BP told court officials that its U.S. unit will be out of cash if the company is ordered to pay even less than a quarter of the $13.7 billion in fines its facing for the 2010 Deepwater Horizon spill.
In court documents the company said if its ordered to pay more than $2.3 billion in fines its U.S. unit will be out of available cash for the year, the Houston Chronicle said Friday.
BP said its U.S. unit would be out of cash after a fine that large even if crude prices bounced back to $100 per barrel.
Prosecutors argued the company could raise the necessary funds by borrowing from internal and external lenders or by selling assets.
BP Exploration & Production (BPXP) said it has no cash set aside to pay a potential penalty and it can not assume its affiliates will step in to cover its funding needs, the Times-Picaynue said.
BP added that selling assets to pay for the fine would further damage the company.
“The United States incorrectly suggests that BPXP’s past borrowing from affiliates allows one to assume future funding to pay” BP told the Chronicle.
BP is facing penalties of up to $4,300 per barrel for the 2010 Macando well blowout that killed 11 people and caused the largest oil spill in U.S. history.
The company was on the hook for up to $18 billion in Clean Water Act penalties before U.S. District Court Judge Carl Barbier found the government had overestimated the size of the spill.
The company has already spent more than $28 billion on response, cleanup, early restoration and claims payments tied to the spill.
The Deepwater Horizon trial is currently in the final penalty phase but no decision on the fines has been issued yet.
Last month a study conducted by BP found that portions of the U.S. Gulf of Mexico affected by the Deepwater Horizon spill are returning back to their pre-spill condition.