local authorities over 18 years.

Attorney General Loretta Lynch said: “This agreement will launch one of the largest environmental restoration efforts the world has ever seen.”

The blow-out on the Deepwater Horizon rig on 20 April 2010  left 11 oil workers dead and the spill damaged 1,300 miles of coastline after three million barrels of crude poured into the sea over three months.

BP has been forced to sell assets to pay its costs and by shrinking in size it has become vulnerable to acquisition.

Its smaller size among the bigger oil majors has made it vulnerable to potential takeovers, analysts have said.

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