NEW YORK - BP's multibillion-dollar settlement deal with people and businesses harmed by its 2010 oil spill removes some uncertainty about the potential financial damages it faces. It also may help the company restore its all-important relationship with the federal government.

Although the company still has a few major legal and financial hurdles to overcome nearly two years after the spill in the Gulf of Mexico, the tentative settlement with plaintiff's lawyers sends important signals to investors, Gulf Coast states and federal regulators.

Where once it seemed conceivable that BP's spill-related costs could reach $200 billion, lawyers and industry analysts now say that figure will likely be less than a quarter that amount. If the class-action lawsuit by victims had gone to trial, BP could have faced much higher costs.

Another important element of the settlement deal - which BP estimates will cost $7.8 billion - is that it shows a willingness to pay a huge sum in order to resolve issues related to the spill.

That may improve its standing with the federal government, which controls access to oil reserves that are critically important to BP's future.

"The only trial I thought we would see in this case is the one that just went away," said David Uhlmann, a University of Michigan law professor who once headed the Justice Department's environmental crimes section.

The blowout of the Macondo well in April 2010 destroyed a drilling rig called the Deepwater Horizon. That killed 11 workers, spilled an estimated 200 million gallons of oil and disrupted thousands of Gulf Coast lives and businesses. The spill soiled sensitive tidal estuaries and beaches, killed wildlife and closed vast areas of the Gulf to commercial fishing.

The settlement agreement announced Friday would apply to tens of thousands of victims across the Gulf Coast but does not resolve lawsuits with federal, state and local governments or address environmental damage. Those other claims could total up to $25 billion.

The settlement with the victims still needs approval of a federal court in New Orleans overseeing the case.

BP expects the settlement to be paid out of the remainder of a trust that the company had established to pay these types of claims. The trust now has $9.5 billion in assets left out of an initial $20 billion. Whatever remains in the trust after claims are paid out would return to BP.

BP, which is based in London, says it will not have to increase the total of $37.2 billion it has set aside to fund the trust and pay for other spill costs. Although some analysts expect BP to have to pay more eventually, the total would be much less than initially feared.

The settlement does not fully resolve the claims by the businesses and people covered by the settlement or put a final cost on them. The settlement creates a new fund that will pay all claims, but the total amount is not capped. It could ultimately add up to more or less than what BP estimates.

Also, individual victims are not required to accept it and could choose to bring separate cases.

Some Gulf Coast residents have not been satisfied with the claims process under the trust fund and are hoping the settlement makes it easier to receive compensation.

Clara Gerica, a 59-year-old shrimp vendor at a downtown farmers' market in New Orleans, said she and her husband, a commercial fisherman, had not been compensated even though they filed claims with the fund.

If the new process isn't any better, she said: "I'm going to put up a fight."

Tony Buzbee, a Houston-based attorney who represents people and businesses with roughly 12,000 spill claims, questioned whether the settlement will be more beneficial to his clients than the existing fund.

"There better be a golden nugget in there," Buzbee said. "Otherwise, this smells. It doesn't benefit my clients any."

Still, BP's willingness to agree to a settlement with no cap will help it in future settlement talks with states and the federal government, experts say.

BP is facing Clean Water Act fines of $5.4 billion to $21.1 billion, depending on whether BP is judged to have been grossly negligent in its design, construction and operation of the well.

Eric Schaeffer, who investigated oil spills for the Environmental Protection Agency as a former head of civil enforcement, said that a settlement could reduce those charges by half.

The proposed settlement announced Friday could also help BP work with the government in the future as it drills for oil in the federally controlled waters in the Gulf, one of the most important drilling regions in the world for BP. It's especially important for BP because its reputation was already tarnished from other recent environmental disasters, including a Texas City refinery fire in 2005 that killed 15 people and pipeline spills in 2006, 2009 and 2011 in Alaska.

"If the government doesn't have confidence in the company because of their track record, it's going to look harder for a reason to reject their permit," Schaeffer said.

In the wake of the disaster, BP was forced to cut its dividend, issue debt and begin selling off assets to raise money to pay for the spill. So far, it has sold $21 billion worth of oil fields, refineries and chemical plants on four continents, and it is trying to sell assets worth another $17 billion.

BP chief executive Tony Hayward was forced to step down in the fall of 2010 after making a series of gaffes during the spill. BP's attempts to create an environmentally friendly image were crushed, and independent gas station owners with BP-branded stations lost business from customers who were upset over the spill.

The company's share price of $47.50 is still 21 percent below its $60.48 close before the spill on April 20, 2010. The well was finally capped on July 15 of that year.

Despite the spill and the legal and financial setbacks that followed, BP remains one of the world's biggest and most profitable companies. It is the fourth largest investor-owned oil company. BP earned $27.5 billion in 2011 on revenue of $376 billion, helped by historically high oil prices that have padded the profits of all oil producers. Its shares have almost doubled from their low of $27.05 on June 25, when the well was still spewing oil and a series of efforts to plug the well had failed.

BP CEO Bob Dudley said in a statement that the settlement "represents significant progress toward resolving issues" from the disaster.

At times during the summer of 2010, BP's survival as a company was questioned. Goldman Sachs had estimated the spill costs could reach $200 billion.

BP took a charge of $40.9 billion to cover the costs of the spill in 2010. The company has received four payments from partners in the project, including $4 billion from minority owner Anadarko Petroleum and $250 million from Cameron International Corp, which made the blowout preventer that failed to prevent the spill. These settlements and other adjustments brought BP's total write-off to $37.2 billion.

The company has paid out $26.6 billion in claims and to contributions to the victims' trust fund, and it must pay $4.9 billion more into the trust to fully fund it. That leaves the company with $5.7 billion to pay fines and other penalties from states, the federal government and others. That would be enough to cover federal environmental fines only if BP pays the minimum fines of $1,100 per barrel of oil spilled or reaches a favorable settlement with states and the federal government.

Phil Weiss, an analyst at Argus Research said he expects BP to have to pay more than that.

BP is suing Transocean, which owned the Deepwater Horizon rig and Halliburton, the contractor hired by BP to cement the Macondo well to help pay for the cost of the cleanup. Weiss does not expect BP to win much, though.

Fadel Gheit, an analyst at Oppenheimer & Co., said that by agreeing to a substantial settlement with individuals and businesses, BP is proving it is willing to pay whatever it needs to try to put the oil spill behind it.

"They have been telling the government: 'We'll do whatever it takes. We're just going to pay and get this over with. We want to be back in business,'" Gheit said.