Still, BP's willingness to agree to a settlement with no cap will help it in future talks with states and the federal government, experts say.
BP is facing Clean Water Act fines of $5.4 billion to $21.1 billion, depending on whether BP is judged to have been grossly negligent in the design, construction or operation of the well.
Eric Schaeffer, who investigated oil spills for the Environmental Protection Agency as a former head of civil enforcement, said that a settlement with the government could reduce those charges by half.
Friday's deal with victims could also help BP work with the government in the future as it drills for oil in the federally controlled waters in the Gulf, one of the most important drilling regions in the world for BP. It's especially important for BP because its reputation was already tarnished from other recent environmental disasters, including a Texas City refinery fire in 2005 that killed 15 people and pipeline spills in 2006, 2009 and 2011 in Alaska.
"If the government doesn't have confidence in the company because of their track record, it's going to look harder for a reason to reject their permit," Schaeffer said.
In the wake of the disaster, BP was forced to cut its dividend, borrow money and begin selling off assets to pay for expenses. So far, it has sold $21 billion worth of oil fields, refineries and chemical plants on four continents, and it is trying to sell assets worth another $17 billion.
BP chief executive Tony Hayward was forced to step down in the fall of 2010 after making a series of gaffes related to the spill. BP's attempts to create an environmentally friendly image were crushed, and independent gas station owners with BP-branded stations lost business from upset customers.
The company's share price of $47.50 is still 21 percent below its $60.48 close before the spill on April 20, 2010. The well was finally capped on July 15 of that year.
Despite the spill and the legal and financial setbacks that followed, BP remains one of the world's biggest and most profitable companies. It is the fourth-largest investor-owned oil company. BP earned $27.5 billion in 2011 on revenue of $376 billion, helped by historically high oil prices that have padded the profits of all oil producers. Its shares have almost doubled from their low of $27.05 on June 25, 2010, when the well was still spewing oil and a series of efforts to plug the well had failed.
BP CEO Bob Dudley said in a statement that the settlement "represents significant progress toward resolving issues" from the disaster.
At times during the summer of 2010, BP's survival as a company was questioned. Goldman Sachs had estimated the spill costs could reach $200 billion.
BP took an accounting charge of $40.9 billion in 2010 to cover such costs. The company has received four payments from partners in the project, including $4 billion from minority owner Anadarko Petroleum and $250 million from Cameron International Corp, which made the blowout preventer that failed to prevent the spill. These settlements and other adjustments brought BP's total write-off to $37.2 billion.
The company has paid out $28.1 billion in expenses, claims and contributions to the victims' trust fund. That leaves the company with $9.1 billion to pay fines and other penalties from states, the federal government and others. That would not be enough to cover federal environmental fines if BP is faced to pay the maximum fine of $4,300 per barrel, or $21.1 billion.
BP is suing Transocean, which owned the Deepwater Horizon rig and Halliburton, the contractor hired by BP to cement the Macondo well, to help pay for cleanup costs. Phil Weiss, an analyst at Argus Research, does not expect BP to win much, though.
Fadel Gheit, an analyst at Oppenheimer & Co., said that by agreeing to a substantial settlement with individuals and businesses, BP is proving it is willing to pay whatever it needs to try to put the oil spill behind it.
"They have been telling the government: 'We'll do whatever it takes. We're just going to pay and get this over with. We want to be back in business,'" Gheit said.
Kunzelman contributed from New Orleans. AP Writer Cain Burdeau also contributed to this story from New Orleans.
Jonathan Fahey can be reached at http://twitter.com/JonathanFahey .
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