Carl Court / AFP - Getty Images

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The trial over the worst oil spill in American history began on Monday in New Orleans, with a slew of lawyers representing the government, businesses, contractors and individuals mostly trying to place the blame on BP for the Gulf Coast oil spill.

Federal prosecutors and plaintiffs’ lawyers argued the oil giant is guilty of gross negligence that caused the 2010 disaster that killed 11 rig workers and poured 4 million barrels worth of oil into the Gulf of Mexico.

"Not only was it within BP's power to prevent the tragedy, it was its responsibility," said Mike Underhill, a U.S. Justice Department trial attorney.

Underhill argued that less than an hour after the BP well erupted, the company’s head well site leader noticed a problem in a pressure test.  It was at that moment the well should have been shut off, Underhill argued, but it was not and instead exploded.

Judge Carl Barbier is overseeing the trial with no jury at the federal court in New Orleans.  BP must show its errors do not meet the legal definition of gross negligence.  The company has already paid $37 billion in cleanup, restoration, fines and settlements since the spill.

It is likely that a settlement will be reached outside the court room before a verdict is reached.

BP lawyer Mike Brock argued the company is not solely responsible for the environmental disaster. Instead, that responsibility is shared by rig owner, Transcocrean, and cement services provider, Halliburton.  

"There were a number of mistakes and errors in judgment that were made by BP, Transocean and Halliburton," Brock said.

Transocean lawyer Brad Brian said BP had betrayed the trust of the workers on the rig and cited emails in which BP employees referred to it as “the well from hell.”

Halliburton's lawyer, Don Godwin, equally went after BP, but added Transocean should have shut off the well when the troubling signs were initially noticed.

"Now is when they want to pass the buck and blame my client for their misdeeds," he said.

Jim Roy, an attorney representing some of the plantiffs suing the three companies and others, said companies involved shoulder the blame. He told the judge they were motivated by "Production over protection. Profits over safety,"

Oil reached the shores of all five Gulf Coast states, wreaking havoc on local economies dependent on tourism and seafood. For that reason, there is a long list of plantifs looking for monetary compensation for their losses.

Despite the cleanup effort, many communities along the coast say they are still feeling the impact from the April 2010 spill.

Monday marked the opening of the trials first phase, aimed at assessing how much each company is to blame and their degree of negligence.  Future trials will focus on the amount of oil that spilled from the well and the damages.

BP has denied gross negligence since the Deepwater Horizon oil rig explosion.

Reuters contributed to this report

U.S. Coast Guard via Reuters

Fire boats battle the blazing remnants of the oil rig Deepwater Horizon off Louisiana on April 21, 2010.

WASHINGTON - Transocean Ltd has agreed to pay $1.4 billion to settle U.S. government charges arising from BP Plc's massive 2010 Deepwater Horizon oil spill in the Gulf of Mexico.

The settlement unveiled by the Department of Justice includes $1 billion in civil penalties and $400 million in criminal penalties. The company had set aside a total of $1.95 billion in potential losses related to the spill, including $1.5 billion for its anticipated settlement with the DoJ.

Shares of Transocean were up 7 percent at $49.50 on midday trading on the New York Stock Exchange. The Standard & Poor's 500 Index was up 0.1 percent.

"The bottom line to me is they now can put away the big black cloud that has been hanging over them," said Phil Weiss, an oil analyst at Argus. "I take this as a positive, even if the number is a little higher than I expected."

Switzerland-based Transocean owned the Deepwater Horizon rig that was drilling a mile-deep well when a surge of methane gas sparked an explosion on April 20, 2010. The explosion killed 11 men and led to one of the largest environmental disasters in U.S. history.

"This resolution of criminal allegations and civil claims against Transocean brings us one significant step closer to justice for the human, environmental and economic devastation wrought by the Deepwater Horizon disaster," U.S. Attorney General Eric Holder said in a statement.

BP to pay $4.5 billion, plead guilty to manslaughter in Gulf of Mexico oil spill

BP and Transocean had "multiple safety management system deficiencies that contributed to the Macondo incident," and neither had adequate safety rules, according to a July 2012 report from the U.S. Chemical Safety Board.

