Rep Rahall Asks Anadarko to Donate Over Spill

Deepwater Horizon Gulf of Mexico Oil Spill

WASHINGTON (Dow Jones Newswires), June 11, 2010

A U.S. House of Representatives member is asking Anadarko, the minority owner of the lease at the center of an eight-week-old Gulf of Mexico oil spill, to donate money to help rehabilitate coastlines in the region.

Anadarko has received little attention on Capitol Hill since the April 20 explosion of a drilling rig that was being leased by BP and the subsequent mile-deep leak in the region. But Anadarko is entitled to 25% of revenue from the fossil fuels produced from the project--including revenue from oil being collected from a broken pipe gushing hydrocarbons into the ocean.

Rep. Nick Rahall (D., W. Va.) wrote the company that "it is essential that all companies associated with this incident do their part to help mitigate the ongoing human suffering and environmental damage." In the letter from Thursday, Rahall said Anadarko should "follow BP's lead and donate its share of net revenues to help the people and environment of the Gulf."

BP earlier this week promised to donate net revenue from oil collected from the gushing undersea well to a fund to improve Gulf Coast wildlife habitats. A BP spokeswoman said Friday that BP is entitled to only 65% of the net revenue, with the remainder belonging to other companies with a stake in the lease.

"We are evaluating what to do," an Anadarko spokesman said. "We'll do what's right with that net revenue. We hope to make an announcement in coming days."

An Anadarko spokesman wasn't immediately able to be reached for comment.

Rahall's letter also reflects lingering bad feelings over an earlier incident that allowed Anadarko to escape paying royalties to the U.S. government from oil contracts signed in the 1990s. The U.S. Interior Department had said it had discretion to collect fees from eight oil and natural gas production leases in the Gulf of Mexico, but Anadarko argued that a 1995 law intended to encourage expensive offshore oil and gas development specifically prevented the collection of royalties until a minimum volume of oil and gas production had been met.

A New Orleans-based federal appeals court sided with Anadarko. The U.S. Supreme Court last year declined to hear the case, handing a victory to Anadarko and other companies in a similar position.

"In light of Anadarko's successful resolution of its lawsuit against the United States--a resolution that I believe rests on a fundamentally flawed reading of Congressional intent in the Deepwater Royalty Relief Act of 1995, and which the Government Accountability Office has estimated could cost the American taxpayers up to $54 billion--I believe that it is only appropriate for your company to give something back to the American people," Rahall wrote.

Copyright (c) 2010 Dow Jones & Company, Inc.

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