BP PLC said it had reached a $7.8 billion deal to settle thousands of claims from fishermen and others affected by the Gulf of Mexico oil spill, ahead of a blockbuster U.S. trial.
The settlement, announced Friday, does not affect what is anticipated to be tens of billions of dollars in fines and claims from the U.S. government and the coastal states and local governments impacted by the spill.
Nor does it resolve suits filed by shareholders or those seeking compensation because of a drilling moratorium imposed in the wake of the worst environmental disaster in US history.
But it does resolve a big piece of a very complicated legal battle.
"The proposed settlement represents significant progress toward resolving issues from the Deepwater Horizon accident and contributing further to economic and environmental restoration efforts along the Gulf Coast," Bob Dudley, BP's chief executive officer, said in a statement.
The last-minute deal means the highly anticipated trial will be delayed once again after a week-long postponement was ordered last Sunday in order to allow the settlement talks to continue.
Judge Carl Barbier issued an order late Friday adjourning the case indefinitely "because such a settlement would likely result in a realignment of the parties in this litigation... and in order to allow the parties to reassess their respective positions."
The case will likely still go to court even if a deal is reached with the federal government.
That's because the British energy giant is hoping to shift some of the cost to its subcontractors, a complex legal question that will likely end up taking years and multiple appeals to resolve.
Barbier -- an expert in maritime law charged with consolidating hundreds of spill-related lawsuits into the single case -- has left the door open to some shared liability in key pre-trial rulings.
Several government probes have already castigated BP, rig operator Transocean and Halliburton -- which was responsible for the well's faulty cement job -- for cutting corners and missing crucial warning signs.
The April 20, 2010, explosion on the BP-leased Deepwater Horizon drilling rig killed 11 workers, and in following days blackened beaches in five US. states and devastated the Gulf Coast's tourism and fishing industries.
It took 87 days to cap BP's runaway well 5,000 feet below the surface which spewed some 4.9 million barrels (206 million gallons) of oil into the Gulf of Mexico.
Barbier is tasked with determining whether the deadly mistakes constitute gross negligence, how much of the blame rests with each party and whether punitive damages should be imposed.
Just one set of federal fines could reach $18 billion if gross negligence is found.
BP is also on the hook for all economic damages caused by the spill, including the cost of environmental rehabilitation, and could also be hit with costly criminal charges and punitive damages ranging from one to five times the cost of economic damages.
"There's only one path for BP to take: Blame it on as many other people as possible and make sure it's not cast as gross negligence," Blaine LeCesne, a law professor at Loyola University in New Orleans who has been following the case closely, said in a recent interview.
"That way they may be able to limit their cost to $30 billion or $40 billion as opposed to $100 billion."
BP said the $7.8 billion settlement -- which must still be approved by Barbier -- will be paid from a $20 billion trust fund it set up in response to the spill and is "not expected to result in any increase in the $37.2 billion charge" recorded in 2010.
It warned Friday that it is "not possible at this time" to determine whether the funds remaining in the trust will be sufficient to satisfy all claims.
BP has paid $6.1 billion to over 220,000 claimants who chose to settle with a special fund set up to provide emergency payments and a faster route to reimbursement.
The massive cleanup and containment effort cost BP $13.6 billion, and it has pledged $1 billion towards economic rehabilitation.
BP has been able to recover more than $5 billion from its well partners and subcontractors.
The proposed settlement is subject to reaching definitive agreements within 45 days.
Copyright Agence France-Presse, 2012