BP quietly paid just US$25.5M to Mexico after the worst oil spill of the century

Oct 02, 2018 News

Deepwater Horizon drilling rig in the Gulf of Mexico on April 21, 2010.

TONALÁ, Mexico — The Mexican government quietly accepted a $25.5 million payout earlier this year from oil giant BP to free the company of responsibility for polluting Mexican waters after the largest oil spill of the 21st century.

The tiny payout was part of a confidential settlement to dismiss a lawsuit relating to the Deepwater Horizon disaster, when a BP offshore drilling rig exploded on April 20, 2010, in the Gulf of Mexico.

It killed 11 workers and released more than 4 million barrels of oil off the coast of Louisiana — roughly 200 miles from Mexican territory. BP and the US government immediately set about addressing the pollution in US waters, but the extent of the damage to Mexican waters is still publicly unknown.

BP spent at least $60 billion in total related to the 2010 spill, more than $10 billion of which went to affected US fishermen and businesses.

Not a single peso has gone to an affected Mexican.

Dozens of previously unseen court documents, minutes from government meetings, and academic papers obtained by BuzzFeed News raise deep questions about both the Mexican government’s and BP’s actions in the case.

The Mexican government was slow to react to the spill, waiting until the last minute before filing a lawsuit against BP, before voluntarily dropping it less than five years later in a US$25.5 million settlement. At the same time, the Mexican government, under outgoing president Enrique Peña Nieto, made several multimillion-dollar deals with BP.

Meanwhile, the Mexican government appears to have ignored evidence that could have been used to bolster its case against BP. Reports by a number of scientific institutions were classified by the government, keeping the extent of the damage from the public, including more than 10,000 fishermen who sued the oil giant for compensation in a separate lawsuit.

A two-year-long investigation by BuzzFeed News and the corporate transparency initiative PODER can reveal for the first time that the Mexican government quietly settled a five-year-long lawsuit against BP in return for a $25.5 million payment; over $15 million has already been paid; even though they’ve never made a public announcement about the dismissal of the lawsuit or payment.

This agreement released BP from responsibility for any damages caused by the spill in Mexican waters.

Mexico said it could find no evidence of pollution caused by BP — potentially ignoring research submitted at least twice by some of Mexico’s most respected scientists.

The government spent millions funding 22 scientific studies that it did not introduce as evidence in its lawsuit. It also withheld them from the public.

The Mexican government simultaneously handed numerous lucrative energy contracts to BP, including five oil-drilling sites, two natural gas pipeline contracts, and a plan to build 1,500 BP-branded gas stations.

These findings were discovered after years of information requests through Mexico’s transparency agency, which were initially met with resistance. The agency regularly returned blacked-out documents and ignored questions, claiming the Mexican federal lawsuit in the US against BP barred it from releasing information. Many of the answers it did give were vague, and some were flat-out wrong.