Final approval for $20-bn settlement over Deepwater Horizon oil spill on the cards

The $20-billion oil spill settlement between BP, the US federal government and the five US Gulf Coast states is on the way to final acceptance.

US Federal lawyers yesterday formally asked a judge in New Orleans to accept the agreement, which was announced last July and which sought to resolve years of legal fighting over damage from the 2010 Gulf oil spill.

According to a judge, BP had been "grossly negligent" in the offshore rig explosion that killed 11 workers and caused the 134 million gallon spill.

The settlement comes with $5.5 billion in civil penalties and billions more to cover environmental damage and other claims by the states and local governments.

Yesterday's filing also included thousands of pages of exhibits, including statements gathered during a public comment period.

 ''After reviewing the comments, the Department is confident that the proposed settlement is a fair resolution of this case, in the public interest, and consistent with the purposes of the Clean Water Act, Oil Pollution Act, and other applicable laws,'' the justice department said in a news release.

''This is another step toward finalizing the historic settlement, and we await a decision by the Court,'' BP spokesman Geoff Morrell said in an emailed statement.

The money would be paid out over a 16-year period and according to court papers, the civil penalties would not be tax deductible for the oil giant, although other settlement costs likely would likely be. However, there was disagreement among many who commented on the settlement on the issue.

''The Department received communications from almost 29,000 separate commenters,'' the justice department motion said. ''More than 99% of those commenters submitted form letters addressing one issue: concern about the issue of tax deductibility of payments due under the Decree.''

According to the motion, individual taxing authorities would be free to decide on the deductibility of anything other than the $5.5 billion in civil penalties.