Anadarko to Pay BP $4 Billion to Settle Macondo Dispute

October 18, 2011
Anadarko Petroleum Corp. and BP reached an agreement to settle all of BP's current and future claims against Anadarko in regards to the GoM’s Deepwater Horizon incident in April 2010. Under the terms of the settlement agreement, Anadarko agrees to pay $4.0 billion to BP, and both parties have agreed to mutually release claims against each other.

As part of this agreement, BP will release its claims against Anadarko for approximately $6.1 billion of outstanding invoices received to date, as well as to forego reimbursement for any future costs related to the event. In addition, BP will fully indemnify Anadarko for damage claims arising under the Oil Pollution Act, claims for natural resource damages and associated damage-assessment costs, and any claims arising under the relevant Joint Operating Agreement. Anadarko also will transfer its 25% interest in Mississippi Canyon block 252 (Macondo) to BP.

"This settlement agreement with BP is the right action for our stakeholders, as it removes significant uncertainty regarding future liabilities and associated risks," Anadarko chairman and CEO Jim Hackett said. "With this issue resolved, we believe focus will return to the tremendous value embedded in our asset base and the company's operational and exploration success that have been under-valued during the last 18 months. Importantly, BP has committed to use the funds to pay the claims of individuals and entities affected by the Deepwater Horizon event."

According to its public filings, BP has recorded a charge in excess of $40 billion for total estimated costs associated with the event. To date, BP has invoiced Anadarko an aggregate of $6.1 billion for what BP considers to be Anadarko's 25% proportionate share of BP's actual and near-term costs.

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