BP got “the punishment it deserves”, the US attorney general, Loretta Lynch, said on Monday as she announced a record settlement of more than $20bn arising from the oil firm’s fatal 2010 Deepwater Horizon oil spill.

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The deal, also agreed with the five states most affected by the spill, ends five years of legal fights over the disaster, which claimed 11 lives and pumped nearly 134m gallons of oil into the Gulf of Mexico over 87 days. The final tally is $2bn higher than was announced in July and marks a record for the Department of Justice.

“BP is receiving the punishment it deserves, while also providing critical compensation for the injuries it caused to the environment and the economy of the Gulf region,” Lynch said. “The steep penalty should inspire BP and its peers to take every measure necessary to ensure that nothing like this can ever happen again.”



The spill “inflicted unprecedented damage”, said Lynch. “Ecosystems were disrupted. Businesses were shuttered. Countless men and women lost their livelihoods and their sense of security.”



The agreement, first announced in July, includes $5.5bn in Clean Water Act penalties and hands nearly $5bn to five Gulf states: Alabama, Florida, Louisiana, Mississippi and Texas. BP has previously paid out a further $5.84bn to people and businesses harmed by the spill.



The oil firm faced the maximum possible penalties after Judge Carl Barbier, who has overseen the tortuous legal case resulting from the disaster, ruled last September that BP had been “grossly negligent” in its handling of the well.

BP will also pay $700m for injuries and losses not yet known related to spill, $350m for the reimbursement of assessment costs, $167.4m for non-reimbursed costs related to the spill and $82.6m for lost royalties owed to the US on spilled oil, according to a consent decree filed at the US district court in New Orleans. The settlement takes BP’s total budget for the spill to more than $54bn. It will have 18 years to pay the fine.



Lynch said 85% of the money from the Clean Water Act fines would go to “clean up the damages the Gulf region has suffered. In addition, it will fund Gulf restoration projects that will revitalize damaged habitats such as coastal wetlands and support the revival of marine mammals, sea turtles, oysters and birds,” she said.



Lynch said that the settlement was “not designed to discourage any valid economic activity in the Gulf”. “What it is designed to do, however, is not only to compensate for damages to provide a way forward for the health and safety of the Gulf, but let other companies know they are going to be responsible for the harm that occurs should accidents like this happen in the future. So, we hope they will look at this. We hope that they will look at not only the settlement, but also the steps BP has taken in terms of transparency, and in terms of changes in procedures, and ensuring they are operating in as safe a manner as possible.”

Louisiana’s attorney general, Buddy Caldwell, said. “With this recovery, we can move forward to begin rebuilding our coast and repairing the damage caused by this spill rather than dealing with the uncertainty and delays of trial and appeals.”