July 22 (Bloomberg) -- Anadarko Petroleum Corp., the Texas oil company that owns a stake in BP Plc’s damaged well, said it plans to meet with its partners on the project to try to settle a dispute over spill-related costs without going to court.
Chief Executive Officer Jim Hackett said he expects “productive meetings” with BP to occur at the appropriate time, according to testimony prepared for a Senate subcommittee hearing today. MOEX Offshore 2007 LLC, a third partner, also would be part of the discussions, Anadarko’s Hackett said.
An explosion struck the Macondo well in the Gulf of Mexico on April 20, triggering the worst oil spill in U.S. history. BP operated the project with a 65 percent interest, while Anadarko has 25 percent and MOEX Offshore, a unit of Japan’s Mitsui Oil Exploration Co., the remaining 10 percent. Anadarko on June 18 said BP’s actions caused the spill, and both Anadarko and MOEX Offshore have said they are withholding payments of spill costs.
“Under the joint operating agreement, no party is required to pay any costs or damages to the operator to the extent that they are incurred as a result of the operator’s gross negligence or willful misconduct,” Hackett said in his testimony.
BP has said responsible parties should live up to their obligations and that it’s evaluating its options. An agreement among the partners calls for arbitration to resolve the disagreement. Fadel Gheit, an analyst with Oppenheimer & Co. in New York, has estimated that spill costs may reach $60 billion.
Naoki Ishii, president of MOEX Offshore, and Kenneth Feinberg, administrator of a Gulf claims fund, also are scheduled to speak today before the Senate Subcommittee on Federal Financial Management, Government Information, Federal Services and International Security.
Ishii said in prepared testimony that government approvals for BP’s drilling plan were in place and operations had started when MOEX Offshore invested in the project.
“Offshore placed confidence in BP’s expertise and experience in drilling deep-water wells in the Gulf,” Ishii said, adding that his company had no reason to doubt the “sufficiency or competency” of the plan. He said MOEX Offshore didn’t seek to influence BP’s operational decisions.
A MOEX Offshore spokesman previously said the company was reviewing BP’s claims and was withholding reimbursements except for those unrelated to the spill.
Ishii said MOEX Offshore is relinquishing its right to oil captured from the well, and Anadarko has said it would donate to charities and civic groups any revenue it’s entitled to from clean-up efforts.
Anadarko, based in The Woodlands, Texas, is committed to meeting its obligations under the Oil Pollution Act, Hackett said. He said the company agreed, in a letter sent to the Justice Department, to provide advance notice of substantial cash or asset transfers from Anadarko that aren’t part of the ordinary course of business.
Hackett said he agrees with the government approach of dealing with BP as the primary responsible party and expects that company to continue to honor its commitment to pay all legitimate claims.
The operator of a well sets the planning and execution and is responsible for day-to-day activities, Hackett said. “I am sure you agree that it would be impractical to drill a well by committee,” he said.
Hackett said non-operating investors received operational updates, budget documents and drilling reports that didn’t have the information necessary to analyze BP’s decisions in real time. He said the industry needs to learn from the disaster and get back to work in the region.
Feinberg, speaking yesterday to the House Judiciary Committee, said victims of the oil spill might be paid for claims that may be deemed ineligible for a court hearing. He said decisions on claims will be based on federal and state laws, while in some cases he said his determination might exceed case laws used by courts to determine damages.
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