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 BP PLC said Thursday that MOEX Offshore 2007 LLC, which had a 10
percent interest in the Macondo well, has agreed to pay $1.065
billion to settle all claims between the companies over the accident
on the Deepwater Horizon rig.
Under the settlement, MOEX, a unit of Japanese trading house Mitsui
& Co., agreed to recognize findings by the U.S. Presidential
Commission that the accident "was the result of a number of separate
risk factors, oversights and outright mistakes by multiple parties
and a number of causes."
It also recognized findings from the U.S. Coast Guard that "the
safety management systems of both Transocean and its Deepwater
Horizon rig had significant deficiencies that rendered them
ineffective in preventing the accident."
Shares in BP rose 4.1 percent to 466 pence ($7.57) as analysts said
the deal puts pressure on BP's other minority partner, Anadarko, to
reach a similar deal and leaves rig operator Transocean open to a
combined assault for compensation.
Evolution Securities analyst Richard Griffith said success on those
fronts would reduce his estimate of BP's total liabilities, which
currently stands at $25-30 billion.
"Critically Mitsui has joined BP in recognising that the accident
was the consequence of a number of risks and actions by multiple
parties," said Griffith. "Perhaps more significantly is the broader
recognition that Transocean's safety management systems on the rig
were deficient and where this could lead BP and its licence partners
to pursue Transocean for compensation thus reducing the overall size
of the liability net to BP."
Jonathan Jackson, head of equities, Killik & Co., said he was
"slightly disappointed" by the size of the settlement, but the news
was positive.
"It is the first time that a company involved in the well has joined
BP in helping to meet the cost of the accident and it appears to
reinforce the likelihood that BP will not be found grossly
negligent, an outcome that would bring a much larger liability under
the Clean Water Act," Jackson said.
He added that BP might reach a global settlement which rolls up into
a single deal the liability for fines, damages and other penalties.
BP said Friday that it would continue to pursue Texas-based
Anadarko, which had a 25 percent interest in the well,
Switzerland-based Transocean and cement contractor Halliburton to
pay their share of billions of dollars in cleanup costs, oil-spill
damages and pollution fines.
MOEX has also filed cross-claims against Transocean and Halliburton,
which BP noted Friday "designed and pumped the unstable cement that
the Presidential Commission found was a key cause of the accident."
BP has already booked a $32.2 billion charge to cover the long-term
costs of the Gulf spill. It is targeting $30 billion in asset sales
by the end of the year to shore up funds.
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 BP Chief Executive Bob Dudley said that Mitsui "is showing great
corporate citizenship in standing behind its affiliate and making a
contribution to meet the costs of this tragic accident.
"We call on the other parties involved in the Macondo well to follow
the lead of the MOEX and Mitsui parties," he added in a statement. The settlement from MOEX will immediately be paid into the $20
billion trust BP has established to meet individual, business and
government claims relating to last year's oil spill.
MOEX had filed a lawsuit in New Orleans on the April 20 anniversary
of the Gulf spill, asking a federal judge to declare it was not
responsible for the damages and cleanup costs resulting from the
worst off-shore oil spill in U.S. history. MOEX was joined by
Anadarko in suing BP, with both companies claiming that London-based
BP was responsible for the blow-out and the spill.
BP said that the payment from MOEX announced Friday -- to be paid by
its parent company, MOEX USA Corp. -- was not an admission of
liability by any party regarding the accident. The companies agreed
to drop mutual claims against each other.
The news of the settlement coincided with a report from London-based
financial services group Investec calling on BP's board to demerge
the company into three separate groups -- focused on the United
States, Britain and emerging countries.
Investec noted that BP has underperformed the market by 14 percent
in dollar terms and is down 5 percent on the year to date.
"BP's business model is broken, in our view," Investec analysts
Stuart Joyner and Angus McPhail said in a note. "However, we think
it could regain its reputation as the industry thought leader by
splitting the company in three."
The pair suggested a U.S. unit listed in New York containing BP's
U.S. refining and gas exploration & production businesses. A
separate exploration & production business could be listed in London
focusing on Britain and mature markets, the analysts said, with a
high-growth unit targeting developing countries listed in London and
Mumbai/Hong Kong.
[Associated
Press; By JANE WARDELL]
Copyright 2011 The Associated Press. All rights reserved. This
material may not be published, broadcast, rewritten or
redistributed.
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