Anadarko Refuses to Pay Costs of Deepwater Horizon Oil Spill
HOUSTON, Texas, June 18, 2010 (ENS) – Today BP reiterated its pledge to clean up the Deepwater Horizon oil spill in the Gulf of Mexico and to pay “all legitimate claims” arising from the spill, even though another part owner of the oil leasehold prospect is disputing its responsibility for costs associated with the incident.
Anadarko Petroleum Corporation today refused to accept responsibility for oil spill removal costs and damages
Anadarko Chairman and CEO Jim Hackett said that following this week’s congressional hearings regarding the spill, “The mounting evidence clearly demonstrates that this tragedy was preventable and the direct result of BP’s reckless decisions and actions.”
Anadarko Chairman and CEO Jim Hackett (Photo courtesy Texas Business Hall of Fame)
“Frankly,” said Hackett, “we are shocked by the publicly available information that has been disclosed in recent investigations and during this week’s testimony that, among other things, indicates BP operated unsafely and failed to monitor and react to several critical warning signs during the drilling of the Macondo well. BP’s behavior and actions likely represent gross negligence or willful misconduct and thus affect the obligations of the parties under the operating agreement.”
BP said in a statement today that the company “strongly disagrees” with these allegations and will not allow the allegations to diminish its commitment to the Gulf Coast region.
“These allegations will neither distract the company’s focus on stopping the leak nor alter our commitment to restore the Gulf coast,” said BP chief executive Tony Hayward, who was today replaced as point man on the oil spill by BP Managing Director Bob Dudley.
Formally known as the Macondo prospect, the damaged well is located on Mississippi Canyon Block 252 in the Gulf of Mexico in a water depth of 5,000 feet.
BP serves as the operator, holding a 65 percent interest in the leasehold prospect and Anadarko holds 25 percent. The remaining 10 percent is owned by MOEX Offshore 2007, a wholly-owned subsidiary of Japan’s Mitsui Oil Exploration Ltd.
On April 20, the Deepwater Horizon oil rig leased by BP exploded and caught fire when the test well had been completed, but not capped. The rig sank on April 22, leaving the damaged wellhead spilling crude oil into the Gulf of Mexico at a rate now estimated as at least 35,000 barrels per day. Eleven crewmembers died in the incident and 17 others were injured.
The oil has fouled coastlines in four states – Louisiana, Alabama, Mississippi and Florida, and has caused the fisheries closure of about one-third of the gulf.
Hayward said, “Other parties besides BP may be responsible for costs and liabilities arising from the oil spill, and we expect those parties to live up to their obligations. But how the costs and liabilities are eventually allocated between various parties will not affect our unwavering pledge to step forward in the first instance to clean up the spill and pay all legitimate claims in an efficient and fair manner.”
Hackett also said, “We recognize that ultimately we have obligations under federal law related to the oil spill, but will look to BP to continue to pay all legitimate claims as they have repeatedly stated that they will do.”
The operator of a well determines the detailed planning and execution of the well, and is responsible for the day-to-day activities of, and decisions executed by, personnel on the rig. Consistent with standard industry practice around the world, non-operating investors rely upon the operator to make the appropriate decisions on the rig.
“BP, as operator, owed duties to its co-owners, including Anadarko, to perform the drilling of the well in a good and workmanlike manner and to comply with all applicable laws and regulations,” said Hackett.
“Importantly,” Hackett said, “any actions Anadarko may take under the agreement to protect its rights relative to BP’s performance as operator in the drilling of the well will in no way shift any financial burden to the American taxpayer.”
Hayward said that all three co-owners of the leasehold interest had previously entered into a written joint operating agreement under which BP Exploration & Production Inc. would act as operator and be responsible for conducting operations, but that the parties would share the costs of operations, including the cost to clean up any spill resulting from drilling the exploratory well, according to their respective ownership interests in the lease.
Further, Hayward pointed out, all the co-owners of the leasehold interest filed documents with the U.S. federal government certifying that “each would be jointly and severally liable, together with any other responsible parties, for oil spill removal costs and damages in accordance with the Oil Pollution Act of 1990.”
Anadarko also announced today that it will donate to charitable and civic agencies along the Gulf coast any revenue it is entitled to receive from oil recovered from the cleanup efforts.
“We hope donating these proceeds to the people of the Gulf Coast will help offset some of the hardships being experienced in so many ways by those living in the affected communities,” said Hackett. “We are saddened by the loss of lives that occurred in this accident and the livelihoods that have been damaged by the spill.”