BP Agrees to Pay $1 Billion for Oil Spill Restoration

BP Plc (BP) agreed to pay $1 billion to restore areas damaged by its oil spill, which spewed 4.9 million barrels of crude into the Gulf of Mexico for three months last year.

The U.S. Justice Department, which helped negotiate the deal, called it a “first step toward fulfilling BP’s obligation” to repair damage to natural resources. The money will be used to replenish beaches, barrier islands and damaged wetlands and for efforts to conserve ocean habitats, the department said in a statement.

“We believe the early restoration projects to be funded through this agreement represent the best way forward in restoring the Gulf,” Lamar McKay, president of BP America Inc., said in a statement

The agreement doesn’t affect BP’s potential liability from the spill, the Justice Department said. The U.S. has said it will seek from the companies involved as much as $4,300 in civil penalties for each barrel spilled, in the case of negligence or willful misconduct.

The London-based oil company told a federal court in New Orleans the fine may be based instead on the number of days the well gushed. The Clean Water Act provides a fine of $32,500 for each day of a spill, a difference that would amount to billions of dollars for the company.

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Justice Department officials also are considering whether to charge BP managers with manslaughter, according to people familiar with the matter who spoke last month on condition of anonymity because they weren’t authorized to discuss the case publicly. Authorities are investigating whether BP managers who worked both on the rig and onshore should be charged in connection with the workers’ deaths, the people said.

Distribution of the resource restoration money will be overseen by trustees from Alabama, Florida, Louisiana, Mississippi, Texas, the Interior Department and the National Oceanic and Atmospheric Administration, according to the statement. The group will begin working after a public comment period.

“This is a good step to address the damage caused by the BP oil spill and to begin restoration,” Senator Jay Rockefeller, a West Virginia Democrat and chairman of the Senate Commerce Committee, said in a statement.

The agreement will “jump-start restoration projects that will bring Gulf Coast marshes, wetlands and wildlife habitat back to health,” Interior Secretary Ken Salazar said in a statement.

The $1 billion comes from a $20 billion fund BP set up to pay for restoration and to compensate spill victims. The Gulf Coast Claims Facility, which is run by Washington attorney Kenneth Feinberg and draws from the account, has paid more than $3.9 billion to individuals and businesses hurt by the spill.