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* Civil trial set to begin Feb. 25 in New Orleans
* DOJ civil settlement seen likelier, states unclear
* Louisiana pushing back against BP efforts to settle
By Kathy Finn and Braden Reddall
Feb 4 (Reuters) - It is a question that has lawyers and manyothers on the U.S. Gulf coast buzzing: Will BP strike a massivedeal to settle the remaining claims over the Gulf of Mexico wellblowout?
BP could be nearing a settlement of federal claims with theU.S. Department of Justice, but people tracking the case closelysay the company and coastal states, especially Louisiana, mightstill be far apart.
So unless the talks with the states quicken or the judgedelays the process in the hope a far-reaching deal will happen,the civil trial of the year will get under way on Feb. 25 in NewOrleans.
The chance of a DOJ settlement did increase somewhat on Jan.29 when a judge approved BP Plc's guilty plea on charges,including felony manslaughter and lying to Congress, for itsrole in the Macondo well blowout that killed 11 workers andgushed 4.9 million barrels of oil into the Gulf.
David Uhlmann, a University of Michigan professor and formerhead of the DOJ's environmental crimes section, has little doubtabout BP's wishes.
"BP does not want to re-live the nightmare of the Gulf oilspill for weeks and months in a U.S. courthouse," said Uhlmann,noting the financial risk was not one-sided because awards underthe Clean Water Act could range from $5 billion to $21 billion. "Both sides have too much to lose by going to trial."
That is why many experts believe a deal is bound to happen -at least with the U.S. federal government.
The other parties include thousands of private companies andindividuals whose cases, along with those of the coastal states,were consolidated under the management of U.S. District JudgeCarl Barbier. A separate settlement BP estimates at $7.8 billionwas reached with many, but not all, of the private plaintiffs.
Both Louisiana and Alabama are adamant about BP's debt tothe coast, and Louisiana has taken an especially hard line oncompensation for natural resource and economic damages.
Garret Graves, senior coastal adviser to Louisiana GovernorBobby Jindal, said settling any natural resource claims withoutLouisiana, which sustained the most damage from the spill, makeslittle sense.
"That would be a virtual impossibility because ofco-trusteeship over the resources," he said.
BP, which reports quarterly results on Tuesday, says it hasso far spent $24 billion on cleanup and compensation to coastalfirms. Add the $7.8 billion class-action settlement and lastweek's criminal plea and BP has committed $37 billion to date.
In any settlement talks, BP will surely still deny that itsactions constituted gross negligence, but the Department ofJustice has very publicly ratcheted up the pressure to settle.
A DOJ filing last Wednesday sought disclosure of alldocuments related to BP's preparation of "fraudulent statementsand representations" about the flow rate of oil from the well.
BP has "admitted that it endeavored to influence, obstruct,and impede a Congressional investigation" and must now put allpreviously withheld documents on the table, the filing said.
That gives the department "additional leverage," said RogerMarzulla, a Washington D.C. lawyer and a former head of theDOJ's environment and natural resources division. "It's anothertwist of the arm."
STATES' RIGHTS
Graves of Louisiana did not dismiss the possibility of theparties settling to stay out of court, but he took issue withmedia reports putting BP's remaining liability in the area of$17 billion, including last week's $4.5 billion settlement.
"Twelve or $13 billion doesn't do it," he said. "Because werepresent the people of the Gulf Coast, we'd like to get thisbehind us as quickly as possible, but we absolutely are ready togo to trial."
Blaine LeCesne, a law professor at Loyola University of NewOrleans who has kept close tabs on the case, also viewedLouisiana as a big obstacle to BP's hopes for a single sweepingdeal.
"Louisiana has very high demands and is taking a hard-nosedposition," LeCesne said. "The state does not want to discountits claims to the degree that BP wants."
LeCesne believes Louisiana alone wants $10 billion incompensation for natural resource damages.
"I don't know that those expectations are unrealistic," hesaid, noting the spill's impact on the seafood industry mighttake decades to become clear.
A complete settlement of all remaining oil spill issues alsowould require resolving claims against BP's primary contractorsat the well. Transocean Ltd owned the drilling rig andHalliburton Co performed cementing work.
On Jan. 3, Transocean signed a $1.4 billion deal with theDOJ to plead guilty to a misdemeanor Clean Water Act violationto resolve a civil and criminal probe into its role in Macondo,but it still faces claims by states and private plaintiffs.
Halliburton says it is still preparing its defense.
BP "PREPARING FOR TRIAL"
As for BP, on the sidelines of a company presentation inLondon in mid-January, Chief Executive Bob Dudley told Reuters:"All we can say is that we are preparing for the trial."
Regarding the total of 4.9 million barrels spilled, BP hasasked the court to exclude 800,000 barrels it says it recovered.That could reduce fines by up to $3.4 billion, based on a CleanWater Act (CWA) formula ranging from $1,100 per barrel spilledup to $4,300 per barrel, depending on whether "ordinary" or"gross" negligence is found.
Marzulla, the former DOJ environmental division head, sees aCWA settlement somewhere in the range of $10 billion.
The final tally depends on just how badly BP wants to avoida public proceeding, or how confident the DOJ is it can win.
Even a delay would allow Dudley to save some face when hedelivers a keynote speech to many of his peers at the CERAweekenergy conference in Houston on March 6.
Observers say avoiding a trial might also improve BP'schances of getting off a list of companies banned from federalcontracts.
LeCesne believed the rising tally BP has had to pay mightlead Judge Barbier to find that an additional $20 billion couldbe "simply too daunting, even for a company the size of BP."
If the trial proceeds, it will be the first in a two- orthree-phase proceeding overseen by Barbier. The first phasewould determine BP's liability for the blowout, while subsequenttrials, not yet scheduled, would examine efforts to shut downthe well and the extent of environmental and other damages.
The case is In re: Oil Spill by the Oil Rig "DeepwaterHorizon" in the Gulf of Mexico, on April 20, 2010, No.10-md-02179, in the U.S. District Court, Eastern District ofLouisiana.
Four individual criminal cases are also proceeding, againsttwo rig workers, an ex-BP engineer and a BP executive. Separatetrials are scheduled in the cases, with the first set for June.