Transocean and BP disagreed on who was in charge of interpreting what is known as a negative pressure test, which could have alerted workers to the well's instability.

BP in November agreed to a settlement with the U.S. government worth $4.5 billion, including the largest criminal fine ever at $1.256 billion. The London-based oil company also agreed to plead guilty to obstruction of Congress, a felony.

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Two former BP employees were charged Wednesday with manslaughter in the 2010 Gulf spill disaster, while BP itself was blocked from bidding for U.S. government contracts until it shows it no longer lacks "business integrity". BP responded by saying it was working with the Obama administration to do just that. 

Gerald Herbert / AP

Robert Kaluza, a BP well site leader from the Deepwater Horizon oil rig explosion, talks with his attorneys outside court on Wednesday in New Orleans, La.

In New Orleans, a BP rig supervisor said he is innocent of manslaughter in the deaths of 11 workers in the 2010 explosion on the Deepwater Horizon offshore drilling rig that started the spill disaster.

"I think about the tragedy of the Deepwater Horizon every day," Robert Kaluza told reporters just before his arraignment. "But I did not cause this tragedy. I am innocent and I put my trust, reputation and future in the hands of the judge and the jury."

Kaluza and Donald Vidrine, both BP well site leaders, were indicted earlier this month on manslaughter charges. The federal indictment accuses them of disregarding abnormal high-pressure readings that should have been clear indications of trouble just before the explosion.

Kaluza's attorney, Shaun Clarke, said the men are scapegoats.

"Bob and Don did their jobs," Clarke said. "They did them correctly and they did them in accordance with their training."

BP announced earlier this month that it will plead guilty to manslaughter, obstruction of Congress and other charges and pay a record $4.5 billion in penalties to resolve a Justice Department criminal probe.

Attorneys for BP and the Justice Department are scheduled to meet Dec. 11 with a federal judge to discuss a date for BP pleading guilty.

Matthew Hinton / AP

Donald Vidrine arrives at court Wednesday in New Orleans.

The Deepwater Horizon oil rig, owned by Transocean Ltd. but operated on behalf of BP, was drilling in the Gulf of Mexico off the Louisiana coast on April 20, 2010, when it was rocked by an explosion.

The bodies of 11 workers were never recovered.

Former BP executive David Rainey was charged separately Wednesday with concealing information from Congress about the amount of oil that was leaking from the well. Millions of gallons of crude oil spewed from BP's well for months.

Also Wednesday, the Environmental Protection Agency banned BP from new federal contracts over its "lack of business integrity".

BP and its affiliates must demonstrate they can meet federal business standards, the EPA said. The suspension is "standard practice" and BP's existing U.S. government contracts are not affected, it said. 

In a statement, BP said it has been in "regular dialogue" with the EPA, and that the agency has informed BP that it is preparing an agreement that "would effectively resolve and lift this temporary suspension." The EPA has notified BP that the draft agreement will be available soon, BP said.

The U.S. government could use the suspension as leverage to pressure BP to settle civil charges, which could top $20 billion if BP is found to be grossly negligent for the spill under the U.S. Clean Water Act. 

The Justice Department says it intends to prove in a court case set to get underway in February that BP was grossly negligent, a claim the company has adamantly refuted.

BP and the U.S. government likely worked out a deal on the timing of the suspension before BP agreed to sign off on the Nov. 15 criminal plea deal, said Samuel Buell, a Duke University Law School professor and former federal prosecutor. 

"It's just inconceivable to me that BP's lawyers, that their board of directors would have entered into that agreement last week without the issue of a suspension or debarment having been addressed," Buell said.

One long-time critic of BP applauded the decision. 

"After pleading guilty to such reckless behavior that killed men and constituted a crime against the environment, suspending BP's access to contracts with our government is the right thing to do," U.S. Rep. Edward Markey, a Democrat from Massachusetts, said in a statement.

The Associated Press and Reuters contributed to this report.

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Updated at 2:45 p.m. ET: BP will pay approximately $4.5 billion and plead guilty to manslaughter and other criminal charges as part of a settlement with the U.S. government over the deadly Deepwater Horizon rig explosion and massive oil spill in the Gulf of Mexico in 2010, the London-based oil giant and federal officials said Thursday.

