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BP oil spill litigation comes to court
BP has said it is keen to settle the claims ahead of the start of hearings. This could prevent some of the dirty laundry associated with the spill from being aired in a courtroom as well as spare BP and its partners lengthy and costly litigation.
"The most likely scenario continues to be a settlement at least between BP and the federal and state governments," said David Uhlmann, a professor at the University of Michigan Law School and former chief of the justice department's environmental crimes section.
"It does not serve the company's business interests to engage in a protracted legal battle over the Gulf oil spill."
BP has set aside $13 billion (8 billion pounds) dollars to cover outstanding liabilities. However, uncertainty over the final cost is a much bigger drag on the oil company's valuation, suggesting it could justify paying much more to make the cases go away.
Analysts at Societe Generale have estimated the gap between BP's total provision and the hit to its market capitalisation as $33 billion (20 billion pounds).
Suggesting even more upside from settling the cases is the fact that Chevron Corp (CVX.N), which pumps 23 percent less oil and gas than BP, is worth $60 billion (37 billion pounds) more.
But a settlement is complicated
Click to read the full article published on February 17, 2012