Anadarko hit with US$159.5 million Macondo fine

December 1, 2015

The Louisiana US District Court ruled for Anadarko Petroleum to pay a US$159.5 million penalty for its role in the 2010 Deepwater Horizon disaster that spilled 3.19 MMbbl into the Gulf of Mexico, and left 11 people dead.

Transocean's Deepwater Horizon rig, before the incident. Image from EPA.gov.

Under the Clean Water Act, Judge Carl Barbier ruled in January 2015 that the maximum civil penalty for simple negligence would be $1100/bbl, which would have been a hefty fine of $3.509 billion. The US government wanted Anadarko to be fined more than $1 billion for its part in the incident. 

However, six factors: seriousness, economic benefit, culpability, other penalties for the same incident, prior violations, and mitigation, lead the court to determine that Anadarko only be assessed a penalty of $50/bbl or $159.5 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,” Judge Barbier said in his ruling.

Anadarko expressed its relief in the Court’s findings in a statement on its website.

“The District Court assessed a penalty of $159.5 million against our company. We are pleased that this penalty is far less than the amount sought by the government. Today’s ruling clearly shows that the Court gave significant weight to its previous findings that as a non-operating investor in the Macondo Well, we had no role in the events that caused the tragic 2010 spill, and bear no fault,” the Woodlands, Texas headquartered company said.

However, Anadarko, which had a 25% stake in the Macondo well in a non-operating capacity, is evaluating its options regarding Judge Barbier’s decision.

“While we respect the Court’s decision, we continue to believe that penalizing a non-operator for events beyond its control is inconsistent with the intent of the Clean Water Act. We are carefully evaluating our appellate options. However, today’s ruling is significant because it removes the uncertainty about the extent of our potential Deepwater Horizon liability,” Anadarko said.

In late October, Transocean, the owner of Deepwater Horizon, and the state of Alabama agreed to a $2 million settlement. BP also settled with the state earlier this year, and agreed to pay $2.3 billion, with $1.3 billion going directly to the Gulf Coast region, and $1 billion to the state of Alabama.

In early October, BP reached a $20.8 billion civil claims settlement with the US and five Gulf states: Alabama, Florida, Louisiana, Mississippi and Texas, in what the US Department of Justice said was the largest settlement with a single entity in the department’s history.

In July, BP reached an $18.7 billion settlement agreement that will be paid over an 18-year period to federal, state, the five Gulf Coast states, and more than 400 local government entities. The settlement came one week after the US Supreme Court refused to hear BP’s Deepwater Horizon appeal, with Anadarko.

Read more:

Transocean to pay US$20 million to Alabama for Macondo

US reaches US$20.8 billion Deepwater Horizon settlement

BP in US$18.7 billion Deepwater Horizon settlement

US Supreme Court rejects Deepwater Horizon appeal



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