Anadarko Petroleum said it will pay BP $4 billion to settle claims related to the Deepwater Horizon disaster and Gulf oil spill.
In exchange BP will release its claims against Anadarko for about $6.1 billion of spill related costs to date, as well as to forgo reimbursement for any future costs.
BP also fully indemnifies Anadarko for damage claims arising under the Oil Pollution Act, claims for natural resource damages and associated damage-assessment costs, and any claims arising under the relevant Joint Operating Agreement.
Anadarko also will transfer its 25-percent stake in Mississippi Canyon block 252, site of the Macondo well, to BP.
“Though the agreement does not provide indemnification against fines and penalties, punitive damages or certain other potential claims, we do not consider these items to represent a significant financial risk to Anadarko,” said Anadarko Chairman and CEO Jim Hackett said. “This confidence stems from recent court decisions that released Anadarko from punitive damages and personal injury claims, combined with the findings of various investigations that have confirmed the company had no direct involvement in the drilling of the Macondo well.”
Anadarko will record a $4 billion liability associated with this settlement in its third-quarter 2011 financials. The payment will be funded by a combination of cash on hand and a $5 billion credit facility.
In May MOEX, a subsidiary of Japan’s Mitsui Corp. that had a 10 percent stake in Macondo, agreed to pay $1 billion to BP to settle claims. Equipment maker Weatherford agreed to pay $75 million to BP to settle any disputes.
BP has estimated the cost of capping the well, cleaning up and compensating those affected to be more than $41 billion.