BP Oil Spill

DEFINITION of 'BP Oil Spill'

A 2010 oil spill that occurred in the Gulf of Mexico as a result of the explosion and sinking of the Deepwater Horizon oil rig. The rig was owned by an offshore drilling contractor, Transocean, and was leased to BP for exploration of the Macondo Prospect, an oil field off the coast of Louisiana. Due to extensive damage to the wellhead and the depth at which the damage occurred, BP was unable to stop the flow of oil for several months. Estimates place the total volume of oil released at over 200 million gallons. The United States placed liability with BP, and required the company to pay cleanup and economic impact costs.

BREAKING DOWN 'BP Oil Spill'

Reaction to the oil spill was a public relations nightmare for BP. The United States government temporarily halted all offshore oil drilling activities, which resulted in several legal battles between states and the federal government. While the ultimate blame for the disaster was laid on BP, BP brought suit against the oil rig operators, designers and manufacturers. The volume of oil leaked into the Gulf of Mexico threatened the commercial interests, including fishing and tourism, of several states. As of 2010, it was the largest oil spill in United States history.

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