Anadarko Petroleum to pay $4B to Settle all BP Claims Related to Deepwater
October 19, 2011
BP (NYSE:BP) announced that it has reached agreement with Anadarko Petroleum Company (NYSE:APC) to settle all claims between the companies related to the Deepwater Horizon accident. Anadarko, which had a 25% interest in the MC252 prospect and BP have concluded that entering into a settlement is in the best interest of the parties to resolve pending disputes. The agreement is not an admission of liability by any party regarding the accident. Under the settlement agreement, Anadarko will pay BP $4B in a single cash payment. BP will apply the payment to the $20B trust it established that is available to meet individual, business and government claims, as well as the cost of the natural resource damages. Anadarko will also transfer all of its 25 per cent interest in the MC252 lease to BP. In addition, Anadarko will no longer pursue its allegations of gross negligence with respect to BP. Anadarko and BP have agreed to work cooperatively with respect to indemnified claims, and Anadarko has the opportunity for a 12.5% participation in future recoveries from third parties or insurance proceeds cumulatively exceeding $1.5B, up to a total cap of $1B.