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Anadarko Fined $159.5M For Macondo-Related CWA Violations

Anadarko Petroleum Corp., a minority partner in the doomed BP plc-operated Macondo well, said it is reviewing whether to appeal a $159.5 million penalty for violating the Clean Water Act -- far less than the $1 billion-plus penalty sought by federal prosecutors.

U.S. District Judge Carl Barbier in New Orleans on Monday issued the order, which was considered the last uncertainty about Anadarko's role in the accident five years ago that killed 11 men and destroyed the Deepwater Horizon platform serving the well. The fine is not expected to have a huge financial impact on Anadarko, which already had set aside funds to pay for settlement costs.

Anadarko was a 25% stakeholder in Macondo, while Mitsui Offshore Exploration of Japan was a 10% stakeholder. Mitsui settled all of the U.S. claims in 2012 (see Daily GPI, Feb. 22, 2012). BP, 65% stakeholder and operator, was fined $5.5 billion specifically for CWA violations; it finalized a complete $20.8 billion federal accord for all violations two months ago (see Daily GPIOct. 5).

Anadarko faced a maximum penalty of about $3.5 billion, around $1,100/bbl of oil spilled. However, the producer, which is based in The Woodlands outside of Houston, did not have a role in causing the spill, Barbier wrote. The fine is 4.5% of the maximum penalty, "on the low end of the spectrum," he wrote. "The court finds this amount strikes the appropriate balance between Anadarko's lack of culpability and the extreme seriousness of this spill."

The penalty is "far less than the amount sought by the government," an Anadarko spokesman said. The ruling "clearly shows that the court gave significant weight to its previous findings that as a nonoperating investor in the Macondo well, we had no role in the events that caused the tragic 2010 spill and bear no fault."

The order "is significant because it removes the uncertainty about the extent of our potential Deepwater Horizon liability.” However, "we continue to believe that penalizing a nonoperator for events beyond its control is inconsistent with the intent of the Clean Water Act. We are carefully evaluating our appellate options."

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