Judge ruling on Anadarko liability may move settlement talks

Anadarko’s incentive to settle with the federal government likely increased with Wednesday’s court decision finding it liable for the Deepwater Horizon accident as a partial owner of BP’s Macondo Well.

U.S. District Judge Carl Barbier ruled that Anadarko and BP are both liable under the Clean Water Act for oil pollution resulting from the April 20, 2010 explosion and oil spill. The act sets fines up to  $1,100 per barrel spilled through negligence, or $5.5 billion based on the federal estimate that about 5 million barrels of crude gushed into the Gulf before the blown-out well was capped.

The fine can rise significantly with a finding of gross negligence.

Barbier is scheduled to begin  trial Monday in a case combining multiple government, corporate and individual lawsuits, after which he will apportion liability for the disaster.

In his ruling Wednesday, he put off until he hears evidence a decision on whether Transocean, which owned and operated the Deepwater Horizon drilling rig, was an operator of the well and therefore also liable for Clean Water Act penalties.

Barbier’s decision that Anadarko does share liability was a pre-trial summary judgment, meaning that the fact of Anarako’s co-ownership of the well was undisputed and he could apply appropriate law to that fact.

An analyst said the decision may speed up a settlement between Anadarko and the federal government, especially in light of the government’s settlement last week with Mitsui, the third Macondo co-owner. Mitsui paid $90 million – roughly $180 per barrel – to the U.S. and five states for violating the Clean Water Act.

“If I were Anadarko, I would be happy to settle on the $180 dollar per barrel precedent,” said Robert Kessler, an analyst with Tudor Pickering, who calculated Anadarko’s potential fine on the basis of its share of ownership. “That would seem to work out to $225 million. If I am an Anadarko attorney, there is no real distinction between myself and Mitsui, who also had a non-operating interest in the well. Anadarko already agreed to settle with BP at $4 billion, so $225 million is a relatively small item to remove what has the potential to be very large fines. The Mitsui precedent for Anadarko is very reasonable.”

BP, by contrast, could still face liability for gross negligence as the owner with operating interest in the Macondo well.

BP’s ownership share in the Macondo well was 65 percent, Andarko’s was 25 percent and Mitsui’s was 10 percent.

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