BP slides after US justice department's criticism

THE US department of justice has launched a withering attack on BP, underlining the US government’s determination to prove the British oil group responsible for gross negligence and “corporate recklessness” over the Deepwater Horizon disaster of 2010.

Shares in BP plunged 3 per cent to 423.25p in early trading. There was renewed calls by financial analysts for the business to be broken up into smaller parts in a bid to extract more value from it.

Legal specialists have indicated that a successful gross negligence charge would leave BP facing penalties under the local Clean Water Act of more than $20 billion, on top of a $7.8 billion proposed settlement with fishermen and others.

The departmental remarks, contained in a New Orleans federal court filing made last Friday but which have only just come to light, took investors aback because they indicate the department is determined to pin the harshest charges on the energy group.

The government lawyers also condemned some arguments made by BP earlier in the case as “plainly misleading” in a departmental filing made in reaction to a tentative deal between the company and various private plaintiffs.

“The behaviour . . . of these BP executives would not be tolerated in a middling-size company manufacturing dry goods for sale in a suburban mall. Yet they were condoned in a corporation engaged in an activity [deep-water drilling] that no less a witness than Tony Hayward [former BP chief executive] himself described as comparable to exploring outer space,” the department said.

The latest department filing suggests no deal is likely before new court proceedings start early next year. BP publicly shrugged off the latest setback, arguing that the government’s claims “simply illustrate that disputes about the underlying facts remain. BP believes it was not grossly negligent and looks forward to presenting evidence . . . at trial in January.”

Privately, the company is believed to be shaken by some of the aggressive language used by the department. In the past, City of London analysts have suggested that BP can only raise the value of its sagging share price by being broken up into two companies, only one of which might face legal claims. – (Guardian service)