BP may be able to deduct the majority of the record-setting $20 billion settlement it reached for claims tied to the 2010 Deepwater Horizon accident.
The U.S. Public Interest Research Group, a consumer advocacy group, said Tuesday that BP may be able to claim up to $15.3 billion of the settlement as a tax deduction.
While corporations are not able to deduct penalties or fines paid to the government penalties only account for a small portion of the settlement.
BP will pay a Clean Water Act penalty of $5.5 billion plus interest.
The company will pay $8.1 billion in natural resource damages and up to an additional $700 million to address injuries to natural resources that are presently unknown, according to a statement released by the DOJ late last month.
BP will also pay $600 million for other claims, including claims under the False Claims Act, royalties and reimbursement of natural resource damage assessment costs and other expenses tied to the accident.
The settlement will be paid out over the course of 16 years.
The deal was approved by a federal judge on Monday and will also allow for the implementation of a related settlement of economic damage claims for five Gulf states and local governments.
The five states included in the settlement are Alabama, Florida, Louisiana, Mississippi and Texas.
According to BP’s 2015 annual report, the company has taken a cumulative pre-tax income statement charge of $55.5 billion as a result of the incident.
That sum excludes amounts that BP said were not “possible to measure reliably at this time.”
The settlement is the single largest settlement the DOJ has ever reached with a single entity.
The deal resolves all of the government’s civil claims against BP related to the April 2010 Macondo well blowout that caused the largest oil spill in U.S. history and killed 11 people.