BP, Mitsui reach $1 billion settlement for oil spill
BP PLC agreed to settle all claims with MOEX Offshore 2007 LLC and its affiliates, Mitsui Oil Exploration Co. Ltd. and MOEX USA Corp., regarding the Deepwater Horizon semisubmersible drilling rig accident and oil spill following the Macondo well blowout last year.
OGJ Senior Staff Writer
HOUSTON, May 20 -- BP PLC agreed to settle all claims with MOEX Offshore 2007 LLC and its affiliates, Mitsui Oil Exploration Co. Ltd. and MOEX USA Corp., regarding the Deepwater Horizon semisubmersible drilling rig accident and oil spill following the Macondo well blowout last year.
MOEX agreed to pay $1.065 billion to BP, which said it will apply the payment to the $20 billion trust it established to meet individual, business, and government claims. BP operated the deepwater Macondo well, and MOEX had 10% interest. Anadarko Petroleum Corp. held 25% interest in Macondo.
The settlement agreement cited findings by the US Presidential Commission that the accident was the result of a number of separate risk factors, oversights, and outright mistakes by multiple parties and a number of causes. Transocean Ltd. owned the Deepwater Horizon.
A fire and explosion on the Deepwater Horizon killed 11 crew members following the Apr. 20, 2010, blowout off Louisiana. The semi later sank, and a massive oil spill resulted in the Gulf of Mexico.
“The agreement is not an admission of liability by any party regarding the accident,” BP said in a news release. BP and MOEX agreed to mutual releases of claims against each other. BP agreed to indemnify MOEX for compensatory claims arising from the accident.
BP’s indemnity excludes civil, criminal, or administrative fines and penalties, claims for punitive damages, and certain other claims.
Bob Dudley, BP chief executive, said, “MOEX is the first company to join BP in helping to meet our shared responsibilities in the gulf, and Mitsui, through MOEX USA Corp., is showing great corporate citizenship. We call on the other parties involved in the Macondo well to follow the lead of the MOEX and Mitsui parties.”
FBR Capital Markets analyst Benjamin Salisbury described the settlement as slightly positive for other companies associated with the blowout.
Salisbury said MOEX’s settlement implies a lower bill for Anadarko. Transocean, and Halliburton Co., which was involved in cementing the well, were indemnified by BP.
MOEX’s 10% stake in the well could have been more than $4 billion of an estimated $41.3 billion liability for the oil spill, Salisbury said. Anadarko could have owed about $10 billion, but he said legal experts have suggested expectations tend to be closer to $2-5 billion.
Anadarko has maintained that it does not owe anything for the accident, but Anadarko Chief Executive Officer Jim Hackett has said during a conference call that Anadarko is willing to discuss a settlement under the right circumstances. According to the joint operating agreement, a dispute between BP and Anadarko would go to arbitration rather than federal court.
Earlier this year, a court-imposed deadline in a New Orleans federal court prompted a flurry of claims and counterclaims as BP filed litigation against Transocean, Halliburton, and Cameron International Corp., which manufactured the blowout preventer used on the Deepwater Horizon (OGJ, May 2, 2011, p. 40).
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