US says BP to pay $20 billion in fines for 2010 oil spill

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BP Plc will pay more than $20 billion in fines to resolve nearly all claims from its deadly Gulf of Mexico oil spill five years ago, marking the largest corporate settlement of its kind in U.S. history, Attorney General Loretta Lynch said on Monday.

The agreement, first outlined in July, adds to the $43.8 billion BP had previously set aside for criminal and civil penalties and cleanup costs. The company has said its total pre-tax charge for the spill is now around $53.8 billion.

The total penalties Lynch announced on Monday sounded higher than the $18.7 billion deal reached to this summer, in part because she included $1 billion in restoration work BP had agreed to long beforehand.

BP's shares rose nearly 3 percent in New York to $33.45 each. Investors have praised the agreement as essentially capping liabilities that could have been much larger.

See photos of the 2010 oil spill:

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2010 Gulf of Mexico oil spill
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US says BP to pay $20 billion in fines for 2010 oil spill
In this aerial photo taken in the Gulf of Mexico, more than 50 miles southeast of Venice on Louisiana's tip, the Deepwater Horizon oil rig is seen burning Wednesday, April 21, 2010. (AP Photo/Gerald Herbert)
** RE-TRANS WITH ALTERNATE CROP ** In this aerial photo taken in the Gulf of Mexico more than 50 miles southeast of Venice on Louisiana's tip, the Deepwater Horizon oil rig is seen burning Wednesday, April 21, 2010. (AP Photo/Gerald Herbert)
In this aerial photo taken in the Gulf of Mexico more than 50 miles southeast of Venice on Louisiana's tip, a boat with an oil boom tries to contain oil spilled from the explosion and collapse of the Deepwater Horizon oil rig, approximately seven miles from where the rig sunk, on Friday, April 23, 2010. (AP Photo/Gerald Herbert)
A cattle egret sits on a crew swing on the deck of the Joe Griffin at the site of the Deepwater Horizon oil rig explosion and oil spill in the Gulf of Mexico off the coast of Louisiana Sunday, May 9, 2010. (AP Photo/Gerald Herbert)
Oil, scooped up with a bucket from the Gulf of Mexico off the side of the supply vessel Joe Griffin, is seen in the hands of an AP reporter at the site of the Deepwater Horizon oil spill in the Gulf of Mexico, off the coast of Louisiana Monday, May 10, 2010. (AP Photo/Gerald Herbert)
The shoreline of the Chandeleur Islands, home of the Breton National Wildlife Refuge, is seen off the Southeastern coast of Lousiana Tuesday, April 27, 2010. The barrier islands are at risk from a growing oil spill and leak in the Gulf of Mexico, caused by the explosion and sinking of the Deepwater Horizon oil rig last week. (AP Photo/Gerald Herbert)
In this Wednesday April 21, 2010 photo released by the U.S. Coast Guard, a fire aboard the mobile offshore drilling unit Deepwater Horizon burns 52-miles southeast of Venice, La. Helicopters, ships and an airplane searched waters off Louisiana's coast Wednesday for missing workers after an explosion and fire that left an offshore drilling platform tilting in the Gulf of Mexico. (AP Photo/U.S. Coast Guard, Petty Officer 2nd Class Scott Lloyd)
In this aerial photo taken in the Gulf of Mexico more than 50 miles southeast of Venice on Louisiana's tip, the Deepwater Horizon oil rig is seen burning Wednesday, April 21, 2010. (AP Photo/Gerald Herbert)
In this aerial photo taken in the Gulf of Mexico more than 50 miles southeast of Venice on Louisiana's tip, a boat with an oil boom tries to contain oil spilled from the explosion and collapse of the Deepwater Horizon oil rig, approximately seven miles from where the rig sunk, on Friday, April 23, 2010. (AP Photo/Gerald Herbert)
Shrimping and fishing boats are seen docked at sunrise in Venice, La.,Tuesday, April 27, 2010. The The seafood industry in the Gulf of Mexico could be adversely affected by the growing oil slick that resulted from the explosion and sinking of the Deepwater Horizon oil rig last week. (AP Photo/Gerald Herbert)
FILE - In this April 2010 file photo, oil can be seen in the Gulf of Mexico, more than 50 miles southeast of Venice on Louisiana's tip, as a large plume of smoke rises from fires on BP's Deepwater Horizon offshore oil rig. Deep-water drilling is set to resume near the site of the catastrophic BP PLC well blowout that killed 11 workers and caused the nation's largest offshore oil spill five years ago off the coast of Louisiana. (AP Photo/Gerald Herbert, File)
A dispersant plane passes over an oil skimmer as it cleans oil from a leaking pipeline that resulted from last week's explosion and collapse of the Deepwater Horizon oil rig in the Gulf of Mexico near the coast of Louisiana Tuesday, April 27, 2010. (AP Photo/Patrick Semansky)
This April 28, 2010 image made from video released by the Deepwater Horizon Response Unified Command, shows an in situ burn in the Gulf of Mexico, in response to the oil spill after the explosion on the Deepwater Horizon. (AP Photo/U.S. Coast Guard, Petty Officer 1st Class Justin Sawyer)
A Brown Pelican is seen flying away from a group of birds on the Chandeleur Islands off the coast of Louisiana, Friday, April 30, 2010. The wildlife along the Louisiana Coast are vulnerable to the looming oil spill from last week's collapse and spill of the Deepwater Horizon oil rig. (AP Photo/Gerald Herbert)