The settlement total, to be paid out over five years, includes more than $1.25 billion in criminal fines -- the largest such penalty ever.

In addition, two BP employees have been indicted on manslaughter charges and a BP executive has been indicted on charges he lied to authorities about his work estimating the Gulf spill rate. 

At an afternoon news conference in New Orleans, U.S. Attorney General Eric Holder called the wide-ranging settlement "the latest step forward in our ongoing efforts to achieve justice for those whose lives and whose livelihoods were impacted by the largest environmental disaster in the history of the United States."

He said the settlement amounts mark "both the largest single criminal fine … and the largest total criminal resolution" in U.S. history.

BP has agreed to plead guilty to 11 counts of felony manslaughter, one count of felony obstruction of Congress and violations of the Clean Water and Migratory Bird Treaty Acts, Holder said.

The agreement, subject to court approval, resolves all federal criminal charges and all claims by the Securities and Exchange Commission against the company stemming from the explosion and leak, the largest accidental marine oil spill in history.

“All of us at BP deeply regret the tragic loss of life caused by the Deepwater Horizon accident as well as the impact of the spill on the Gulf coast region,” Bob Dudley, BP’s group chief executive, said in a statement announcing the settlement.

Lee Celano / Reuters, file

A hard hat from an oil worker lies in oil from the Deepwater Horizon oil spill on East Grand Terre Island, Louisiana in this June 8, 2010 photo.

“From the outset, we stepped up by responding to the spill, paying legitimate claims and funding restoration efforts in the Gulf. We apologize for our role in the accident, and as today’s resolution with the U.S. government further reflects, we have accepted responsibility for our actions.”

“We believe this resolution is in the best interest of BP and its shareholders,” added Carl-Henric Svanberg, BP’s chairman. “It removes two significant legal risks and allows us to vigorously defend the company against the remaining civil claims.”

In addition, a federal indictment unsealed Thursday charges David Rainey, who was BP's vice president of exploration for the Gulf of Mexico, with obstruction of Congress and making false statements. He is accused of lying to federal investigators when they asked him how he calculated a flow rate estimate for BP's blown-out well in the days after the disaster.

Two BP well site leaders, Robert Kaluza and Donald Vidrine, were indicted on manslaughter and involuntary charges, accused of disregarding abnormal high-pressure readings that should have glaring indications of trouble just before the deadly blowout.

Rainey's lawyer said his client did "absolutely nothing wrong." And attorneys for the two rig workers accused the Justice Department of making scapegoats out of them.   

"Bob was not an executive or high-level BP official. He was a dedicated rig worker who mourns his fallen co-workers every day," Kaluza attorneys Shaun Clarke and David Gerger said in a statement, The Associated Press reported. "No one should take any satisfaction in this indictment of an innocent man. This is not justice."

Before Thursday, the only person charged in the disaster was a former BP engineer who was arrested in April on obstruction of justice charges, according to AP. He was accused of deleting text messages about the company's response to the spill.

The Deepwater Horizon rig, 50 miles off the Louisiana coast, sank after the fiery explosion. The well on the sea floor spewed an estimated 206 million gallons of crude oil, soiling sensitive tidal estuaries and beaches, killing wildlife and shutting vast areas of the Gulf to commercial fishing.

After several attempts failed, engineers finally managed to cap the gushing well on July 15, 2010, halting the flow of oil into the Gulf after more than 85 days.

The spill exposed lax government oversight and led to a temporary ban on deepwater drilling while officials and the oil industry studied the risks, worked to make it safer and developed better disaster plans.

Thirteen of the 14 criminal charges to which BP plans to plead guilty pertain to the accident itself and stem from the negligent misinterpretation of a negative pressure test conducted on board the Deepwater Horizon, BP said. The company said it acknowledged this misinterpretation more than two years ago when it released its internal investigation report.

The remaining criminal count of obstruction pertains to allegations that company officials lied to Congress about how much oil was pouring out of the ruptured well during the spill response.

As part of its resolution of criminal claims with the U.S. government, BP will pay $4 billion in installments over five years and has also agreed to five years’ probation.

The amount includes about $1.25 billion in criminal fines, nearly $2.4 billion to be paid to the National Fish & Wildlife Foundation and $350 million to be paid to the National Academy of Sciences.

