BP: Mitsui Notified Co. It's Withholding Oil-Spill Payment
HOUSTON (Dow Jones Newswires), July 13, 2010
BP said Tuesday that Japan's Mitsui & Co., its partner at the Macondo well in the Gulf of Mexico, has notified the company it's withholding reimbursement payments for expenses related to the massive oil spill there.
MOEX Offshore 2007 LLC, which is a subsidiary of Mitsui Oil Exploration Co., Ltd., informed BP Monday that they are withholding payment for their share of costs related to the leak in the gulf, including costs associated with containment efforts, BP's spokesman Mark Salt said in an emailed statement.
"We are disappointed that another party has failed to live up to its obligations under the Macondo Operating Agreement and as a responsible party under the Oil Pollution Act," Salt said. Mitsui has a 10% interest in the mile-deep well, which has been spewing oil into the Gulf's water since late April.
Last week, Anadarko, which owns a 35% interest in the well, also notified BP that it was withholding payments related with the spill.
In early June, BP billed Anadarko just over $272 million for May's expenses, according to an invoice provided by the subcommittee on Federal Financial Management, Government Information, Federal Services and International Security. Mitsui was billed around $111 million, according to an invoice provided by the Senate subcommittee.
The Oil Pollution Act, enacted in 1990 after the Exxon Valdez spill in Alaska, establishes that responsibility for spills from an offshore platform lies with the companies that own the leases granted by the federal government.
But Anadarko Chief Executive Jim Hackett said in June the oil spill in the Gulf of Mexico was "preventable and the direct result of BP's reckless decision and actions," allegations that BP has rejected. The Houston-based company has said its operating agreement with BP for development of the Macondo well contains a clause that could limit Anadarko's liability if misconduct or gross negligence of the operator, BP, is proved.
BP said Tuesday it will continue evaluating its options under the operating agreement and the law regarding its relationship with Mitsui and Anadarko.
Anadarko's Hackett and Naoki Ishii, President of Mitsui unit MOEX Offshore 2007, will testify on their liability in the Gulf oil spill before the subcommittee on July 22.
This will be the first time that the top executives of BP's partners will give lawmakers their view on their responsibility for the spill-recovery costs.
Copyright (c) 2010 Dow Jones & Company, Inc.
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