Should Anadarko Share In BP Clean Up Costs?

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When major oil companies drill deep-water wells, they usually take on partnerships with other companies to share a portion of the costs — and the risks. But BP partner Anadarko Petroleum says it isn't responsible for helping BP clean up the Gulf oil spill. Brett Clanton of the Houston Chronicle talks to Renee Montagne about the corporate showdown.

RENEE MONTAGNE, host:

The cost of cleaning up the oil spill in the Gulf is currently estimated at about $40 billion. BP doesn't want to pay all that. It sent a bill to one of its partners in the project, Anadarko Petroleum. But Anadarko refuses to pay.

To find out who is responsible, we called Brett Clanton. He's a reporter with the Houston Chronicle, and he's been covering the spill closely.

And thank you for joining us.

Mr. BRETT CLANTON (Journalist, Houston Chronicle): Good morning. Glad to be here.

MONTAGNE: Now, let's begin with some basics, how does it usually work? Does the lead player - and it would be in this case be BP - pay all the costs when there's an accident?

Mr. CLANTON: No. Typically, in these deepwater projects, there are several partners to help spread out the cost of developing a deepwater well. So in this case, BP owns 65 percent, Anadarko has 25 percent and Japan's Mitsui has 10 percent. So, you know, they shared all the upfront costs to develop this well. Conceivably, they're supposed to receive production from this well along those same kind of lines. And then if there's a spill, they would split the bills according to their ownership stakes.

MONTAGNE: Now that, you say typically, that would sound like under the circumstances where nobody's at fault.

E Mr. CLANTON: Exactly. And, you know, these contracts are written in such a way to give the minority partners - the non-operating partners - an out if the operator is at fault in the accident. So, in this case, you know, Anadarko is accusing BP of gross negligence or willful misconduct, and these are very careful words that they've chosen here. If Anadarko, it can prove that BP deliberately made errors, than, you know, they could be exempt from the cost of - their cut of the spill cost.

MONTAGNE: So will BP be able to show that it was not fully at fault, or will Anadarko be able to show that BP was?

Mr. CLANTON: Well, it's unclear at this point, I mean, is the short answer. Right now, Anadarko has just leveled these accusations at BP. It's not in a formal lawsuit yet, but you're starting to see where - how their plan of attack against BP and using this language - which is, you know, legal language - here against BP which is looks to be setting up a lawsuit.

MONTAGNE: So we can look forward to long years in court in this one.

(Soundbite of laughter)

Mr. CLANTON: Almost definitely.

MONTAGNE: Is BP's disaster in the Gulf affecting partnerships that it has on other projects?

Mr. CLANTON: Well, it hasn't yet. But that's going to be a real interesting question to watch going forward. It's very common for companies to have partners out there. I mean, if you think of these deepwater wells, I mean, just to drill out there is roughly a million dollars per day. So, you know, they're very eager to have partners out there.

The question is whether companies are going to be willing to sign up with BP in an operator capacity, where BP is calling the shots, you know, running, doing the day to day management of a well out there. They may still be happy to have BP along as a financial partner in projects, but Anadarko is the only one that has sort of publically questioned whether they would do business again with BP. You haven't heard it explicitly from other companies, but that's one of the big questions that has to be answered.

MONTAGNE: Brett Clanton covers the oil industry for the Houston Chronicle.

Thanks very much for joining us.

Mr. CLANTON: You're welcome. Glad to be here.

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