BP’s legal gamble may trim spill bill by billions

NEW ORLEANS/SAN FRANCISCO, Mon Apr 22, 2013 — BP Plc’s attempt to get a U.S. federal court to pin at least a sizable amount of the blame for the Deepwater Horizon disaster on other companies may have saved it billions of dollars.

After failing to settle claims from the 2010 Gulf of Mexico spill through negotiations, the British oil company opted in February to go to trial with plaintiffs ranging from small businesses to the U.S. government over the damages it will face.

The decision rests with U.S. District Court Judge Carl Barbier, who could issue findings on blame and the level of negligence as early as July.

Legal experts say BP appeared to succeed in shifting some of the blame for the disaster to rig owner Transocean Ltd. and cement provider Halliburton Co. In doing so, it may have shaved a slice off a liability that could stretch into the tens of billions of dollars.

BP “put their faith in the hands of the court,” said Blaine LeCesne, a tort law professor at Loyola University in New Orleans who has followed the trial closely. “It looks like that might have paid off.”

Of course, if Barbier determines that BP was grossly negligent then it could more than offset anything it has saved by getting the rap for the disaster shared more broadly.

Marathon to buy BP Texas City refinery for up to $2.5 billion

HOUSTON, Mon Oct 8, 2012 – Marathon Petroleum Corp. struck a deal to buy BP Plc’s Texas City refinery and related infrastructure for up to $2.5 billion, a purchase that will make Marathon the fourth-largest U.S. refiner and give it a bigger potential slice of the market for refined product exports.

Marathon said on Monday it had agreed to buy the 451,000-barrels-per-day refinery, the fifth-largest in the country, as well as the plant’s inventory, three intrastate natural gas liquids pipelines, four terminals and other assets.

The news sent shares in Marathon to a record high of $60.04 on the New York Stock Exchange. Since the stock began trading in June 2011, it has risen nearly 50 percent.

The base purchase price is $598 million, plus inventories estimated at $1.2 billion, Marathon said.

The agreement also contains a provision to pay up to $700 million more over six years, depending on the refinery’s profitability.

“The multiple is cheap, that’s why the shares of Marathon are up,” said Pavel Molchanov, an analyst with Raymond James. “Texas City has a rather complicated history and that alone has made the valuation of this deal lower than it would have been otherwise.”

The Texas City refinery was the site of a 2005 explosion, one of the worst industrial accidents in U.S. history. The blast killed 15 workers, injured 180 others and cost BP more than $3 billion to settle lawsuits and pay fines.

BP in $7 billion asset sale talks with Plains Exploration: source

NEW YORK, Mon Sep 10, 2012 – BP is in talks to sell some of its Gulf of Mexico oil fields to Plains Exploration & Production Co for roughly $7 billion, a person familiar with the matter said on Sunday, as the U.K. oil firm looks to raise money to pay for damages from the 2010 oil spill.

The amount BP will have to pay in damages for the Deepwater Horizon oil spill – America’s worst ever – is still in dispute. But last month the U.S. Justice Department accused the company of gross negligence and willful misconduct over the spill, a position that could lead to nearly $21 billion in civil damages if a federal judge agrees.

BP said in May that it was looking to sell a number of mature fields in the Gulf of Mexico, including its positions in the Marlin, Horn Mountain, Holstein, Ram Powell, and Diana Hoover fields.

A deal would be transformational for Houston-based independent oil explorer and producer, Plains, which had a market capitalization of $5.2 billion as of Friday. The company already has assets in the Gulf, as well as in California, Texas, Louisiana, and the Gulf of Mexico.

Like many other independent U.S. oil and gas companies, Plains has been working to build up its oil assets, as the price for U.S. natural gas has been in a prolonged slump. It had previously estimated that about 57 to 60 percent of its 2012 production would be oil.

The Wall Street Journal, which earlier reported news of the talks, said a deal could be announced as soon as this week.

Tesoro to buy BP refinery, related assets for $2.5 billion

CARSON, Calif., Mon Aug 13, 2012 – Tesoro Corp. said it would buy BP Plc’s refinery here and related assets for about $2.5 billion.

Independent refiner Tesoro said on Monday that it would pay $1.18 billion for BP’s refining and marketing business in Southern California, plus the value of the refinery’s inventory at the time of closing. At current prices, the inventory is valued at about $1.3 billion.

