UPDATE: Anadarko: Oil-Spill Law Liability Could Be Up To $1.5 Billion-$2.5 Billion

Anadarko Petroleum Corp. (APC) said Tuesday it could potentially be liable for up to $1.5 billion to $2.5 billion in environmental damages under the nation's flagship oil-spill law as a designated responsible party in the Deepwater Horizon spill.

Houston-based Anadarko, which owns a 25% stake in the Macondo project operated by BP PLC (BP), has been fighting against taking any financial responsibility for the spill, sprung in late April when Transocean Ltd.'s (RIG) Deepwater Horizon rig burned and sank. While BP has taken responsibility for the clean-up, it has also said its partners should share in the costs. Anadarko reaffirmed Tuesday that it believes the spill was the direct result of BP's actions and that its contract with BP contains a clause limiting its liability if gross negligence is demonstrated.

In a quarterly filing with the Securities and Exchange Commission, Anadarko estimated the gross liability among all parties designated responsible for environmental damages under the Oil Pollution Act at $6 billion to $10 billion, with Anadarko potentially responsible for up to a quarter of that amount, or $1.5 billion to $2.5 billion. The Oil Pollution Act was enacted after 1989's Exxon Valdez spill and is the nation's primary law divvying up responsibility after an oil spill. Dozens of lawsuits have been filed against BP, Transocean and other involved companies under the law, known as OPA, as well as several other federal and state environmental laws.

Anadarko's estimate could be larger as the company said it doesn't include potential costs associated with penalties and fines, natural-resource damages or civil litigation damages.

As a lessee in the Macondo project, Anadarko has been designated as a "responsible party" under OPA. The company said it has so far received bills from BP for a total of $1.2 billion. Anadarko has withheld payments pending the completion of various ongoing investigations into the cause of the spill.

Anadarko said it will face no liability if BP continues to pay all the costs from the spill, but if BP ceases paying 100% of the oil-spill costs, the U.S. government could seek payment from all companies involved in the joint venture, which also included a unit of Japan's Mitsui & Co. (8031.TO), and several liability provisions of the Oil Pollution act could apply.

"Under this scenario, the company estimates its maximum allocation of gross OPA-related environmental liabilities could be 25%, which is equivalent to Anadarko's working interest in the Macondo well," the company said in the filing.

The government has identified two other responsible parties, which don't own interest in the Macondo well, Anadarko said. If the oil-spill costs are shared with these parties, Anadarko could end up paying less than 25%, the company said.

Through July 13, the Coast Guard has billed a total of $222 million to all companies designated responsible for spill-related response costs incurred by it and other federal and state agencies.

The companies have each been sent identical invoices for the total costs, without any allocation of costs between or among them, Anadarko said. To date, BP has paid all Coast Guard invoices, thereby relieving the other companies, Anadarko said.

Anadarko also Tuesday posted a narrowed second-quarter loss of $40 million, or 8 cents a share, amid higher sales volumes, better cost management and wider margins, though the net result was hit by derivative impacts. Excluding these and other items, earnings came in at 49 cents a share, above the average forecast from analysts polled by Thomson Reuters for 35 cents a share. The company has so far taken no hit to its bottom line from the spill, and it repeated its position that the accident "was preventable and likely the result of the operator's gross negligence and/or willful misconduct."

Anadarko shares closed 0.2% lower at $53.14, and rose 1.6% after hours to $54.

-By Isabel Ordonez, Dow Jones Newswires; 713-547-9207; isabel.ordonez@dowjones.com

(Mark Long in New York contributed to this article.)

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