BP, Anadarko Settle Gulf Claims

Monday, October 17, 2011 @ 05:10 PM gHale

There is no doubt the battle over who should pay what will continue in courts for years over the BP Gulf of Mexico disaster.

But one area that seems settled Anadarko Petroleum Co. agreed to pay $4 billion to BP PLC as part of a settlement related to last year’s oil spill.

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BP said Anadarko’s payment will form part of the British company’s $20 billion trust fund, which has paid out $7 billion so far to settle claims from individuals and businesses. Eleven workers were killed when the Deepwater Horizon rig when the Macondo well exploded in the Gulf off the Louisiana shore April 20, 2010, causing the largest oil spill in U.S. history.

BP has now reached settlements with both of its partners in the Macondo well.

However, it is still embroiled in lawsuits and countersuits with Transocean Ltd., operator of the Deepwater Horizon drilling rig, and Halliburton Co., which was responsible for cementing the well. The suits will go to trial in New Orleans in February.

BP also faces the prospect of fines in the tens of billions of dollars.

BP has made provisions for up to $42 billion in costs from the blowout, and it has embarked on raising $30 billion by selling assets.

Anadarko, based in The Woodlands, Texas, is handing over its 25 percent stake in the well to BP as part of the settlement.

The agreement also gives Anadarko a potential share in funds which BP recovers from third parties or insurance. If BP’s total recovery exceeds $1.5 billion, Anadarko would get 12.5 percent of the excess, or up to $1 billion, BP said.

“This settlement agreement with BP is the right action for our stakeholders, as it removes significant uncertainty regarding future liabilities and associated risks,” said Jim Hackett, chairman and chief executive of Anadarko.

“This settlement represents a positive resolution of a significant uncertainty and it resolves the issues among all the leaseholders of the Macondo well,” said BP Chief Executive Bob Dudley.

“There is clear progress with parties stepping forward to meet their obligations and help fund the economic and environmental restoration of the Gulf,” Dudley said. “It’s time for the contractors, including Transocean and Halliburton, to do the same.”

In May, BP announced a settlement with the other partner in the well, MOEX Offshore 2007 LLC, which owned 10 percent it. That company agreed to pay BP $1 billion.

Weatherford International Inc., a contractor based in Switzerland, also agreed in June to pay $75 million to the trust fund to settle claims between it and BP. Weatherford manufactured the float collar, designed to help contain cement, used in the blown-out well.

U.S. regulators last week cited BP PLC, Transocean Lld. and Halliburton for safety and environmental violations stemming from last year’s rig explosion and massive Gulf oil spill.

The companies have 60 days to appeal the citations issued by the U.S. Interior Department’s Bureau of Safety and Environmental Enforcement.

A report issued last month by the panel of government investigators laid ultimate responsibility on BP for the disaster, which spewed roughly 200 million gallons (750 million liters) of oil into the Gulf.

BP ignored crucial warnings and made bad decisions during the cementing of the well, but Transocean and Halliburton shared some of the blame, the report concluded.

In its asset disposal program, BP has announced at least 15 sales including:
• Its 60 percent stake in Argentina-based oil and gas producer Pan American Energy to Bridas Corp. of Argentina for $7 billion.
• A bundle of onshore gas assets to Apache Corp. for $7.1 billion.
• Its oil and gas exploration business in Colombia for $1.9 billion to Ecopetrol of Colombia and Talisman of Canada.
• Energy assets in Venezuela and Vietnam to its Russian joint venture TNK-BP for $1.8 billion.

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