BP Agrees To Provide $1B For Gulf Restoration Projects

WASHINGTON (Dow Jones)–BP Plc has agreed to provide $1 billion to help restore wildlife and habitats in the Gulf of Mexico as part of an agreement with the U.S. and Gulf Coast state governments, the Justice Department said Thursday.

This agreement, billed as the largest of its kind, falls on the heels of the one-year anniversary of the explosion of the Deepwater Horizon rig and the subsequent oil spill.

It also coincides with BP’s recently announced efforts to sue Halliburton Co., Transocean Ltd. and Cameron International Corp. for billions of dollars in damages. All three companies were involved, in one way or another, in the drilling project that caused the oil spill.

On Thursday, Transocean said that it filed cross-claims against BP and other parties in the oil spill.

The $1 billion agreement that BP struck with the federal and state governments–collectively known as the Natural Resource Trustees for the Deepwater Horizon oil spill–doesn’t release BP from liability for any other natural resource damages.

The money will be taken from a $20 billion fund that BP set up last year to pay for natural resource damages and to compensate victims of the spill, such as restaurant and hotel owners who lost business.

In a separate effort, the Justice Department is also looking into possible civil and criminal penalties against BP, Justice Department spokeswoman Jessica Smith said.

The trustees will use the money to rebuild coastal marshes and replenish damaged beaches, among other projects.

Under the Oil Pollution Act, federal and state government can assess injuries for natural resource damages and the trustees are currently conducting a full assessment of the damages caused by the Gulf spill. Once they assess the dollar value of those damages, the trustees will take into account any gains made by these early restoration projects, Smith said.

“This milestone agreement will allow us to jump-start restoration projects that will bring Gulf Coast marshes, wetlands, and wildlife habitat back to health after the damage they suffered as a result of the Deepwater Horizon spill,” Interior Secretary Ken Salazar said in a statement.

BP’s American depositary shares were recently up 0.4% to $46.10.

-By Tennille Tracy, Dow Jones Newswires

Image via NOAA