The agreement adds to the $43.8 billion that BP had previously set aside for criminal and civil penalties and cleanup costs. The company said its total pre-tax charge for the spill now stands at $53.8 billion.
BP shares jumped more than 5 percent in New York trading as investors said the British company, often mentioned as a potential acquisition target, could now turn the page on one of the darkest chapters in its century-long history.
Under the agreement with the U.S. Department of Justice and the states, BP will pay at least $12.8 billion for Clean Water Act fines and natural resource damages, plus $4.9 billion to states. The payouts will be staggered over as many as 18 years. The preliminary settlement, subject to all sorts of variables, avoids a substantial amount of further litigation.
