Analysts expect BP to be paying fines, damages, legal costs and other expenses for years

I keep seeing articles stating "Analysts expect BP to be paying fines, damages, legal costs and other expenses for years", regarding the spill in the gulf of mexico. But learning similar past events, with the Exxon Valdez being a well known sample, I have to doubt these claims. Adding to it BP's recent assets sale, combined with its commitment to establish a fund, and assessing the legal ramifications of such a commitment, when remembering the protections oil companies like BP enjoy, I'd be quite surprised if BP's total losses regarding this sad incident will pass the 6 Billion mark. People forget that once the well is sealed (and it seems we are getting closer to that happy moment), the accumulation of damage will slow, or even stop. The current statistics regarding the lower-than-expected pressure in the currently-sealing cap may indicate that the spill wasn't as large as claimed. And most importantly - the biggest oil-clearing navy ever currently operates in the gulf of mexico, which in my mind, makes claims regarding possible future damages, extremely unrealistic. It is true that the future in this case (as in any other), is an unchartered territory, but one cannot deny that never in the past have so many efforts been put into the clearing and restoring efforts of an oil-spill accident. This has got to be counted, and analysts keep forgetting that.

It might be hard to agree with me, without a little more knowledge regarding past oil spill aftermaths. The Exxon Valdez "Litigation and cleanup costs" wikipedia article summarizes nicely this well known event's aftermath:

"The case of Baker v. Exxon, an Anchorage jury awarded $287 million for actual damages and $5 billion for punitive damages. The punitive damages amount was equal to a single year's profit by Exxon at that time...Exxon appealed the ruling, [and after a series of appeals, reductions and changes] On May 23, 2007, the 9th Circuit Court of Appeals denied ExxonMobil's request for a third hearing and let stand its ruling that Exxon owes $2.5 billion in punitive damages. Exxon then appealed to the Supreme Court, which agreed to hear the case...In a decision issued June 25, 2008, Justice David Souter issued the judgment of the court, vacating the $2.5 billion award and remanding the case back to a lower court, finding that the damages were excessive with respect to maritime common law. Exxon's actions were deemed "worse than negligent but less than malicious." The judgment limits punitive damages to the compensatory damages, which for this case were calculated as $507.5 million.The basis for limiting punitive damages to no more than twice the actual damages has no precedent to support it....Exxon's official position is that punitive damages greater than $25 million are not justified because the spill resulted from an accident, and because Exxon spent an estimated $2 billion cleaning up the spill and a further $1 billion to settle related civil and criminal charges. " [I added the emphasis underlines ]

So, more than 17 years after the oil spill in Prince William's sound, Exxon's damamges remained at the scale of about 3 Billions - the sum spent on cleaning the oil and settling civil and criminal charges, with the punitive damamges summing up to another half a billion. Sure, these aren't pennies, but these are far from taking a whole year of profit from Exxon, as the punitive damages initiators intended.

Furthermore:

"Exxon recovered a significant portion of clean-up and legal expenses through insurance claims associated with the grounding of the Exxon Valdez. Also, in 1991, Exxon made a quiet, separate financial settlement of damages with a group of seafood producers known as the Seattle Seven for the disaster's effect on the Alaskan seafood industry. The agreement granted $63.75 million to the Seattle Seven, but stipulated that the seafood companies would have to repay almost all of any punitive damages awarded in other civil proceedings...."

So, learning from Exxon, we can assume that -

• once underwater oil well is sealed, BP will send its lawyers to reach settlements of damages with the different groups of businesses impacted by the spill;
• BP will fight punitive approaches every inch of the way, and will not yield, even if it takes more than a decade (or closer to two), as a lesson from Exxon;
• after the inital 5 Billions the company promised to contribute to the fund whose creation the U.S government forced out of BP, further sums will not be handed over by BP so easily. I doubt that BP will quickly pass a great part of the outcome of the recent asset sale to Apache. From BP's point of view, I'd wager 500 millions to 1 Billion would be passed to the fund, and then the company would wait and see what the government actually does with that money. would we do the same, knowing how public officials spend money ?
• like Exxon, BP would be back on business sometimes in september... after all, risk management is a big part of its business, and this spill is just another risk to be managed....