A Federal Judge Approved a $4 Billion Settlement

A federal judge on Tuesday approved a $4 billion settlement hammered out between BP and the US government over the 2010 Macondo disaster in the Gulf of Mexico. 

US District Court Judge Sarah Vance issued the ruling after hearing testimony from relatives of those killed in the explosion, several of whom said the settlement was too lenient. 

Vance said the plea deal -- under which the company pleaded guilty to 14 criminal counts -- provides adequate deterrence against the lax safety that BP agrees was the cause of the explosion. 

"The plea agreement holds BP accountable for its crimes," she said. The April 20, 2010 blowout at BP's Macondo well destroyed Transocean's Deepwater Horizon drilling rig, killing 11 workers and setting off the largest marine oil spill in US history. Before BP installed a sealing cap in mid-July 2010, Macondo had released an estimated 4.9 million barrels of oil. 

A BP executive started off Tuesday's hearing by apologizing to relatives of the 11 men killed. 

"BP understands and acknowledges our role in that tragedy, and we apologize," said Luke Keller, a BP America vice president. 

The judge said one reason she approved the settlement was that, if the case instead went to trial, there was a "significant risk" that the government would collect only a small fraction of the $4 billion in fines and penalties that BP has now committed to pay. Vance said she was concerned that the government would likely collect roughly $8 million if the case went to trial. 

Tuesday's hearing came one day before two US government contracts BP has to supply fuel to the military are set to expire. The two contracts are worth nearly $1 billion combined. 

Vance noted that the company's guilty plea put in jeopardy BP's eligibility to secure such government contracts. BP has been on hold until the company can prove to the US that it is a reliable contractor. 

Suspending a company from government contracts after a conviction or guilty plea is a standard action under the US suspension and debarment regulations.