BP Wants Partners to Help Shoulder Spill Cost
BP has said repeatedly that it will pay for the disastrous oil spill in the Gulf of Mexico. But its actions show that it does not intend to go it alone.Newly released documents show that on June 2, BP sent out demands for nearly $400 million to its partners in the well, the Anadarko Petroleum Corporation and the Mitsui Oil Exploration Company of Japan, or roughly 40 percent of the $1 billion BP spent in May.
The amounts demanded by BP — $272 million from Anadarko and $111 million from Mitsui — reflect the provisions of each company’s joint operating agreement with BP, which gives a share of liability equal to each company’s share of ownership.
BP owns 65 percent of the well, Anadarko owns 25 percent, and Mitsui 10 percent. The bills include costs of drilling the relief wells, responding to the spill and the reimbursements already sent to the federal government, as well as the claims BP has already paid for economic loss to people along the Gulf Coast.
BP has also sent $25 million to each of several gulf states for various costs, but it did not try to pass a share of those expenditures on to its partners.
Toby Odone, a spokesman for BP, said, “We would expect the various parties involved in this to live up to their responsibilities.”
The other companies, however, do not necessarily see their responsibilities the same way BP does. Anadarko has suggested that BP engaged in “gross negligence” and “willful misconduct” — terms that, if proved in arbitration or court, could allow it to slip the bonds of liability under its joint operating agreement with BP. A spokesman for Anadarko, John Christiansen, said he would not comment beyond the company’s previous statement, adding, “We are still assessing our contractual remedies.”
Mitsui has not struck as belligerent a pose. In a statement, the company said it was too early to draw conclusions about what happened on the rig, but “as a 10 percent minority nonoperating investor,” the company “is fully cooperating with those investigations.” It added, “Because we do not have the expertise required to fully evaluate the possible causes of the accident, we have decided to retain our own outside engineering experts to advise us on the matter.”
BP has demanded payment “30 days upon receipt,” or as early as Friday. When asked if Anadarko had mailed a check, Mr. Christiansen, the Anadarko spokesman, repeated, “We are continuing to assess our contractual remedies.”
A Mitsui spokesman said the company had until July 12 to pay, but did not say whether it would do so.
The invoices were released by the Senate Subcommittee on Federal Financial Management, Government Information, Federal Services and International Security. They were first described by the Web site TPMMuckraker. The fact that BP was reaching out to its partners for payment was reported by Dow Jones Newswires in mid-June, but the amounts were not disclosed.
The chairman of the Senate subcommittee, Senator Thomas R. Carper of Delaware, said, “We need to make sure that the taxpayer is not left on the hook for the damages associated with this disaster.” Mr. Carper, a Democrat, said the subcommittee “is focused on getting to the bottom of who owes who and what so that the communities and businesses hurt by this disaster are made whole and that the taxpayers are protected.”
A Senate aide said it was unclear from the documents whether BP was expecting the companies to pay or was simply establishing its position for later battles in arbitration or court, saying, “We can’t characterize BP’s intent.” But, the aide said, “from our perspective, it does look like a real bill,” adding, “We want to know when these parties are going to pay, and if they don’t, why they feel they shouldn’t.”
The subcommittee has invited the chief executives of Anadarko and Mitsui Oil Exploration to testify.
The subcommittee also released a June 2 “bill for U.S. government costs” from the National Pollution Funds Center of the Coast Guard, stating that the total amount due to the federal government was $70.9 million. The government sent that bill not only to BP, but also to its partners and to Transocean Holdings, the owner of the Deepwater Horizon rig and its insurer, Lloyd’s Syndicate, stating that under the Oil Pollution Act, “responsible parties and guarantors are jointly and severally liable for the costs incurred.”
Source: NY Times
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