BP said it will also pay the SEC $525 million over three years to settle all securities claims.

The $1.25 criminal penalty is the largest in U.S. history, eclipsing the nearly $1.2 billion paid by Pfizer Inc. for marketing fraud related to its Bextra pain medicine in 2009, according to Bloomberg and AP.

BP has also agreed to take more steps to boost safety of drilling operations in the Gulf of Mexico, including third-party auditing and verification, training and well control equipment and processes such as blowout preventers and cementing.

Under U.S. law, companies convicted of certain criminal acts can be debarred from contracting with the federal government. BP says it has not been told of any intent by government agencies to suspend or debar the company in connection with the plea agreement.

Still pending is a separate civil court action in which the federal government contends BP was grossly negligent in causing the spill. “We’ve been in negotiations with BP. We have not reached a number that I consider satisfactory to resolve those claims that we have,” Holder said.

The criminal deal announced Thursday with the Justice Department is also separate from a March settlement in which BP agreed to pay $7.8 billion to more than 100,000 businesses and individuals who say they were harmed by the spill.

The Associated Press contributed to this report.

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U.S. Coast Guard via Reuters

The Deepwater Horizon oil rig burns on April 21, 2010. Eleven workers died and 4.9 million barrels of oil were spilled.

BP and the Obama administration have made progress toward a criminal and civil settlement over the 2010 Gulf of Mexico oil spill --narrowing their differences to $6 billion, the Wall Street Journal reported -- but Gulf Coast lawmakers from both parties are worried the terms will send most of the money to the federal government instead of the affected states.

"The Obama administration could be cutting a deal that allows BP to write off much of the fines as a tax deduction," Rep. Jo Bonner, R-Ala., said in a statement this week. "What’s more, the bulk of the penalty collected by the federal government would essentially be walled off from local control to be doled out as the administration sees fit."

The Journal, citing people familiar with the talks, reported Wednesday night that BP and the Justice Department are close to a broad deal but that a key obstacle is what degree of negligence, if any, should be attributed to BP. The more negligent, the higher the fines under the Clean Water Act.

Civil penalties under the act could range between $5.4 billion and $21 billion. One person familiar with the talks said that as of last month, the two sides were about $6 billion apart on a final settlement figure, the Journal reported.

The talks are separate from a March settlement whereby BP agreed to pay plaintiffs $7.8 billion for damages.

The Justice Department is weighing whether to levy fines not through the Clean Water Act but through a provision of the Oil Pollution Act that would allow BP to deduct the fines from corporate taxes, the Journal reported.

Moreover, funds in the Oil Pollution Act are controlled by the federal government, whereas Congress passed a law requiring that 80 percent of any BP fines via the Clean Water Act go to the five Gulf Coast states.

Louisiana could actually benefit from fines via the Oil Pollution Act, since those must go to environmental cleanup and Louisiana was the hardest hit state in terms of spill damage.

But seven House lawmakers from Alabama, Florida, Mississippi and Texas last week sent a letter to U.S. Attorney General Eric Holder saying they object to any deal "that disproportionately applies penalties" through the Oil Pollution Act.

Related: Oil sheen coming from Deepwater Horizon site

A similar letter was sent by eight Senators, including Louisiana's Mary Landrieu, a Democrat who co-sponsored the RESTORE Act requiring that 80 percent of any Clean Water Act fines go to the gulf states.

"Circumventing the will of Congress by short changing the RESTORE Act is wholly unacceptable to us," they wrote. 

An explosion aboard the Deepwater Horizon drilling rig on April 20, 2010, led to deaths of 11 workers and the worst oil spill in U.S. history -- 4.9 million barrels of oil.

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/

A worker uses a suction hose to remove oil washed ashore from the Deepwater Horizon spill in Belle Terre, La., on June 9, 2010.

LONDON -- Hopes that BP can settle early out of court on liability for its 2010 U.S. Gulf of Mexico oil spill looked forlorn on Wednesday after U.S. prosecutors laid out a legal case for gross negligence on which tens of billions of dollars hang.

In the two years that have passed since the spewing Macondo deep-water well was capped, the Department of Justice has made it clear BP may have a gross negligence case to answer -- implying a potential $21 billion fine on top of other payments,  some already made, others yet to be determined.

