BP to pay $18.7b to settle oil spill claims

BP and five US Gulf Coast states have announced a record US$18.7 billion settlement on Thursday following the Gulf of Mexico oil spill in 2010.

The settlement, if accepted by a federal judge, would end a years-long battle between BP and the US government on how much BP owed, in Clean Water Act penalties, after a nearly 134 million gallon spill.

The environmental disaster affected Florida, Alabama, Mississippi, Louisiana and Texas.

Florida Attorney General Pam Bondi welcomes the news on behalf of her state.

"I'm proud to report that our state not only helped lead this historic effort, but negotiated a landmark agreement on behalf of the people of Florida. A little more than five years ago, our state and our entire Gulf region woke up to a story that shocked our nation. An oil spill that not only threatened states that depend on the Gulf for their economic livelihood, but also resulted in the economic loss of 11 lives."

The settlement will be the largest paid by a single company, following the biggest offshore oil spill in US history.

According to BP, its costs associated with the oil spill have already exceeded 43 billion dollars even without the Clean Water Act fine.

The Deepwater Horizon oil rig exploded in April 2010, killing 11 people and spreading oil across miles of Gulf Coast shoreline.