Out of work fishermen hired by BP PLC lay oil booms in preparation for the looming oil spill from the sinking of the Deepwater Horizon oil rig in Gulf of Mexico, off the coast of Louisiana Sunday, May 2, 2010. (AP Photo/Gerald Herbert)
A dying catfish that has been picked at by birds floats on the surface of the water in the Breton Sound of the Gulf of Mexico off the coast of Lousiana Monday, May 3, 2010. Fish and wildlife are vulnerable to the oil spill resulting the explosion and sinking of the Deepwater Horizon oil rig. (AP Photo/Gerald Herbert)
In this aerial photo taken in the Gulf of Mexico more than 50 miles southeast of Venice on Louisiana's tip, a boat with an oil boom tries to contain oil spilled from the explosion and collapse of the Deepwater Horizon oil rig, approximately seven miles from where the rig sunk, on Friday, April 23, 2010. (AP Photo/Gerald Herbert)
A rig drilling a relief well and support vessel are seen in the Gulf of Mexico, La., Tuesday, May 4, 2010, at the site of the recent collapse and spill of the Deepwater Horizon oil rig. (AP Photo/Eric Gay)
With a sheen of oil as far as the eye can see, the sun rises as the Joe Griffin arrives at the rig explosion site carrying the containment vessel which will be used to try to contain the Deepwater Horizon oil, Thursday, May 6, 2010. (AP Photo/Gerald Herbert)
Oil is seen swirling beneath the Joe Griffin as it arrives at the rig explosion site carrying the containment vessel, which will be used to try to contain the Deepwater Horizon oil, Thursday, May 6, 2010. (AP Photo/Gerald Herbert)
An oil-soaked bird struggles against the side of the HOS Iron Horse supply vessel at the site of the Deepwater Horizon oil rig explosion and spill in the Gulf of Mexico off the coast of Louisiana Sunday, May 9, 2010. (AP Photo/Gerald Herbert)
Oil is seen in the water from the bridge of the Joe Griffin at the site of the Deepwater Horizon oil spill in the Gulf of Mexico off the coast of Louisiana Tuesday, May 11, 2010. (AP Photo/Gerald Herbert, Pool)
A Louisiana National Guard helicopter carrying Louisiana Gov. Bobby Jindal flies over wetlands as workers lay oil boom, bottom, on Elmer's Island in Grand Isle, La., Thursday, May 20, 2010. Jindal was on an aerial tour to view oil from last month's Deepwater Horizon oil rig explosion in the Gulf of Mexico that has started drifting ashore along the Louisiana coast. (AP Photo/Patrick Semansky)
A seagul flies over the Chandeleur Islands, home of the Breton National Wildlife Refuge, is seen off the Southeastern coast of Lousiana Tuesday, April 27, 2010. The barrier islands are at risk from a growing oil spill and leak in the Gulf of Mexico, caused by the explosion and sinking of the Deepwater Horizon oil rig last week. (AP Photo/Gerald Herbert)
A Louisiana National Guard motor grader grades a beach as oil laps onto the shore on Elmer's Island in Grand Isle, La., Thursday, May 20, 2010. Oil from last month's Deepwater Horizon oil rig explosion in the Gulf of Mexico has started drifting ashore along the Louisiana coast. (AP Photo/Patrick Semansky)
Tug boats pull a tank, center, containing oil and water skimmed from the surface of the Gulf of Mexico near the coast of Louisiana, Friday, May 21, 2010. Oil from last month's Deepwater Horizon oil rig explosion in the Gulf has started drifting ashore along the Louisiana coast. (AP Photo/Patrick Semansky)
A worker rakes oil and debris that washed up onto a beach in Grand Isle, La., Saturday, May 22, 2010. Oil from last month's Deepwater Horizon oil rig explosion in the Gulf of Mexico has started drifting ashore along the Louisiana coast. (AP Photo/Patrick Semansky)
Workers collect oil and debris that washed up onto a beach in Grand Isle, La., Saturday, May 22, 2010. Oil from last month's Deepwater Horizon oil rig explosion in the Gulf of Mexico has started drifting ashore along the Louisiana coast. (AP Photo/Patrick Semansky)
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The fines - to be paid to the federal government, five Gulf Coast states and hundreds of municipalities over 18 years - will fund environmental restoration and economic development programs to address the worst offshore spill in U.S. history.

"This agreement will launch one of the largest environmental restoration efforts the world has ever seen," Lynch said.

The spill fouled 1,300 miles of coastline and dumped more than three million barrels of crude into the sea, hurting fishermen and prompting overhauls of safety rules and emergency plans in one of the world's most prolific offshore oil basins.

The core of the agreement includes $7.1 billion for natural resource damages, $5.5 billion for Clean Water Act fines, and $4.9 billion in payments to states.

The Macondo well blowout and the fire on the Deepwater Horizon drilling rig on April 20, 2010 killed 11 workers.

Federal and state officials formally filed the settlement on Monday and it should be approved by a U.S. District Court in Louisiana soon.

"The filing of the consent decree does not reflect a new settlement or any new money," BP spokesman Geoff Morrell said.

In the past, BP has paid for liabilities by shedding assets, eroding about one-fifth of the earnings base it had before 2010.

Its smaller size among the bigger oil majors has made it vulnerable to potential takeovers, analysts have said.

BP has effectively settled all big claims from the spill. Previous settlements included a fund originally set at $7.8 billion to compensate individuals claiming economic harm from the spill.

Other settlements included one with contractors Transocean Ltd and Halliburton Co.

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