WASHINGTON, D.C. - BP Plc has agreed to provide $1 billion for projects in the Gulf of Mexico to restore natural resources damaged by last year's oil spill, the company and the U.S. Justice Department said on Thursday.
The department said the agreement, the largest ever of its kind, represented a first step in fulfilling BP's obligation to fund a complete restoration of harmed public resources, such as rebuilding coastal marshes and replenishing damaged beaches.
Other initial projects to be funded will restore barrier islands and wetlands and conserve areas for ocean habitat.
The deal came a day after the one-year anniversary of the worst offshore oil spill in U.S. history, which started when an explosion aboard the Deepwater Horizon drilling rig killed 11 workers and released nearly 5 million barrels of oil that fouled the shorelines of four U.S. Gulf Coast states.
The department said the agreement does not affect BP's ultimate liability or any other company for environmental damages, but allowed restoration projects to get started sooner.
BP has estimated the full cost of the disaster at $42 billion, and on Thursday sued three of its well partners for damages — Transocean Ltd, Halliburton Co and Cameron International Corp.
BP said the agreement will accelerate work starting this year to restore areas harmed by the spill.
"Our voluntary commitment to that process is the best way to get restoration projects moving as soon as possible," said Lamar McKay, chairman and president of BP America Inc.
The states of Florida, Alabama, Mississippi, Louisiana and Texas each will select and implement $100 million in projects while the rest of the money will be used for projects picked by the federal government or by trustees for the oil spill, the Justice Department said.
BP said the agreement will have the effect of speeding up restoration work that would have been delayed for several years while a complete assessment of the damage continued.
It said more than 100 studies are under way to evaluate potential harm to Gulf wildlife and habitat. The agreement will focus on projects that can start this year and in 2012.
(Reporting by James Vicini, Jeremy Pelofsky and Chris Baltimore; Editing by Will Dunham)