Anadarko to pay BP $4bn in settlement
Tuesday 18 October 2011
The prospect of BP being found guilty of gross negligence over the Gulf of Mexico oil spill appeared to recede yesterday as its main partner in the offending Macondo well prospect agreed to drop all claims against it as part of a $4bn (£2.5bn) out-of-court settlement.
Anadarko Petroleum's payment ends a long-running dispute between the two parties about liability for the accident that claimed 11 lives and will see each dropping all allegations against the other.
As a 25 per cent shareholder in Macondo, Anadarko would have been liable for a quarter of the total cost of cleaning the spill, compensating those affected and paying government fines, which BP estimates will be about $42bn. However, if Anadarko could prove that BP, Macondo's operator and 65 per cent shareholder, had been grossly negligent it would not have had to pay a cent.
Andrew Whittock, an analyst at Liberium Capital, said: "This is undoubtedly good news for BP and suggests the pendulum may be swinging away from the idea that BP was grossly negligent, to a grey area where it is not at all clear cut."
Although Anadarko has dropped its claim of gross negligence against BP, the charge will lie at the centre of a hugely complex court case due to start in Louisiana in February, which will roll thousands of cases into one of the biggest "multi-district legislation" cases in US history.
Mr Whittock said that although it was up to the courts to decide the matter, the fact that Anadarko would rather pay BP $4bn now, than risk paying it about $10bn later, "suggests it believes BP may not have been grossly negligent after all and that has made me feel much more comfortable".
BP's $42bn estimate does not include a provision for gross negligence because the company refutes the allegation. If the court disagrees, BP's spill-related bill could rise by $21.5bn.
Shares in BP jumped by 2 per cent to 425.55p, as investors celebrated the receding prospect of additional "gross negligence" payouts.
Bob Dudley, BP's chief executive, said: "This settlement represents a positive resolution of a significant uncertainty and it resolves the issues among all the leaseholders of the Macondo well."
Mr Dudley also renewed his calls for Transocean, the operator of the Deepwater Horizon rig, and Halliburton, the cement contractor, to pay their share of the costs of the oil spill. BP's other partner in the Macondo oil prospect, Moex Offshore, the American unit of Japan's Mitsui Oil Exploration Co, has already settled with BP for $1bn. Jim Hackett, Anadarko's chairman and chief executive, said: "This settlement agreement with BP is the right action as it removes significant uncertainty regarding future liabilities."
In addition to the forthcoming case in Louisiana, which includes a host of claims and counter claims by the US government, individuals, businesses, consumer groups and participants in the Macondo project, BP faces a mammoth "multi-district legislation" shareholder lawsuit that includes claims and counter claims involving BP, Halliburton and Transocean.
The US Department of Justice has yet to decide whether to bring charges against BP or any of its executives.
- 3 Indonesia executions: Death row British grandmother Lindsay Sandiford will refuse to wear a blindfold when she faces firing squad
- 4 Oxygen-starved 'dead zones' with no marine life up to 100-miles long discovered in the Atlantic Ocean
- 5 How the language you speak changes your view of the world
Lucy Hawking: Stephen Hawking's daughter writes impassioned open letter to Katie Hopkins about rights of disabled people
Indonesia executions: Death row British grandmother Lindsay Sandiford will refuse to wear a blindfold when she faces firing squad
Oxygen-starved 'dead zones' with no marine life up to 100-miles long discovered in the Atlantic Ocean
How the language you speak changes your view of the world
Russian warships accused of 'chasing away' Swedish vessel to prevent Baltic States from achieving energy independence
Over 50,000 families shipped out of London boroughs in the past three years due to welfare cuts and soaring rents
EU asylum policy is 'a direct threat to our civilisation', says Nigel Farage
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: SNP and its activists 'openly racist' towards the English, Farage says
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
Schools forced to act as 'miniature welfare states' with teachers buying underwear and even haircuts for poor pupils
iJobs Money & Business
£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...
£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...
£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...
£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...