Washington, 22 July (Argus) — Lawmakers took US independent Anadarko and Japan's Mitsui to task today for failing to provide or set aside funds to cover costs related to the explosion and subsequent oil spill at the BP-operated Macondo well in the deepwater Gulf of Mexico.
During at hearing before the US Senate subcommittee on Federal Financial Management, Government Information, Federal Services and International Security, sharp rebukes for not contributing financially to the oil spill clean up or claims process came from senators John McCain (R-Arizona) and Claire McCaskill (D-Missouri).
“You haven't paid anything, and you haven't even put any money aside...it's pretty clear what you're going to do is litigate,” McCain said. He noted that both companies have been designated by the federal government as responsible parties, and that they will have to prove that they are not to avoid having to cover a share of costs.
Neither Anadarko nor Mitsui – which hold 25pc and 10pc stakes in the Macondo well, respectively – have set aside funds to help cover costs related to the spill, while BP has committed $20bn to an escrow account to cover government and non-government claims. Neither of the partner firms has provided payment to settle bills sent by BP or the federal government.
McCaskill suggested the Anadarko's and Mitsui's decisions not to set aside funds in the event that they might eventually have to cover some costs runs the risk of sacrificing company reputation for legal concerns. “You look like you're not stepping up. It looks like you're not taking responsibility,” she said.
Neither company has responded to invoices for cleanup costs from the federal government, according to subcommittee chair Tom Carper (D-Delaware). Mitsui Oil Exploration Offshore president Naoki Ishii denied recollection of having received any such bills, while Anadarko chief executive Jim Hackett said up front costs are generally borne by the primary stakeholder, and cost sharing among stakeholders is worked out after the fact. “It is the government's practice to obtain recovery from the primary responsible party, in this case BP, and leave the allocation of that payment to the parties involved,” Hackett said.
Both companies have refused to pay bills from BP, with the most recent totaling $900mn to Anadarko and $450mn to Mitsui, according to Carper. Anadarko said available information suggests BP was grossly negligent in its operatorship of the well, which would absolve non-operating interest holders of financial liability under the joint operating agreement. The company based this conclusion on information made publicly available in a letter from congressmen Henry Waxman (D-California) and Bart Stupak (D-Michigan) to BP chief executive Tony Hayward in June.
Both firms deny all responsibility for the 20 April rig explosion that led to the ongoing oil spill. “Non-operating investors rely upon the operator to make the appropriate decisions affecting all operations on the rig,” Hackett said.
The Macondo well was Mitsui's first project in the US Gulf of Mexico, and the firm “placed confidence in BP's expertise and experience in drilling deepwater wells in the Gulf,” Ishii said. “Offshore had no right or ability under the parties' contracts to alter the drilling plan, and further, Offshore was not aware of any reason to doubt the sufficiency or competency of the drilling plan.”
Both companies said they will meet financial obligations for which they are found legally liable.
Send comments to feedback@argusmedia.com
ci/ljc 2.0
If you would like to review other ArgusMedia.com content options, request more information about Argus' energy news, data and analysis services.
Copyright © 2010 Argus Media Ltd - www.ArgusMedia.com - All rights reserved.