The British oil company has been vehement in denying such liability for the United States' worst offshore environmental disaster, which killed 11 people and poured crude into the sea for months. It repeated that position after the DoJ filing on Tuesday.

Nevertheless, the parties have been in talks about a multi-billion-dollar settlement that could cover outstanding liabilities, and two months ago the Financial Times raised expectations there was a deal in the air by reporting that BP was hoping to pay $15 billion to put the case behind it, while the DoJ was holding out for $25 billion.

The window of opportunity for a deal before the November presidential election and ahead of a trial scheduled to start in January has narrowed since then, and now investors see the weight of uncertainty on the British oil company's share price sticking around for a long time to come.

"The market was hoping that some sort agreement would be reached, either before the presidential elections or ahead of the trial," said Ivor Pether, a fund manager at Royal London Asset Management.

"We don't know when or whether they will reach agreement, but the aggressive language in today's DOJ statement might well reduce the chances of a swift settlement."

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In Isaac's wake, Gulf beaches stained with oil tar

BP shares were down 4 percent on Wednesday morning after 39 pages of DoJ court papers homed in on a key well pressure test, saying the way it had been "so stunningly, blindingly botched in so many ways, by so many people, demonstrates gross negligence."

Uncertainty over whether BP can continue to operate in Russia, and whether it can even exit its business there at a decent price, have combined with the oil spill wrangle to put BP's share valuation based on earnings at a discount to the sector in Europe, even though it is the second largest next to Royal Dutch/Shell .

"While these (DoJ) accusations are not entirely new or surprising, they appear to be a firming of the DoJ language," said Credit Suisse analyst Kim Fustier in a note.

"This suggests to us that a settlement acceptable to BP is not imminent, and lowers BP's chances of settling in the low end of the $15 (billion)-$25 billion range. Hence, if it cannot get to a satisfactory agreement we think it might be best for BP to continue to litigate, which would maintain the Macondo overhang for longer than we'd hoped. ... We believe a settlement or $20 billion or less would be a positive."

Breakup talk revived
Pressure for closure on the spill and in Russia is something chief executive Bob Dudley has become used to since he took over from Tony Hayward in the aftermath of the spill.

And on Wednesday, one analyst revived suggestions that the company should be broken up to release underlying value on the business.

"We reiterate that the best outcome for long-suffering BP shareholders, and indeed the only credible route to unlock our increased SoTP (sum-of-the-parts) value … is a demerger of remaining assets starting with the U.S.," said Investec analyst Stuart Joyner in a note.

Joyner said that valuation would be more than 68 percent higher than BP's current share price, and suggests there could be $90 billion of hidden value in a stock valued at around $132 billion. Other analysts' calculations based on pre-Macondo comparisons with rival Shell have put total lost value at between $60 billion and $70 billion.

"BP died when it failed to cap the Macondo spill in the first few days," said Joyner. "The CEO did a good job of saving BP from forced liquidation, but we do not believe he can revert to its pre-Macondo strategy." 

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Okaloosa County Sheriff's Office

Mark Bellinger, 52, former tourism official in Okaloosa county, Florida, left a suicide note and disappeared on Thursday after allegations surfaced about misuse of tax funds and money from BP to the county after the 2010 oil spill.

Florida authorities have issued an arrest warrant and initiated a nationwide search for a county tourism official who threatened suicide and disappeared after he was alleged to have used public funds to buy a 44-foot yacht and a home with combined value of more than $1.4 million, according to a report on nwfdailynews.com.

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A warrant obtained late Thursday by the Okaloosa County Sheriff’s Office and the Northwest Florida Mortgage Fraud Task Force calls for the arrest of Mark Bellinger, 52, the county’s tourist development council director, the report said.

Bellinger took on post in the immediate aftermath of the BP oil spill, and the nwfdailynews.com report said he was often praised for helping bolstering the industry in spite of the environmental disaster.

The warrant is related to allegations that Bellinger used money that came to the council from BP after the 2010 oil spill to buy a $747,000 home in Destin, Florida, the report said.  

