BP Plc (BP/) said a unit of Mitsui & Co. will pay $1.065 billion to settle claims from last year’s Gulf of Mexico spill, the first payment by one of the U.K. oil producer’s partners in the failed Macondo well.
BP reached an agreement with MOEX Offshore 2007 LLC, which had a 10 percent stake in the well, covering all claims between the companies related to the spill, the London-based company said today in a statement. Mitsui said BP had claimed about $2.1 billion. BP shares rose the most since January.
“To have one, admittedly the smaller of the two partners, settling” and “joining sides is significant from the moral point of view,” David Stedman, a London-based analyst at Daiwa Securities, said by phone. “It looks on paper as a reasonably good deal for Mitsui.”
The Macondo well blowout, which killed 11 workers and caused the biggest U.S. oil spill, led to hundreds of lawsuits against BP and its partners and contractors. BP said it’s working to ensure other parties, including Anadarko Petroleum Corp. (APC), which held 25 percent in Macondo, rig owner Transocean Ltd. (RIG) and cement provider Halliburton Co. (HAL), contribute “appropriately.”
“In our view the value of the settlement should be seen as disappointing” because it’s about a half of the amount claimed by BP, Oswald Clint, a London-based analyst at Sanford C. Bernstein & Co., said in an e-mailed report. “Recent comments from Anadarko’s CEO suggested the company would be willing to reach a settlement provided all parties were involved. With Mitsui making the first step, the chances of Anadarko reaching a settlement have increased.”
BP rose 2.7 percent to 460 pence in London. The stock is down 30 percent since the accident on April 20 last year at Macondo, which also destroyed the Deepwater Horizon rig.
Mitsui has dropped 12 percent since the accident. The shares closed at 1,345 yen in Tokyo today before the settlement was announced.
The agreement with Japan’s second-largest trading house is the first payment by a company other than BP toward the cost of the disaster, which BP estimates will be more than $40 billion.
“MOEX is the first company to join BP in helping to meet our shared responsibilities in the Gulf,” BP Chief Executive Officer Bob Dudley said in a statement. “We call on the other parties involved in the Macondo well to follow the lead of the MOEX and Mitsui parties.”
BP’s indemnity excludes civil, criminal or administrative fines and penalties, claims for punitive damages, and certain other claims, today’s statement said.
Sheila Williams, a London-based spokeswoman at BP, declined to comment on talks with Anadarko.
“BP’s other partner in the Macondo license is likely to come under pressure to settle as well now,” Richard Griffith, a London-based analyst at Evolution Securities Ltd., wrote in an e-mailed report. “Critically Mitsui has joined BP in recognizing that the accident was the consequence of a number risks and actions by multiple parties.”
MOEX Offshore is a wholly owned subsidiary of MOEX USA, which in turn is wholly owned by Mitsui Oil Exploration Co., Ltd. (MOECO), in which Mitsui holds a 69.91% equity interest.
Japan’s Economy and Trade Ministry holds 20.03 percent of MOECO with the rest split between 13 Japanese companies.
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