BP Falls Most in Four Months After U.S. Files Lawsuit Over Gulf Oil Spill.
The shares dropped as much as 3.2 percent, the most since Aug. 24, and were down 2.3 percent at 465.4 pence as of 9:08 a.m. local time. The stock is down 29 percent since the April 20 blowout on the Deepwater Horizon rig that killed 11 workers and caused the Macondo well to leak crude into the Gulf of Mexico until July.
BP has set aside $40 billion to pay for cleanup and litigation from the spill and is paying into a $20 billion escrow account, demanded by Obama, to pay claims from individuals affected by the accident. The shares have rallied more than 50 percent since the June agreement with the U.S.
“This raises a bit more uncertainty,” said Peter Hitchens, an analyst at Panmure Gordon & Co. in London. “People were getting comfortable that things had calmed down.”
Credit-default swaps on BP rose 20 basis points to 103, according to data provider CMA.
The lawsuit, filed yesterday in federal court in New Orleans, is the first brought by the U.S. over the spill. The Justice Department’s civil investigation is continuing, as well as a probe of potential criminal violations.
The lawsuit seeks damages under the Clean Water Act and a declaration that four of the defendants are liable under the Oil Pollution Act for all removal costs and damages caused by the oil spill, including damages to the environment, according to a Justice Department statement. The lawsuit doesn’t ask for a specified amount of damages.
Clean Water Act
The Clean Water Act authorizes the U.S. to seek civil penalties of $1,100 for each barrel of oil spilled, or in certain circumstances, as much as $4,300 a barrel from the companies involved, government lawyers said in a September filing with a court in New Orleans. The government reported in August that 4.9 million barrels were spilled.
“We intend to prove that these violations caused or contributed to this massive oil spill, and that the defendants are therefore responsible -- under the Oil Pollution Act -- for government removal costs, economic losses, and environmental damages,” Attorney General Eric Holder said yesterday at a news conference.
“We have not asked for damages at this point because it’s going to take years to fully quantify what the damages are,” Tony West, an assistant attorney general who oversees the Justice Department’s civil division, said at the press conference.
‘Solely’ Allegations
The lawsuit “is solely a statement of the government’s allegations and does not in any manner constitute any finding of liability or any judicial finding that the allegations have merit,” said Scott Dean, a BP spokesman.
“Alone among the parties, BP has stepped up to pay for the clean-up of the oil, setting aside $20 billion to pay all legitimate claims,” Dean said in an e-mail. “We took these steps before any legal determination of responsibility and will continue to fulfill our commitments in the Gulf as the legal process unfolds.”
In addition to London-based BP, the owner of the well, defendants in the lawsuit include units of Vernier, Switzerland- based Transocean Ltd., which owned the rig, Anadarko Petroleum Corp. and MOEX Offshore 2007 LLC, part owners of the well. Anadarko is based in The Woodlands, Texas. Mitsui & Co. owns 70 percent of Mitsui Oil Exploration Co., which holds 10 percent of the field where the Macondo well is located through its U.S. subsidiary MOEX Offshore, according to the Mitsui Oil website.
Transocean, Anadarko
“No drilling contractor has ever been held liable for discharges from a well under the Oil Pollution Act of 1990,” Guy Cantwell, a Transocean spokesman, said yesterday in an e- mail. “The responsibility for hydrocarbons discharged from a well lies solely with its owner and operator.”
MOEX Offshore said in an e-mailed statement that it is reviewing the complaint.
“We stand by our statement of June 18, that the operator’s decisions and actions on the rig likely amount to gross negligence and/or willful misconduct,” John Christiansen, an Anadarko spokesman, said in an e-mail. “We recognize that we may have obligations under federal law, and we will continue to look to the operator to pay all legitimate claims as it has committed to do.”
Other defendants and claims could be added later, Holder said at the news conference. Halliburton Co., which provided the cement to plug the well, wasn’t named as a defendant in the lawsuit.
BP Profit
BP captured 800,000 barrels of oil before the well was capped on July 15, according to a report in August by a team of government and academic scientists. The company returned to profit in the third quarter with a net income of $1.8 billion after a record loss in the second three months of the year.
Beyond the Clean Water Act penalties, the U.S. also can seek damages for destruction of natural resources, loss of taxes and royalties and removal costs under the Oil Pollution Act, the government said in court papers in September.
The U.S. lawsuit will become part of multidistrict litigation, according to the Justice Department statement.
The case is U.S. v. BP Exploration & Production Inc., 10- 04536, U.S. District Court, Eastern District of Louisiana (New Orleans) The combined case is In re Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, 2:10- md-2179, U.S. District Court, Eastern District of Louisiana (New Orleans).
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