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BP, Anadarko Macondo Appeal Rejected by Supreme Court

The U.S. Supreme Court on Monday rejected an appeal by BP plc and Anadarko Petroleum Corp. over federal water fines related to the 2010 Macondo oil spill, which means the producers face billions in fines that could be levied any day.

The justices let stand a federal appeals court ruling issued in January that the owners of the Macondo well in the deepwater Gulf of Mexico could not avoid Clean Water Act (CWA) fines by blaming failed equipment owned by Transocean Ltd., which owned and operated the Deepwater Horizon drilling rig.

The U.S. Court of Appeals for the Fifth Circuit in January upheld by a 7-6 vote a ruling issued last year that Transocean was not liable in Anadarko Petroleum v. United States, No. 14-1167, and BP Exploration v. United States, No. 14-1217 (see Daily GPI,Jan. 12). U.S. District Court Judge Carl Barbier, who is overseeing the multi-district litigation, issued the original ruling against the producers in early 2012 (see Daily GPI, Feb. 24, 2012).

BP and Anadarko, a 25% stakeholder in the well, had argued that the massive oil spill was not caused by the blown well but by a broken riser, the underwater pipe that connected the well to the Deepwater Horizon. After the well blew out, the riser broke apart when the rig exploded and sank. BP and Anadarko had argued that only Transocean should be required to pay for CWA fines.

Based on the amount of oil estimated to have been released, BP may be fined under the CWA by up to $13.7 billion and Anadarko faces more than $1 billion in penalties. A ruling on the amount of the fine is expected any day by Barbier. If the Supreme Court had intervened, the ruling could have been delayed.

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