BP will pay $4.5 billion in penalties and plead guilty to felony misconduct in the Deepwater Horizon disaster that caused the worst offshore oil spill in the country’s history, the company has said.

The settlement includes a $1.256 billion criminal fine, the largest such levy in US history, the company says.

A settlement with the US Securities and Exchange Commission is also part of the deal, as are payments to the National Fish Wildlife Foundation and the National Academy of Sciences.

The April 2010 explosion on the Deepwater Horizon rig in the Gulf of Mexico killed 11 workers. The mile-deep Macondo oil well then spewed 4.9 million barrels of oil into the Gulf over 87 days, fouling shorelines from Texas to Florida and eclipsing in severity the 1989 Exxon Valdez spill in Alaska.

The oil company said it would plead guilty to 11 felony counts related to the workers’ deaths, a felony related to obstruction of congress and two misdemeanours.

BP still faces economic and environmental damage claims sought by four Gulf Coast states and other private plaintiffs.

BP has been negotiating for months with the US government and Gulf Coast states to settle billions of dollars of potential civil and criminal liability claims.

BP’s US shares were up about 1.3 per cent yesterday while its London-traded shares were 0.3 per cent higher.

Wall Street analysts were encouraged that the plea deal could resolve a significant share of the liability BP faces. However it is not a “global” deal to resolve all outstanding civil and criminal liability with the US government and Gulf Coast states.

“It certainly is an encouraging step,” said Pavel Molchanov, oil company analyst with Raymond James. “By eliminating the overhang of the criminal litigation, it is another step in clearing up BP’s legal framework as it relates to Macondo.”– (Reuters)