British Petroleum (BP) reached an agreement with the Mexican government in February to pay a vastly reduced fine for environmental damage following the Deepwater Horizon oil spill in 2010, a watchdog group alleges.
The corporate transparency group PODER said yesterday that BP secretly negotiated to pay Mexico US $25.5 million, a tiny fraction of the US $60 billion it paid in compensation in the United States.
In exchange, the government dropped its lawsuit against the oil and gas conglomerate for the Gulf of Mexico spill.
“The Mexican government always preferred to reach an out-of-court settlement with the company, ignoring the interests of the fishing communities that were affected,” said PODER, which conducted a two-year investigation of the secret negotiations together with news website BuzzFeed.
“Not a single peso has gone to an affected Mexican,” BuzzFeed said, adding that reports by several scientific institutions were classified by the government, keeping the public in the dark about the extent of the environmental damage.
The government has never made a public announcement about the dismissal of the lawsuit or the payment, of which over US $15 million has already been paid, the news outlet said.
The Deepwater Horizon drilling rig, located about 800 kilometers from Mexican territory, exploded on April 20, 2010, killing 11 workers and spilling 793 million liters of oil.
It is considered the largest marine oil spill in the history of the petroleum industry and affected huge stretches of coastline in both the United States and Mexico. Tens of thousands of animals are estimated to have been killed by the disaster.
While authorities in the United States were quick to respond, their Mexican counterparts were much slower despite experts warning that they needed to act.
Meetings between officials from BP and the federal government took place as President Peña Nieto’s landmark energy reform was opening up Mexico’s oil sector. Those discussions ultimately resulted in an agreement that released the former from any damages caused by the spill in Mexican waters.
BP has been a significant beneficiary of the reform, winning exploration and drilling rights for five oil blocks at government auctions and signing contracts for two natural gas pipelines.
It was the first foreign company to open gas stations in Mexico under the 2014 reform and has plans to increase its presence from the 279 stations it has already opened to 1,500 by 2021.
Government communications obtained by PODER and BuzzFeed showed that BP had explicitly linked “good business” with a “friendly” settlement deal during meetings with Mexican officials.
A brief on a meeting between BP and the Secretariat of Foreign Affairs (SRE) on August 18,2017 — six months before the settlement was reached — said that “BP reiterated its interest in reaching a friendly and final resolution to the conflict, given the good business environment in Mexico.”
Meanwhile, more than 10,000 Mexican fishermen are pursuing legal action against BP in a Louisiana court in an attempt to win compensation, PODER said.
“The quality of life of people on the [Gulf of Mexico] coast has worsened since the spill due to the decline in fishing,” the transparency group declared.