BP (NYSE: BP) confirmed this morning that it is in "advanced discussions" with the Department of Justice and the Securities and Exchange Commission regarding "proposed resolutions of all US federal government criminal and SEC claims against BP in connection with the Deepwater Horizon incident."

BP said in a statement on its website that final agreement has not been reached, and even once it is, a federal court would have to approve the deal. The Washington Post and other news organizations are quoting unnamed sources as saying the BP penalty could be up to $5 billion. The AP is reporting that two BP employees face manslaughter charges in connection with the April 2010 explosion that killed 11 people and credits an unnamed person "familiar with the deal" as saying BP will plead guilty to obstruction of justice for lying to Congress about how much oil was leaking from the well.

BP said the proposed resolutions are not expected to cover federal civil claims, including Clean Water Act claims and federal and state natural resource damages claims; private civil claims; private securities claims; and state economic loss claims.

This announcement comes as a U.S. Disctrict Court judge is preparing to rule on a planned settlement of 100,000 individual and business complaints related to the Deepwater Horizon disaster.

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