Court orders BP to pay up to $18 billion in damages for Gulf oil spill

A judge ruled on Thursday that oil giant BP's reckless conduct led to the massive 2010 Gulf of Mexico oil spill, a decision that could cost BP an additional $17.6 billion in damages over what is widely believed to have been the worst offshore oil spill in U.S. history.

The ruling means BP now faces a fine under the Clean Water Act of $4,300 per barrel of oil spilled. The number of barrels spilled is being debated, but is likely to fall between 2.4 million and 4.1 million, which would make for a fine of between $10.3 billion and $17.6 billion.

The ruling raises new concerns for investors: the prospect of an additional big outflow of cash, and not knowing how or when the fine will be finalized or paid.

BP shares fell $2.72, or 5.7 percent, to $44.99 around midday on Thursday, reducing the company's market value by $7 billion. The price was near $60 per share just before the April 2010 spill.

BP said it would appeal the ruling, a process that puts off a final decision on the fine and also likely delays other pending court cases concerning the spill.

"It's pretty severe," said Justin Jenkins, an analyst at Raymond James, about the ruling. "And now there are even more unknowns about what the final number will be."

BP, which has already paid billions to those hurt by the spill, had set aside $3.5 billion for possible additional costs.

And BP is not the only company under fire over the spill. On Tuesday, Halliburton reached a $1.1 billion settlement over its role in the 2010 spill in the Gulf of Mexico. 

Halliburton provided cementing services for BP’s well and placed equipment called “centralizers,” which are responsible for stabilizing the drilled hole during cementing. The company said the spill was BP’s fault because it decided to use only six centralizers, which Halliburton said was an effort by BP to save time and money.

The U.S. District Court for the Eastern District of Louisiana must still approve the settlement, Halliburton said. The amount will be paid in three installments over the next two years and will be kept in a trust until all appeals are resolved, the company said.

Al Jazeera and wire services