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BP loses second chance of halting oil spill payouts

The US judge rejects the British oil giant’s plea to suspend payments till the completion of Louis Freeh probe.

The British oil and gas giant BP has lost a second chance to halt compensation payments for the victims of the 2010 Deepwater Horizon oil rig explosion that killed 11 workers and leaked about four million barrels of oil into the Gulf of Mexico.

In the latest ruling, the US District Judge Carl Barbier said that a probe into alleged payout fraud at the Mobile, Alabama claims assistance center did not find any credible evidence.

In July, Barbier rejected BP’s demand to halt the payments till the completion of investigation by Louis Freeh, a former director of the Federal Bureau of Investigation (FBI). BP has been arguing that fraud and false payments are pooling up the compensation fund.

Freeh was appointed by Barbier to probe into allegations of misconduct in claims settlement process.

Barbier was quoted by Bloomberg as saying: “None of the claims represented by the firms of two of the panelists have been approved, paid or appealed. The alleged conflicts are not a basis upon which to suspend the entire claims payment program.”

Geoff Morrell, a BP spokesman in an e-mail statement to Bloomberg, said: “As we await the completion of this broad investigation [by Mr Freeh], we continue to believe a temporary pause in payments is warranted. BP is reviewing its options with respect to the district court’s decision today.”

BP initially estimated the oil spill compensation to be about $7.8bn (£5.03bn). However, due to rise in costs, it increased the compensation to $9.6bn.