Anadarko avoids maximum penalty for Deepwater Horizon spill

Anadarko, an independent oil and gas company based in Texas, will pay $159 million for its involvement in the Deepwater Horizon oil spill that happened in April, 2010, in the U.S. Gulf of Mexico. This was revealed in a ruling by the U.S. District Court for the Eastern District of Louisiana on Monday.

While the Macondo well at the Gulf of Mexico area where the explosion and subsequent oil spill happened, was operated by BP, Anadarko was a partner in the project, which spurred the U.S. government to seek a civil penalty against Anadarko as well, under the Clean Water Act.

The Clean Water Act prohibits the discharge of “harmful” quantities of oil into or upon covered waters of the outer continental shelf, making any entity involved in such breaches subject to a civil penalty.

At the time of the incident, Anadarko owned 25 percent in the project, with MOEX held 10 percent and BP 65 percent. As the government settled its CWA claims with MOEX and Transocean and BP, only the Clean Water Act claim against Anadarko remained at issue.

Considering that it breached the Clean Water Act as it had an ownership in a field which spilled 3.19 million barrels of oil into the ocean, largest ever spill in the U.S., Anadarko was facing a maximum penalty of $3.5 billion.

The government had urged the court to impose a fine larger than $1 billion, but substantially less that the maximum of $3.5 billion.

The court ruled that Anadarko was not culpable for the discharge, as the company was a minority shareholder in the project operated by BP.

In its ruling, the Court determined that Anadarko should pay $50 per barrel spilled, or $159.million.

“Although this amount is high when viewed out of context, it is only 4.5% of the maximum penalty, and therefore on the low end of the spectrum. The Court finds that this amount strikes the appropriate balance between Anadarko’s lack of culpability and the extreme seriousness of this spill, considering the purposes of the CWA and § 1321(b)(7)’s civil penalty.”

The court also said that the reduced penalty reflected to some extent the fact that Anadarko has already paid $4 billion to BP to settle compensatory claims arising from the spill.

Offshore Energy Today Staff

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