Late Friday Anadarko Petroleum Corp. — a 25% partner with BP plc in the disastrous Macondo well in the Gulf of Mexico (GOM) — pointed the finger directly at its London-based partner and assigned blame for the Deepwater Horizon catastrophe. BP fired back that it intends to continue doing its part, but noted that its partners also have “obligations.”
“The mounting evidence clearly demonstrates that this tragedy was preventable and the direct result of BP’s reckless decisions and actions,” said Anadarko CEO Jim Hackett. “Frankly, we are shocked by the publicly available information that has been disclosed in recent investigations and during this week’s testimony that, among other things, indicates BP operated unsafely and failed to monitor and react to several critical warning signs during the drilling of the Macondo well. BP’s behavior and actions likely represent gross negligence or willful misconduct and thus affect the obligations of the parties under the operating agreement.”
Under the terms of the joint operating agreement (JOA) related to the Mississippi Canyon block 252 lease, BP, as operator, owed duties to its co-owners including Anadarko to perform the drilling of the well in a good and workmanlike manner and to comply with all applicable laws and regulations, Anadarko said. (Mitsui Oil Exploration Co. has a 10% stake in Macondo.)
The JOA also provides that BP is responsible to its co-owners for damages caused by its gross negligence or willful misconduct. Importantly, any actions Anadarko may take under the agreement to protect its rights relative to BP’s performance as operator in the drilling of the well will in no way shift any financial burden to the American taxpayer, Anadarko said.
“We recognize that ultimately we have obligations under federal law related to the oil spill, but will look to BP to continue to pay all legitimate claims as they have repeatedly stated that they will do,” Hackett said.
At about the same time that Anadarko made its statement, Moody’s Investors Service downgraded the long-term debt rating of the company and its subsidiaries to “Ba1” from “Baa3” and placed the long-term ratings under review for possible future downgrade. “Moody’s action reflects the considerable uncertainty around Anadarko’s potential 25% share of the cleanup costs and the associated financial liabilities and fines [from the disaster],” the ratings agency said.
The operator of a well determines the detailed planning and execution of the well, and is responsible for the day-to-day activities of, and decisions executed by, personnel on the rig, Anadarko said. Consistent with standard industry practice around the world, nonoperating investors rely upon the operator to make the appropriate decisions on the rig.
“BP’s failures in the drilling of this well are not a reflection of the many tremendously skilled and committed individuals in our industry who work hard every day to deliver needed resources to America. We look forward to continuing to work with the administration and our industry to identify further enhancements to the industry’s operating procedures and practices, and to helping get the Gulf’s dedicated workers back to work soon,” Hackett said.
Approximately a half hour after Anadarko leveled its accusations, BP said it “strongly disagrees” that it was grossly negligent or engaged in willful misconduct. “These allegations will neither distract the company’s focus on stopping the leak nor alter our commitment to restore the Gulf coast,” said BP CEO Tony Hayward. “Other parties besides BP may be responsible for costs and liabilities arising from the oil spill, and we expect those parties to live up to their obligations. But how the costs and liabilities are eventually allocated between various parties will not affect our unwavering pledge to step forward in the first instance to clean up the spill and pay all legitimate claims in an efficient and fair manner.”
BP added that all the co-owners of the leasehold interest previously entered into a written operating agreement where “the parties would share the costs of operations, including the cost to clean up any spill resulting from drilling the MC252 exploratory well, according to their respective ownership interests in MC252.”
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