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Anadarko: BP-Mitsui Settlement a 'Positive Step'

Anadarko Petroleum Corp., a 25% nonoperating partner in the Macondo deepwater well, views a settlement between operator BP plc with a unit of 10% stakeholder Mitsui Ltd. as a step in the right direction, a spokesman said Friday.

Following the Deepwater Horizon disaster Anadarko and Mitsui's MOEX Offshore LLC unit filed a lawsuit against BP, the Macondo well majority stakeholder and well operator, in federal court claiming economic losses from the disaster. They requested a court declaration that the were not responsible for damages and cleanup costs.

Liability for the oil spill tragedy, which destroyed the Deepwater Horizon drilling platform and claimed 11 lives, has been estimated at more than $41 billion. BP held a 65% interest.

However, on Friday MOEX, which said it had been billed $2.1 billion by BP for its share of the costs, agreed to pay BP nearly $1.07 billion for Macondo-related damages. The settlement is to be included in the $20 billion trust established by BP to meet future claims and associated clean-up costs.

"MOEX is the first company to join BP in helping to meet our shared responsibilities in the Gulf," said BP CEO Bob Dudley. "We call on the other parties involved in the Macondo well to follow the lead of the MOEX and Mitsui parties."

The agreement with MOEX isn't an admission of liability by any party regarding the accident, according to BP. However, MOEX still faces separate civil penalties resulting from the incident, Mitsui said.

The BP "has significantly limited its exposure in this case -- and consequently reduced the risk and uncertainty for shareholders," Mitsui said in a statement.

Anadarko views "BP's willingness to reach a settlement with MOEX as a positive step," spokesman John Christiansen told NGI on Friday.

According to Anadarko, BP had invoiced the company $4.7 billion for oil spill-related costs. During a conference call with financial analysts earlier this month Anadarko CEO Jim Hackett said the company continued to "stand by earlier statements...supported by all of the investigations" (see Daily GPI, May 4).

"We don't think we owe anything...We also know that investors would like us to consider some sort of approach that's a compromise..." Hackett then said Anadarko "might be interested in settling" the dispute.

"We understand where the stockholders are at...We feel strongly about this, but we are prepared to come to the table under the right circumstances...if that's the remedy in the contract."

Asked whether Anadarko still was willing to negotiate a settlement, Christiansen told NGI "we have stated before that we are open to a dialogue with the operator, though any discussions would be, of course, confidential."

FBR Capital Markets analyst Benjamin Salisbury said Friday the MOEX settlement "implies a lower bill for Anadarko. If the company were to pay a similar 25% of their expected potential liability, Anadarko's contribution would be roughly $2.75 billion."

Salisbury said the news also was "slightly positive" for Transocean, which owned and operated the Deepwater Horizon drilling rig, and for Halliburton, the oilfield services contractor.

"Transocean and Halliburton were indemnified by BP and hold ostensibly no liability," said Salisbury. "However, the lower settlement could imply a lower than feared total cost for the spill for BP and thus be seen as incrementally favorable to all involved."

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