Bellinger reportedly left a suicide note and then disappeared Thursday, two days after resigning from his position under pressure for using money from a bed tax — earmarked for advertising — to buy a $710,000 yacht, an earlier report on nwfdailynews.com said.

The county launched a probe into that purchase that it described in a press release as "unorthodox" and "secretive."

In questioning by county commissioners earlier in the week, Bellinger said the yacht, a 44-foot, 2011 Marquis 420 SC, was used to promote tourism.

"Our first priority remains his personal safety, but we are conducting a criminal investigation," county Undersheriff Don Adams said Friday, speaking to nwfdailynews.com about the search and arrest warrant.

Bellinger's car, a 2011 four-door silver Subaru Legacy with Florida license tag 262 NFS, is missing, the Sheriff's Office said. His name and photograph would be circulated nationwide, Adams said.

"If he has an encounter with law enforcement … they’ll know he’s wanted," Adams told nwfdailynews.com.

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A judge on Wednesday said he was leaning toward approving the settlement proposed by BP and a coalition of plaintiffs' lawyers to compensate individuals and businesses for the 2010 Gulf oil spill.

The plaintiffs' lawyers represent more than 100,000 individuals and businesses, but the proposal also has its critics -- among them shrimp processors, recreational fishermen and Halliburton, BP's cement contractor on the Macondo well.

"I'm leaning in favor of doing it, but I'm not going to do that from the bench here today," U.S. District Judge Carl Barbier said during a hearing in New Orleans, the Times-Picayune reported.

Barbier said that he intended to write a full order within a few days and that a final decision would not happen for several more weeks.

While most of the proposal's compensation was not capped, BP has estimated its exposure at $7.8 billion. The oil giant and lawyers' coalition agreed on the terms last month in a bid to avoid a trial that could take years.

The 2,000-page proposal would replace the Gulf Coast Claims Facility, which has managed claims so far, and is broken down into two categories:

• Economic and property damages. Individuals or businesses in Alabama, Louisiana, Mississippi, four Texas counties on the gulf and Florida's Panhandle and west coast may apply as long as they didn't take an earlier payment. Exceptions are: recreational fishermen, financial institutions, casinos, racetracks, oil companies and insurers.
• Medical benefits. These may be sought by cleanup workers and people who live within a half mile of Gulf Coast beaches or a mile from Gulf wetland areas. "Certain respiratory, gastrointestinal, eye, skin and neurophysiological" conditions, such as "dizziness, headaches, fainting" would be compensated, according to a summary of the proposal.

How much compensation an individual or business receives would be determined by complicated formulas based on various factors.

Some other highlights:

• The claims deadline would be April 22, 2014, or six months after the settlement's effective date, whichever is later.
• Lawyers' fees were estimated at around $600 million and would not come from any funds set aside for victims.
• An appeal process will be in place.
• A $2.3 billion fund to compensate seafood fishermen is the only part of the proposal that is capped. Shrimp processors want to be included in the fund.

BP has already taken a $37 billion accounting loss for the spill but, even with a settlement, it still faces tens of billions of dollars of potential claims from the U.S. government and several gulf states.

Clean Water Act fines alone could reach as high as $17.6 billion if gross negligence is determined.

In addition, BP and Macondo partners Transocean, which owned the drilling rig, and Halliburton, which cemented the well, have sued each other.

Halliburton also objects to the proposed settlement, saying it makes Halliburton "liable in part for settlement payments."

Wednesday's decision comes a day after a former BP engineer, Kurt Mix, was arrested and charged with obstruction of justice. He's accused of having deleted hundreds of text messages about the size of the spill.

Last Friday was the two-year anniversary of the worst U.S. oil spill, which was triggered when the Deepwater Horizon rig exploded on April 20, 2010, killing 11 workers and unleashing crude that wasn't fully contained until July 2010.

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The first criminal charges in the 2010 BP gulf spill were filed on Tuesday against a former BP engineer accused of intentionally deleting hundreds of text messages about the size of the spill.

It's clear from the court document unsealed with the case that the Justice Department's criminal investigation of the massive BP blowout includes this aspect: Did BP or its employees intentionally understate the amount of oil flowing from the well?

Kurt Mix, 50, was arrested earlier Tuesday on two charges of obstruction of justice, and then released on $100,000 bail after a federal court appearance in Houston, Texas.

