BP Recovers Gulf Oil Spill Costs from Mitsui

May 20, 2011
'We call on the other parties involved in the Macondo well to follow the lead of the MOEX and Mitsui parties,' BP's CEO said.

BP said on May 20 that it had recovered more than $1.0 billion in costs linked to last year's devastating Gulf of Mexico oil spill from a U.S. subsidiary of Japanese trading house Mitsui & Co. MOEX USA Corp.had agreed to pay BP $1.065 billion in compensation. MOEX has a 10% stake in the Macondo well project, where a leak in 2010 sparked an environmental catastrophe on the Gulf coast.

BP said that the payment from Mitsui would immediately be applied to BP's $20 billion trust set up to meet U.S. claims.

"MOEX is the first company to join BP in helping to meet our shared responsibilities in the Gulf, and Mitsui, through MOEX USA Cor., is showing great corporate citizenship in standing behind its affiliate and making a contribution to meet the costs of this tragic accident," BP group chief executive Bob Dudley said.

"We call on the other parties involved in the Macondo well to follow the lead of the MOEX and Mitsui parties," Dudley added. BP called upon a trio of companies -- Transocean, Halliburton and Anadarko -- to "contribute appropriately."

It noted that Swiss group Transocean owned and operated the Deepwater Horizon rig and that U.S. oil services group Halliburton had designed and pumped the well's cement that has been found to be a key factor of the accident.

It said U.S. energy producer Anadarko had a 2% stake in the Macondo project.

"In addition to the cash (from Mitsui), the positive of this news is that it marks a useful precedent for BP on two levels," said Peter Hutton, an analyst at Canadian investment bank RBC Capital Markets. "One, it is likely to help BP's negotiations/claims with other interest holders, notably Anadarko, and two, it is consistent with a view that charges of 'gross negligence' will be difficult to prove against BP.

"The BP statement highlights that MOEX has recognzsed the conclusions of the US Coast Guard report which indicated numerous causes by several parties," Hutton added.

In order to meet its own compensation costs and raise $30 billion by the end of 2011, BP is selling assets. On Tuesday, it announced a deal to sell a series of onshore oil fields in southern England to Anglo-French exploration company Perenco for up to $610 million. Including this deal, BP has earned more than $25 billion from asset sales since July last year.

But in a major blow to BP this week, Russian state-controlled oil giant Rosneft pulled out of a planned joint venture with the company after losing patience with protracted negotiations. The $16 billion share-swap agreement fell through after Rosneft and BP were unable to buy out the local partners in the British firm's Russian joint venture TNK-BP.

Copyright Agence France-Presse, 2011

Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!