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Planet Ark World Environment News BP, Anadarko Liable For U.S. Spill Damages

Date: 24-Feb-12
Author: Jonathan Stempel

BP, Anadarko Liable For U.S. Spill Damages Photo: Suzanne Plunkett
A BP logo is seen on a petrol station in London November 2, 2010.
Photo: Suzanne Plunkett

BP Plc and Anadarko Petroleum Corp are liable for civil damages under federal pollution laws over the 2010 Gulf of Mexico oil spill, a U.S. judge ruled, exposing them to billions of dollars in potential fines.

Wednesday's decision by U.S. District Judge Carl Barbier in New Orleans allows the U.S. government to pursue civil penalties at a trial he is scheduled to oversee beginning on February 27.

BP spokesman Daren Beaudo said in a statement the oil company has paid out more than $8 billion in claims, and repeated its commitment to pay "all legitimate claims" and help economic and environmental restoration along the Gulf coast.

Anadarko did not immediately respond to a request for comment.

Barbier also said Transocean Ltd may be liable for some cleanup costs, but the owner of the exploded Deepwater Horizon drilling rig called the decision a "vital win" that limited its potential liability.

In his decision, Barbier said BP and Anadarko are liable under the Clean Water Act for oil discharged beneath the water surface because they owned a respective 65 percent and 25 percent of the Macondo well that blew out.

The judge ruled that BP and Anadarko are also liable under the Oil Pollution Act for oil removal costs and damages. He said their liability under both laws is "joint and several," meaning that each could be responsible for the entire amount owed.

"Anadarko and BP were the ones directly engaged in the enterprise which caused the spill," Barbier wrote.

"If Congress envisioned that the owner of the offshore facility would have to respond to an oil spill such as this one, then it is logical that they would also be the party upon whom the civil penalty is imposed," he added.

Barbier also said Transocean may qualify under the Clean Water Act as an "operator" of an offshore facility, but there were "disputed facts" as to whether it did. He also said Transocean may be liable under the Oil Pollution Act for oil removal costs, but not the subsurface discharge of oil.

Transocean spokesman Brian Kennedy in a statement called the decision "a vital win for Transocean and for the long-term viability of the industry's operator-contractor model."

Wyn Hornbuckle, a spokesman for the U.S. Department of Justice, said that agency is reviewing the decision.

Anadarko agreed in October to pay BP $4 billion to settle claims between the companies over the spill.

In exchange, BP agreed to indemnify Anadarko for most spill-related costs, though Anadarko remained liable for its share of fines payable to the government.

The Clean Water Act lets the government seek fines of up to $1,100 per barrel of oil spilled, or $4,300 per barrel if gross negligence or willful misconduct is found.

Assuming 4.1 million barrels were spilled as the government contends, that could result in a penalty of $4.5 billion, and potentially $17.6 billion if there were gross negligence.

Barbier declined to rule that BP and Anadarko could face unlimited liability under the Oil Pollution Act, as the government requested.

The April 20, 2010 rig explosion caused 11 deaths, and led to the largest offshore oil spill in U.S. history.

BP is based in London; Anadarko in The Woodlands, Texas; and Transocean in Vernier, Switzerland.

The case is In re: Oil Spill by the Oil Rig "Deepwater Horizon" in the Gulf of Mexico, on April 20, 2010, U.S. District Court, Eastern District of Louisiana, No. 10-md-02179.

(Editing by Richard Chang and Richard Pullin)

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