Anadarko Petroleum Corp. was ordered to pay almost $160 million for its role as part-owner of the doomed Gulf of Mexico well that 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 on November 30, 2015 comes after the government told U.S. District Judge Carl Barbier in New Orleans that the company should be fined more than $1 billion for its role in the well’s blowout, which killed 11 people and spewed oil for almost three months. Anadarko, which had a 25 percent stake in the Macondo well, argued it shouldn’t be required 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’s pleased the penalty is less than what the government sought and that it’s 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 posted on its website.
David Berg, a Houston attorney who has tracked the oil spill litigation and often sues polluters on behalf of municipalities, said given the damage from the spill, the fine is “not a slap on the wrist; it’s a tongue kiss from the judge.” David Uhlmann, former head of the Justice Department’s environmental crimes unit, said the fine is “too small to be an effective deterrent.” It “will not have a significant effect on a company worth approximately $30 billion,” said Uhlmann, now a University of Michigan law professor.
The professor said Anadarko wasn’t a silent partner in its dealings with BP Plc, which owned 65 percent of the well. “Anadarko urged BP to continue drilling deeper, even when BP wanted to stop,” he said. “Yet the judge refused to consider evidence of Anadarko’s risky behavior, which may explain the small size of Anadarko’s fine.”
The government case is U.S. v. BP Exploration & Production Inc., 10-cv-04536, which is part of In Re Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, MDL-2179, in U.S. District Court, Eastern District of Louisiana (New Orleans). (pdf)
See also BP gross negligence,
Excerpt from Anadarko Ordered to Pay $159.5 Million for 2010 Gulf Spill, Bloomberg Business, Nov. 30, 2015