Andarko Named as Defendant by DOJ in Gulf Oil Spill Lawsuit

Posted in BP British Petroleum,Deepwater Horizon,Government,Gulf Coast,Maritime Law,Maritime Lawsuits,Transocean,World Maritime News on December 23, 2010

Anadarko was recently named a defendant by the US Department of Justice in the lawsuit filed pertaining to the Deepwater Horizon Gulf oil spill.

Anadarko has a 25% stake in the failed Macondo well that led to the Gulf oil spill in April 2010. The suit also names BP which was the primary operator of the Macondo well, in addition to Mitsui & Co., Triton Asset Leasing, and Transocean, as well as BP’s insurer, QBE Underwriting Ltd.

The suit alleges that the companies violated safety procedures and failed to use the best available and safest drilling technology to monitor the well’s conditions leading up to the crisis.

SeekingAlpa.com reports:

Anadarko is one of the largest independent oil and gas producers in the US with 2.3 billion barrels of oil equivalent of proven reserves. The company competes with other established oil producers like Exxon, ConocoPhillips and Chevron.

Anadarko has denied any liability in the gulf oil spill cost, contending that the blowout was due to BP’s mishandling of the well in response to “several critical warning signs.” BP, however, contends that Anadarko and Mitsui & Co., as partners in the well, should bear their share of the costs of handling the crisis. BP has billed Anadarko for $272.2 million out of the total $3.12 billion spent on cleanup costs, claims, and reimbursements to US and local governments.

The court could consider civil penalties under the Clean Water Act, which permits fines for water pollution. Potential fines could fall within a range of $1,100 to $4,300 per barrel, with the upper limit associated with a court ruling of gross negligence on behalf of the defendants.

The total oil spill amounts to an estimated 4.1 million barrels over a three-month period, meaning that the potential fine could reach a maximum of just under $18 billion. The well partners, including BP and Anadarko, could face other fines as well stemming from multiple lawsuits related to damage to property and the environment.

If the court hits Anadarko with its share of this potential fine, the charge could amount to roughly $4.5 billion.

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