Andarko Petroleum Corp., one of the world’s largest independent oil exploration and production companies, says that it is not going to contribute anything toward the cleanup and containment of the oil spill in the Gulf of Mexico, despite federal law, because it’s all BP’s fault.
Andarko is 25 percent partner in BP’s mile-deep Macondo well where the Deepwater Horizon rig exploded and sank in April, but the company says that BP is on its own in footing the cleanup bill, which this week topped $2 billion.
On Friday, Anadarko Chairman and Chief Executive Jim Hackett said “BP’s behavior and actions likely represent gross negligence or willful misconduct,” which could release its partners from liability in the spill-response costs if proven. The federal government has launched a criminal probe of BP to determine why the massive oil spill occurred and has vowed to hold the company responsible for all recovery costs and economic damages.
Last week, after a four-hour meeting with President Obama and Vice President Biden, BP officials announced they would establish a $20-billion escrow account to cover oil spill damages. Immediate cleanup costs would not be covered by the fund, nor would it preclude the federal government from citing BP with billions of dollars in civil penalties. Moreover, the fund will not shield the company from lawsuits being filed by coastal residents, businesses, and environmental groups that have been harmed by the toxic spill.
Many analysts predict BP’s ultimate liability could easily exceed $100 billion.
Japanese company Mitsui Oil Exploration Co. held a ten percent interest in the Deepwater Horizon / Macondo venture, leaving BP with the lion’s share of 65 percent.
U.S. Representative Edward Markey (D-Mass) said he believes that Andarko and Mitsui should be held accountable for their share because they were partners in the venture “for better or for worse.”
“So here, yes, the worst has happened,” Markey said, adding that Andarko and Mitsui “are part of the totality of the solution as well as what they hoped to be a very profitable operation.”
If BP’s partners are held partially accountable for the oil spill, the move could send a signal to the complex and interconnected global oil industry that investors should choose their partners carefully. Holding partners responsible for their share of a crisis regardless of fault would make companies more judicious of the partnerships they form and could promote better regulation and oversight amongst peers.