Anadarko Petroleum Corp. must pay almost $160 million for its role as part-owner of the Deepwater Horizon incident which in 2010 caused the biggest offshore oil spill in U.S. history.
The fine was the last big uncertainty hanging over Anadarko from the disaster. The order comes after the government told U.S. District Judge Carl Barbier in New Orleans the company should faces fines more than $1 billion for its role in the well’s blowout, which killed 11 people and gushed millions of gallons of oil for almost three months.
Anadarko, which had a 25 percent stake in the Macondo well, argued it shouldn’t end up ordered to pay fines simply because it owned part of the well, as the accident wasn’t its fault. In 2014, The Woodlands, Texas-based company set aside $90 million for the case when it offered to settle for that amount.
Barbier said the fine reflected his finding that Anadarko didn’t have a role in causing the spill. Under the law, he could have imposed as much as $1,100 per barrel of oil spilled, or about $3.5 billion.
The fine is “only 4.5 percent of the maximum penalty, and therefore on the low end of the spectrum,” Barbier said in his order. “The court finds this amount strikes the appropriate balance between Anadarko’s lack of culpability and the extreme seriousness of this spill.”
Barbier rejected Anadarko’s argument that a heavy penalty could cause minority partners to seek a larger role in offshore operations, which might complicate safety and drilling decisions. “A penalty of this size might encourage non-operators to avoid investing with careless operators,” he said.
The company said it is happy the penalty is less than what the government sought and it is reviewing whether to file an appeal.
“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,” Anadarko said in a statement.
BP agreed in July to pay $5.5 billion in pollution fines as a part of a $20.8 billion settlement with the U.S. and five Gulf states. That came on top of billions of dollars already spent on response, clean-up and compensation, pushing BP to raise its budget for the spill to $55 billion.
The Macondo blowout destroyed the Deepwater Horizon drilling rig and sparked thousands of lawsuits against BP, as well as Vernier, Switzerland-based Transocean Ltd., owner of the rig, and Houston-based Halliburton Co., which provided cementing services for the project.
The U.S. sued BP and Anadarko in December 2010. Anadarko agreed the following year to pay $4 billion to London-based BP to cover its share of all public and private oil-spill damage claims, cleanup costs and damage assessments. That deal didn’t cover any pollution fines or penalties Anadarko might face.
In 2012, Barbier ruled the companies were automatically liable for civil penalties under the Clean Water Act as co-owners of the well. That decision, upheld by the U.S. Supreme Court, left both companies vulnerable to fines of $1,100 per barrel spilled.
A separate decision by Barbier in 2014 found BP was grossly negligent in causing the spill, allowed for potential pollution fines against BP to almost quadruple. To calculate the penalty, Barbier determined in January 2014 that 3.19 million barrels spilled.
Anadarko wasn’t vulnerable to the higher fines because Barbier had previously ruled it didn’t cause the accident. The judge wouldn’t allow the U.S. to argue otherwise in a trial over penalties. Fines under the Clean Water Act total $1 billion for Transocean.
The other partner in the well, Mitsui & Co.’s Moex Offshore 2007 LLC, which owned a 10 percent share, settled state and U.S. pollution law claims in 2012 for $90 million and paid BP more than $1 billion in 2011 for its share of spill costs.