Anadarko to pay BP $4 billion in Gulf spill settlement

@CNNMoney October 17, 2011: 9:55 AM ET

NEW YORK (CNNMoney) -- Anadarko Petroleum Co. will pay BP $4 billion to settle claims related to the Gulf of Mexico disaster in April 2010, BP said Monday.

The explosion on the Deepwater Horizon rig killed 11 workers and fouled the Louisiana coastline and other parts of the Gulf with millions of barrels of oil -- one of the worst oil spills in history. The Gulf environment and economy were damaged, although estimated vary as to the extent.

Anadarko owned a 25% stake in the ill-fated well, and as such was responsible for a quarter of all associated costs. Anadarko (APC, Fortune 500) could have skirted those costs if it was found that BP was negligent in the events that led up to the explosion.

BP (BP) said the agreement was not an admission of liability from either party regarding the disaster. But as part of the settlement, Anadarko will no longer pursue allegations of gross negligence against BP.

"There is clear progress with parties stepping forward to meet their obligations and help fund the economic and environmental restoration of the Gulf," said BP group Chief Executive Bob Dudley."It's time for the contractors, including Transocean and Halliburton, to do the same."

The settlement also transfers Anadrako's 25% stake in the well to BP.

Japanese company Mitsui owned a 10% stake in the well, although BP was the majority shareholder and well operator.

Why the oil sands pipeline will get built

Contractors working for BP included included Halliburton (HAL, Fortune 500), which provided the cementing around the well hole that was thought to have failed, and Transocean (RIG) which owned and operated the Deepwater Horizon drill rig. The three firms remain tangled in legal disputes as a result of the spill.

BP has paid $7 billion so far in spill-related costs, including $5 billion to settle claims from at least 3,000 people affected.

The company said it will apply Anadarko's $4 billion settlement to the $20 billion trust it established to meet claims from individuals, businesses and government. To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed4.37%4.37%
15 yr fixed3.80%3.81%
5/1 ARM4.07%4.06%
30 yr refi4.38%4.38%
15 yr refi3.79%3.80%
Rate data provided
View rates in your area
Find personalized rates:
  • -->