BP agrees to pay $18.7b

British energy giant BP yesterday announced it had agreed to settle US federal and state claims worth up to $18.7 billion over the 2010 Gulf of Mexico oil spill.

"With this agreement we provide a path to closure for BP and the Gulf," said BP chairman Carl-Henric Svanberg.

The head of the US Justice Department, Attorney General Loretta Lynch, hailed what she said was a record deal.

The agreement increases the pre-tax cost of the disaster to BP by an estimated $10 billion to $53.8 billion, the company said, adding that a final figure would be released in its second quarter results due later this month.

The deal has been struck with the US federal government and five Gulf Coast states -- Alabama, Florida, Louisiana, Mississippi and Texas -- affected by the explosion on the Deepwater Horizon drilling rig.