UPDATE 5-BP gets $4 bln from Anadarko for oil spill costs
* BP shares jump 2.2 pct; Anadarko up 3.8 pctBy Tom BerginLONDON, Oct 17 (Reuters) - Anadarko Petroleum Corp
will pay BP Plc $4 billion toward clean-up of the Gulf
of Mexico oil spill, far less than BP might have won in court,
but the deal could reduce the overall cost of the disaster for
the British group.Under the settlement announced on Monday, Anadarko said it
will no longer pursue its allegations of gross negligence
against BP. Anadarko was a 25 percent partner in the doomed
Macondo well, and BP had sought payments to offset the costs of
the spill.BP shares rose 2.2 percent in London on news of the
settlement. Anadarko shares were up 3.8 percent to $73.27 in
afternoon trading on the New York Stock Exchange.”We regard it as favourable for both companies,” BP Chief
Executive Bob Dudley told reporters.Anadarko could have been on the hook for 25 percent of the
cleanup costs, compensating those affected, and paying any
government fines. It could only avoid this responsibility if it
proved that BP had been grossly negligent — something which
could, potentially, have added around $18 billion to the total
amount of fines BP faced.Anadarko would still be liable under the deal with BP for
any fines payable to the U.S. government.Fines for leaking oil into U.S waters are assessed at a
level of $1,100 per barrel, or $4,300 if gross negligence is
proven. The government has said the Macondo well leaked almost
5 million barrels into the sea.BP has said the total bill for the oil spill, including
government fines, will be $42 billion. This suggests Anadarko
could have faced a total bill well above the $4 billion it
agreed to pay.LESS LIKELYInvestors have priced in a final cost to the company from
the spill that is far above BP’s estimate. Analysts say deals
such as the one announced Monday make the worst-case scenario
— a final bill in excess of $70 billion — look less likely.”We maintain our view that the ultimate cost to BP could
fall … substantially below the cost inferred by the share
price fall since the accident,” said Richard Griffith, an oil
analyst at Evolution Securities.In May, BP agreed to accept $1.1 billion from the third
partner in Macondo, Mitsui & Co , to cover its 10
percent share of cleanup costs.BP’s lawsuits against companies it hired for the failed
drilling project are among the hundreds of claims still pending
before a federal judge in New Orleans. A trial date has been
set for February next year.To share the cost of the spill and cleanup, BP sued
Transocean , owner and operator of the sunken
Deepwater Horizon rig, cement specialist Halliburton ,
and Cameron International Corp , which designed the
blowout preventer, a device that was supposed to stop the surge
of oil.Key to forcing Transocean to meet the cleanup bill — BP
has sought the full amount from the drilling contractor — is
convincing a court that Transocean was grossly negligent.If BP does recoup cash from Transocean or Halliburton, it
will pay a portion of this — up to $1 billion to Anadarko
under the terms of the deal.Two lengthy government inquiries have laid the lion’s share
of the blame for the blowout at BP’s door.The rig blast killed 11 men and caused more than 4 million
barrels of oil from the Macondo well to spill into the sea.The case is In re: Oil Spill by the Oil Rig “Deepwater
Horizon”, U.S. District Court, Eastern District of Louisiana,
No. 2:10-md-02179.
