2nd UPDATE: BP -5% As Spill Cost Hits $2 Billion, Anadarko Won't Pay
June 21 2010 - 7:25AM
Dow Jones News
BP PLC (BP) shares fell as much as 5% Monday morning following a
statement late Friday indicating its partner in the leaking Gulf of
Mexico oil well, Anadarko Petroleum Corp. (APC), plans to refuse
paying its shares of escalating clean-up costs.
At 1032 GMT, BP's shares were down 15 pence, or 4.3%, at 342
pence, making it the worst-performing company in the FTSE100
index.
Anadarko Chairman and Chief Executive Jim Hackett said Friday
that "BP's behavior and actions likely represent gross negligence
or willful misconduct," which if proven could mean its partners in
the well are not liable for their share of the soaring oil spill
costs.
Anadarko has a 25% stake in Macondo. Its potential liability
would be a far greater burden for the medium-sized oil explorer
than for BP--Anadarko's first-quarter net profit was $716 million
versus $6.08 billion for BP.
Mitsui & Co. Ltd. (8031.TO) holds 10% and has yet to
comment.
BP said it strongly disagreed with Anadarko's claims and expects
its partners in the well to pay their full share of the costs.
BP Monday morning said costs for the Gulf spill response had
reached $2 billion as it continues work to contain the leak and to
pay claims for damages. To date, more than 65,000 claims have been
submitted and more than 32,000 payments made, totaling about $105
million, BP said. "It is too early to quantify other potential
costs and liabilities associated with the incident," the company
said in a statement.
BP last week struck a deal with the White House to set up a $20
billion claims fund over 3 1/2 years. The agreement initially
buoyed the company's shares, though investors are now weighing new
information on the size of the spill and potential costs to
respond.
BP faced fresh criticism Sunday from U.S. Representative Ed
Markey (D., Mass.) who revealed the company's worst-case scenario
estimate for the Deepwater Horizon oil spill was 100,000 barrels of
oil a day. The well is now estimated to be leaking between 35,000
and 60,000 barrels of oil a day into the Gulf's waters.
On Monday the London-headquartered company said it was
progressing with plans to capture more oil gushing from the well.
Two systems are now in place and on Saturday captured or burned off
just over 21,000 barrels of oil, compared with 25,000 barrels the
previous day.
A third system remains on schedule to begin first operations
around the end of June or early July.
"Plans also are being developed for further options to provide
additional containment capacity and flexibility. These projects are
currently anticipated to begin operations around mid-July," BP
said.
By mid-July, BP hopes to be able to capture 60,000 to 80,000
barrels of oil a day, the company said in a June 13 letter to the
U.S. Coast Guard.
Longer-term, BP hopes to stop the leak entirely with relief
wells, though they are not expected to be completed before early
August.
-By James Herron and Jeffrey Sparshott, Dow Jones Newswires; +44
(0)20 7842 9317; james.herron@dowjones.com
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