"The department has filed initial charges in its investigation into the Deepwater Horizon disaster against an individual for allegedly deleting records relating to the amount of oil flowing from the Macondo well after the explosion," U.S. Attorney General Eric Holder said in a statement.

 Federal officials said more charges against others are expected.

"The Deepwater Horizon Task Force is continuing its investigation into the explosion and will hold accountable those who violated the law in connection with the largest environmental disaster in U.S. history," Holder said.

In the complaint, Mix is accused of deleting text messages on two occasions "after being repeatedly informed of his obligation to maintain such records." Most of those messages were later retrieved, the Justice Department said.

In one thread, Mix allegedly deleted a string of some 200 messages that had to do with a process dubbed "Top Kill" that was aimed at stopping the spill.

"Too much flowrate -- over 15,000" barrels of oil per day, Mix allegedly said in one text.

"At the time," the Justice Department noted, "BP’s public estimate of the flow rate was 5,000 BOPD -- three times lower than the minimum flow rate indicated in Mix’s text."

Moreover, BP "continued publicly to state that Top Kill was broadly proceeding according to plan," the complaint says.

"Before Top Kill commenced," the department added, "Mix and other engineers had concluded internally that Top Kill was unlikely to succeed if the flow rate was greater than 15,000 barrels of oil per day."

If convicted, Mix, a resident of Katy, Texas, faces a maximum penalty of 20 years in prison and a fine of up to $250,000 for each of the two criminal counts against him, the Justice Department said.

BP stated that while it would not comment on the case against Mix it has "clear policies requiring preservation of evidence in this case and has undertaken substantial and ongoing efforts to preserve evidence."

The company added that it "will continue cooperating in the Department of Justice's investigation."

The court document laying out the charges against Mix says that he began working with a BP team the day after the April 20, 2010, blowout. His initial estimates of the flow ranged from 64,000 barrels of oil a day to as much as 138,000.

It's clear that BP's own internal estimates were all over the place.  A little more than a week later, the document says, Mix sent his supervisors a summary of the computer modeling, which showed the flow could be as low as 1,000 barrels a day to as high as 146,000.

Lawsuits have been filed seeking financial compensation from BP, and the oil giant has reached a tentative $7.8 billion settlement with thousands of individuals and businesses.

In addition, the U.S. government is expected to seek billions of dollars in environmental fines. The final amount will depend on how much oil was determined to have spilled.

But Tuesday's charges were the first against an individual in the blast that killed 11 workers and spilled at least 200 million gallons of crude into the Gulf of Mexico.

Mix resigned from BP a few months ago, the Justice Department stated.

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U.S. Coast Guard via AP

Fire boat response crews spray water on the burning remnants of BP's Deepwater Horizon offshore oil rig on April 21, 2010.

BP and lawyers for tens of thousands of businesses and individuals hit by the 2010 gulf oil spill were trying to work out a settlement on Monday after a judge delayed the start of the trial by a week.

Citing three people familiar with the talks, Bloomberg news agency reported Monday that BP and the plaintiffs were discussing a $14 billion settlement.

"I had almost given up on the possibility of a global settlement before a trial began," Edward Sherman, a professor at Tulane University Law School and specialist in complex litigation, said Sunday. "Now, with an extra week, it seems to improve the chances."

A settlement could also be a key step toward BP reaching a broader settlement with its drilling partners, and with federal and state governments.

During a conference call between BP and a plaintiffs steering committee on Sunday, U.S. District Judge Carl Barbier cited "some progress" in settlement talks, two people close to the case told The Associated Press.

BP and the committee in a joint news release said they were working to reach an agreement that would "fairly compensate people and businesses affected by the Deepwater Horizon accident and oil spill."

The massive scope of the case — a maze of claims and counterclaims between the companies, federal and state governments and plaintiffs' attorneys — has elicited comparisons to the tobacco litigation of the 1990s.

Mountains of legal briefs
Roughly 340 plaintiffs' lawyers have worked on the case. BP has spent millions of dollars on experts and law firms. More than 300 depositions have been taken. Millions of pages of legal briefs have been filed. One Justice Department lawyer said it would take him 210 years to read all the pages submitted into the record if he read 1,000 pages a day.

