Trial over BP oil spill begins Monday

NEW ORLEANS -- On the cusp of trial over the catastrophic 2010 oil spill in the Gulf of Mexico, phalanxes of lawyers, executives and public officials have spent the waning days in settlement talks. Holed up in small groups inside law offices, war rooms and hotel suites in New Orleans and Washington, they are trying to put a number on what BP and its partners in the doomed Macondo well project should pay to make up for the worst offshore spill in U.S. history.

It is a complex equation, and the answer is proving elusive.

The federal government, Gulf states, plaintiffs' attorneys, BP Plc, rig owner Transocean Ltd. and cementer Halliburton Energy Services Inc. have been in simultaneous and separate negotiations in New Orleans, according to a person with direct knowledge of the talks and others who had been briefed on them.

Trial is set for Monday, and, by Friday, no deal had been reached, several people familiar with the negotiations told The Associated Press on condition of anonymity. The biggest stumbling block appeared to be the sheer size and sprawling uncertainty over the unprecedented dollar amounts at stake.

Financial analysts estimate BP's potential settlement payout at $15 billion to perhaps $30 billion. BP estimated it would cost about $41 billion in the weeks after the explosion to account for all of its costs, including cleanup, compensating businesses, and paying fines and ecological damages.

"This one is off the charts in terms of size and significance," said Eric Schaeffer, the director of the Environmental Integrity Project in Washington and former head of the Environmental Protection Agency's Office of Regulatory Enforcement.

BP has to weigh its chances of getting off cheaper by piecing together a sweeping settlement or put its fate in the hands of one man, a federal judge who will hear testimony in lieu of a jury. If the judge sides with plaintiffs on the amount of oil spilled and determines BP was grossly negligent, the company conceivably could face up to $52 billion in environmental fines and compensation alone, according to an AP analysis.

While such a scenario is unlikely, it illustrates the broad range and staggering sums at play.

The case is all but guaranteed to set records as the most expensive environmental disaster in history, far surpassing the 1989 Exxon Valdez disaster. Exxon ultimately settled with the U.S. government for $1 billion, which would be about $1.8 billion today.

If BP settles, it's almost certain to dwarf previous deals the United States has reached with corporate offenders in any industry. That record now stands at $2.3 billion against Pfizer Inc. in 2009 to settle claims over the painkiller Bextra, according to the Justice Department.

And once the civil case is resolved, depending on the scope of any settlement, BP still could face criminal fines; penalties for violations of oil pollution, clean water and wildlife protection laws; and still-pending economic losses due to the partial shutdown of the Gulf. Morgan Stanley analysts estimated criminal fines would come in between $5 billion and $15 billion in any eventual settlement.

The April 20, 2010, blowout of BP's deepwater Macondo well killed 11 workers and injured 17.