Eyes turn to BP as Halliburton settles most Gulf disaster lawsuits

|About: Halliburton Company (HAL)|By:, SA News Editor

Halliburton’s (HAL -0.2%) agreement to settle most of the lawsuits stemming from its role in the 2010 Gulf of Mexico oil spill refocuses attention on the still-awaited court ruling that will decide the extent of BP’s (BP -1.5%) liability.

U.S. District Judge Barbier, who conducted a non-jury trial over fault for the Macondo disaster, is weighing whether BP and its co-defendants HAL and Transocean (RIG -1.7%) acted with gross negligence; the rulings will help define the scale of future payments, as well as the limits.

If Barbier decides BP acted with gross negligence, and accepts the U.S. estimate of the size of the spill, the company faces a maximum fine for violation of the Clean Water Act of $18B; if he rejects gross negligence and accepts the BP estimate, the maximum fine would be $2.7B.

BP has reserved $3.5B for civil penalties under the Clean Water Act and has not increased the reserve, the company said in its most recent quarterly filing.