Bloomberg's sources said under the proposed settlement BP would close its $20 billion Gulf Coast Claims Facility and shift the facility's remaining $14 billion to the plaintiffs.

The steering committee is overseeing lawsuits filed by individuals and businesses following the explosion on the Deepwater Horizon rig on April 20, 2010, in the Gulf of Mexico. The blast killed 11 workers and injured 17, and led to 206 million gallons of oil spewing from the blown-out well, soiling miles of coastline.

Even with a settlement, much work would remain:

• The U.S. government has sued BP and others for violating the Clean Water Act and other laws, which could result in fines totaling tens of billions of dollars.
• Gulf states are also seeking compensation for their losses.
• BP is also suing and being sued by its drilling partners.

Apart from BP, which owned 65 percent of the Macondo well, the main corporate defendants are Transocean, which owned the Deepwater Horizon rig, and Halliburton, which provided cementing services for the well. Several other companies are also involved in the trial.

BP has accepted responsibility for the disaster, and estimated its legal and cleanup costs for the spill will total $43 billion. Some analysts have said that figure could top $60 billion, especially if there were a finding that its activities at the project were "grossly negligent."

Earlier this month, BP said it had set aside $6.1 billion to cover claims by businesses. Lawyers for those plaintiffs said the amount was too low, and that BP should also award punitive damages, which the oil company says are not warranted.

Many industry analysts and experts say a quick settlement is in BP's best interest. 

If no settlement is reached, Barbier will preside over a three-phase, non-jury trial that could last the better part of a year. The first phase is designed to identify the causes of the deadly blowout and to assign percentages of fault to the companies involved in the ill-fated drilling project.

Financial analysts estimate BP could wind up paying anywhere from $15 billion to $30 billion over the lawsuits.

An AP analysis found that the company could conceivably face up to $52 billion in environmental fines and compensation if the judge determines the company was grossly negligent.

The decisions and actions that led to the explosion and spill already have been painstakingly investigated by the Coast Guard, federal regulators and a presidential commission. Their probes concluded that BP, Transocean and Halliburton deserve to share the blame for a string of risky decisions that were designed to save time and money.

Separately, BP has had discussions in recent days with the federal government and cement contractor Halliburton, according to several people close to the case.

Families of crew who died have other needs
Relatives of the 11 killed in the Deepwater Horizon blast say they are hoping for something more elusive: justice for lost loved ones.

Sheryl Revette, whose husband, Dewey, worked for Transocean and was among the 11 killed, doesn't have anything to gain financially from the trial. She wants an apology from the oil giant, something she said she hasn't received yet, even though she settled her claims against BP last year.

"I've never heard a word from them," said Revette, 48, of State Line, Miss. "But an apology isn't going to bring my husband back."

From the beginning of the disaster, many relatives of workers who died on the rig have felt that their tragic losses were unjustly overshadowed by corporate finger-pointing, legal wrangling, and concerns about the spill's environmental and economic impact along the Gulf Coast.

"Nobody cares about the 11 men who died," said Arleen Weise, 58, of Yorktown, Texas, whose 24-year-old son, Adam Weise, was killed in the blast. "Did everybody have to forget about those men?"

A BP spokesman said the company has expressed its sympathies to the victims' families from the outset. In a press release less than a week after the explosion, former BP CEO Tony Hayward said: "We owe a lot to everyone who works on offshore facilities around the world and no words can express the sorrow and pain when such a tragic incident happens."

Chris Jones, whose brother, Gordon, was also killed on the rig, had planned to drive in from Baton Rouge with other relatives to attend the start of the trial. He said he has mixed feelings about the prospect of a settlement that would eliminate the need for a trial. Jones said he would be disappointed if BP manages to "write a check to solve their problems."

"I was ready to go to trial and see their feet held close to the fire," he said Sunday after learning of the postponement. "It seems like the easy way out to pay whatever the plaintiffs are willing to take."

Jones, an attorney, said he's not surprised that the oil giant would seek to avoid a long, costly trial.

"I know that is part of the game, so to speak," he said. "As long as they're paying a lot of money for the damage they caused, it would give me some relief."

The Associated Press and Reuters contributed to this report.

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