BP is close to a possible settlement of tens of thousands of damages claims arising from the trial over the 2010 Deepwater Horizon disaster, it emerged on Sunday afternoon when a judge agreed to postpone the trial over the accident for a week to allow more time for negotiations.
In a joint statement, BP and lawyers representing an estimated 116,000 private sector plaintiffs said they were "working to reach agreement to fairly compensate people and businesses affected by the Deepwater Horizon accident and oil spill".
The trial, which had been set to start in New Orleans on Monday morning, is now scheduled to begin in a week's time, on March 5.
However, BP and the Plaintiffs' Steering Committee, a group co-ordinating the efforts of about 90 law firms representing individuals and businesses who were victims of the spill, warned in the statement: "There can be no assurance that these discussions will lead to a settlement agreement."
One person familiar with the talks described the negotiations as "very intense". The person added that BP and the PSC had been in settlement talks for the past week and had finally made a breakthrough on Sunday morning.
Peter Hutton, analyst at RBC, said: "We see this as positive news, which should encourage increased confidence that BP is able to move on settlement, and more evidence of the supportive background we have long suggested exists to facilitate potential agreement.
"Bloomberg reports [on Monday]morning that the settlement could be around $14bn: if so ... that would be very much in line with our $13.5-billion (U.S.) assumption."
If a settlement is agreed by BP and the private plaintiffs, many other parts of the case would still be unresolved, including action against the British company and other groups brought by the US federal and state governments, action against other companies by the private plaintiffs, and disputes between the defendants.
Carl Tobias of the University of Richmond law school described the possibility of a global settlement to resolve all the outstanding litigation as "extremely remote, given the complexity of the case".
However, one deal might act as a catalyst for others.
BP has always made clear it was prepared to settle, at the right price. "Hopefully we will reach some agreements," Bob Dudley, its chief executive, told The Sunday Telegraph in the U.K. However. he also suggested the company was prepared for a trial stretching into 2014.
Plaintiffs in the case and some legal experts have suggested BP might be unwilling to fight a protracted case with the US government, given the country's importance to its plans for growth.
A central issue for BP is whether or not its staff acted with gross negligence, which could trigger a maximum penalty of $17.5-billion under the Americans' Clean Water Act. If gross negligence is not proved, the company would face a maximum penalty of about $4.5-billion.
BP has always denied gross negligence. It argues that other companies share responsibility for the spill - in particular, Transocean, which owned and operated the Deepwater Horizon rig, and Halliburton, which provided the cement that was supposed to seal the well and prevent leaks.