BP on Friday has asked a federal judge to temporarily stop oil spill compensation payments, which it says are based on ‘fictitious’ and ‘absurd’ business economic loss basis.
The oil company, in a New Orleans court filing, has provided reference to the businesses that enjoyed strong earnings in 2010 when the spill occurred with no connection to it and with the coastline, and had received millions in spill compensation.
BP, which has divested a considerable part of its business to pay for compensations and fines for the disaster, said the company is likely to be ‘irreparably harmed’ due to the payouts, without relief from the court, reported Reuters.
The company said the payouts could cost it ‘billions’ more than its budget of $7.8bn when it agreed to a settlement in April 2012.
BP initially added more, reaching $8.5bn by the end of 2012, but soon realised that the amount it had set aside for compensation is not sufficient, when it actually started the process of payments.
The actual amount is dependent on decisions made by Louisiana lawyer, Patrick Juneau, who administers the payments, under a complex set of rules set out by the agreement.
BP was appealing a 5 March ruling of Judge Barbier, who upheld Juneau’s methods of compensation that call for payment to business claimants demanding compensation.
Two days after the ruling, the company said it will appeal on Barbier’s ruling and subsequently trimmed down the amount earmarked for payments to $7.7bn.
In the Friday filing, BP said, "The BEL (Business Economic Losses) policy decisions rewrite the agreement’s express terms, and contradict its purpose, plain text, and underlying principles by authorizing compensation awards for claimants seeking to recover for non-existent ‘losses’."