Back to top

Analyst Blog

British energy giant BP Plc (BP) is expected to plead guilty to criminal misconduct for the 2010 Deepwater Horizon disaster and likely to be asked to pay a record criminal penalty through a plea agreement it has attained with the U.S. Department of Justice, as reported by Reuters.

The sources also revealed that BP would plead guilty, on the condition that all future prosecution related to the charges is abandoned against the company. However, BP and the Justice Department have not revealed any details in this respect. 
 
BP has been confined to long standing negotiations with the U.S. government and Gulf Coast states to resolve the civil and criminal liability claims arising from the April 20, 2010, tragedy that resulted in a loss of lives of 11 personnel and polluted four Gulf Coast states. The settlement comprises billions of dollars in the worst spill in the U.S. history.
 
However, it remains uncertain as to what form of criminal misconduct BP will plead guilty to, and the amount it will have to shell out to resolve the civil charges inflicted upon it by the Justice Department. It is also uncertain whether the Justice Department will abandon all the civil charges against the company, if it pleads guilty.
 
Previously, BP had always denied all negligence charges. Now if this is proved wrong the company shall have to pay billions of dollar as penalties under the Clean Water Act. Earlier, to resolve the litigations, BP has given $7.8 billion to private plaintiffs, including individuals and businesses, over the economic and medical damages from the spill.
 
However, the reimbursements to be paid by Transocean Ltd (RIG - Analyst Report) and Halliburton Co. (HAL - Analyst Report) remains unclear. These companies provided cementing work on the well that leaked oil. Per the Justice Department, the mistake made by BP and Transocean in translating a key pressure test of the Macondo well clearly points to their negligence.
 
BP holds a Zacks #3 Rank (Short term Hold rating). Longer term, we maintain our Neutral recommendation.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UNITED THER… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%