BP Share News (BP.)

By Jonathan Stempel March 4 (Reuters) - A divided U.S. appeals court hasrejected BP Plc's bid to block businesses from recoveringmoney over the 2010 Gulf of Mexico oil spill, even if they couldnot trace their economic losses to the disaster. By a 2-1 vote, the 5th U.S. Circuit Court of Appeals in NewOrleans late Monday upheld a Dec. 24 ruling by U.S. DistrictJudge Carl Barbier in New Orleans, authorizing the payments onso-called business economic loss claims. It also said aninjunction preventing payments should be lifted. The decision is a setback for BP's effort to limit paymentsunder a multi-billion dollar settlement over the April 20, 2010,explosion of the Deepwater Horizon drilling rig and rupture ofBP's Macondo oil well. That disaster killed 11 people and triggered the largestU.S. offshore oil spill. Geoff Morrell, a BP spokesman, said the company may appeal.BP had previously asked the full 5th Circuit to review a Jan. 10decision by another three-judge panel that upheld the settlementitself. BP previously settled U.S. criminal proceedings over thespill, and has completed two phases of a three-part civil trialbefore Barbier, where it could face more than $17 billion ofpenalties. The company has set aside $42.7 billion for cleanup,compensation, legal and other costs related to the spill,. It has estimated that business economic lossclaims in the latest appeal totaled about $1 billion. "Each $1 billion extra on claims equates to just 2 pence pershare for BP," Investec analysts said in a note. BP shares traded down 0.3 percent at 491.6 pence in lateafternoon trading in London. RESUMPTION OF PAYMENTS EXPECTED Barbier ruled that BP would have to live with its earlierinterpretation of a Dec. 2012 settlement with businesses andindividuals harmed by the spill, in which certain businessesclaiming losses were presumed to have suffered harm. BP argued that this would allow businesses to recover forfictitious losses, but the 5th Circuit rejected its appeal. "The settlement agreement does not require a claimant tosubmit evidence that the claim arose as a result of the oilspill," Circuit Judge Leslie Southwick wrote for the majority. Terms of the settlement "are not as protective of BP'spresent concerns as might have been achievable, but they are theprotections that were accepted by the parties and approved bythe district court," the judge added. The 5th Circuit also said claims administrator PatrickJuneau retained the authority to root out bogus claims, withouthaving to perform the "gatekeeping" function that BP sought. Circuit Judge Edith Brown Clement dissented, saying thedecision wrongly helps claimants whose losses had "absolutelynothing to do with Deepwater Horizon or BP's conduct." Steve Herman and Jim Roy, who represent the businessclaimants, said in a joint statement: "Today's ruling makesclear that BP can't rewrite the deal it agreed to." Juneau, in a statement, said the decision "appears to clearthe way" for the resumption of payments on business economicloss claims, and that he will resume making such payments upon aformal direction from the district court. BP originally projected that the settlement would cost $7.8billion. As of Feb. 4, it had boosted this estimate to $9.2billion, and said this sum could grow "significantly higher." As of Monday, about $3.84 billion had been paid out to42,272 claimants, according to Juneau's website. () The case is In re: Deepwater Horizon, 5th U.S. Circuit Courtof Appeals, Nos. 13-30315 and 13-30329.