US court backs BP in dispute over compensation for oil spill

LONDON (AFP) - A US court has given BP a boost in its fight to limit how much it must pay in compensation for the 2010 oil spill disaster in the Gulf of Mexico.

An appeals court in New Orleans ruled on Wednesday that payments to some companies with disputed loss claims arising from the Deepwater Horizon spill must stop, pending further study by a lower court.

The British energy giant reached a US$7.8 billion (S$9.7 billion) settlement last year with thousands of people and businesses hit by the worst environmental disaster in US history.

But it has been challenging the way Patrick Juneau, the lower court-appointed administrator of claims, calculates companies' compensation for lost profits.

BP said Juneau's methods led to payouts that were too large or improper and that because of this it could not longer estimate how much it would have to pay out.

The appeals court said late on Wednesday that District Court Judge Carl Barbier had to re-examine the language of the settlement to resolve how losses should be calculated.

It also said he had to probe whether settlement money was going to companies not affected by the spill.

BP welcomed the ruling, saying it "affirms what BP has been saying since the beginning: claimants should not be paid for fictitious or wholly non-existent losses.

"We are gratified that the systematic payment of such claims by the claims administrator must now come to an end."

The Deepwater Horizon rig exploded and killed 11 workers, and spilled oil for 87 days until it was plugged. The disaster blackened beaches in five states and crippled the region's tourism and fishing industries in a tragedy that riveted the United States.