The 266,000-barrel-per-day, high complexity refinery is located south of Los Angeles. The deal also includes a retail marketing network of about 800 dealer-operated gas stations, ownership of BP’s Arco brand, 51 percent ownership in a company-operated 400 megawatt cogeneration facility, and other assets.

Tesoro, which expects the deal to close before mid-2013, said it planned to pay for the purchase with debt and cash generated by dropping some of the assets to its master limited partnership, Tesoro Logistics LP.

BP had said in late July that it was in advanced talks on the sale of the Carson plant, as well as its Texas City, Texas, refinery.

BP announced in February 2011 that it would sell the refineries by the end of 2012 as the company reorients its U.S. refining operations to take advantage of Canadian crude supplies.

BP’s North American products division, which oversees its U.S. refineries, will wrap up a three-year probation term this month stemming from the 2005 explosion that killed 15 people and injured many more.

Investors want strategy shakeup at BP to help company turn the page

HOUSTON, Wed Jun 20, 2012 – BP’s shareholders want to see some radical management action to help the company turn the page on U.S. oil spill litigation and the quarrel with its Russian partners.

Both issues have dragged on the value of a company that was once Britain’s biggest, but which now languishes in sixth place with a tainted reputation in the two countries that together account for half its oil output.

A move to jettison the refining, petrochemicals and fuel retailing businesses that distinguish an “integrated” oil and gas company from one that just finds and produces the stuff is one potential step.

Another might be a bold takeover deal to deliver the big blocks of future output the larger players in the industry are struggling to find.

“The integrated model isn’t delivering best value to shareholders. You look at Shell and Total and ENI – no one has demonstrated that the integrated model works particularly well,” said Stephen Thornber of Threadneedle Investments, a top 20 investor in BP.

“I would favor a much cleaner, much more upstream focused business which can utilize BP’s exploration, development and production skills and reduce its exposure to the dilutive refining and petrochemical business.”

BP: U.S. hiding evidence on size of Gulf oil spill

NEW ORLEANS, Fri Mar 30, 2012 – BP Plc has accused the U.S. government of withholding evidence that may show the 2010 Gulf of Mexico oil spill was smaller than federal officials claimed, a key issue in determining the oil company’s liability.

A reduction in the size of the spill would lower the maximum civil fine BP could be forced to pay under the U.S. Clean Water Act, a sum now estimated as high as $17.6 billion.

The government is one of many plaintiffs suing BP over the April 20, 2010 explosion of the Deepwater Horizon drilling rig, which killed 11 workers and triggered the largest U.S. offshore oil spill.

In a filing late on Thursday with the U.S. District Court in New Orleans, BP said more than 10,000 documents the government is refusing to turn over “appear to relate to flow rate issues” at the company’s ruptured Macondo well.

BP said the documents, which the government considers privileged because they reflect policy deliberations, may show that an August 2010 estimate that 4.9 million barrels of oil spilled from the well is too high.

“The United States’ invocation of the deliberative process privilege here sweeps too broadly,” because it shields evidence concerning “a factual issue, namely, the amount of oil discharged,” wrote Don Haycraft, a lawyer for BP.

“Fundamental fairness” requires that BP get access to this evidence for its defense, he added.

Wyn Hornbuckle, a U.S. Department of Justice spokesman, did not immediately respond to a request for comment.

BP sues Halliburton over $42 billion gulf oil spill bill

HOUSTON ― BP has called on contractor Halliburton to pay all costs and expenses it incurred to clean up the 2010 Gulf of Mexico oil spill, which the oil major previously put at around $42 billion.

Halliburton cemented the failed well that caused the United State’s biggest offshore oil spill.

In a U.S. court filing, BP said it was suing to recover costs and expenses from cleaning up the oil spill, lost profits, and “all other costs and damages incurred by BP related to the Deepwater Horizon incident and resulting oil spill.”

It did not specify an amount and it was not clear how the latest suit differed from a previous one brought last year. A BP spokesman declined to put a figure on the costs sought in the latest filing, but said the “documents speak for themselves.”

In April 2011, BP asked a court to award it damages “equal to, or in the alternative proportional to Halliburton’s fault,” to cover clean up costs and government fines BP might faces.

The company previously said it expected the costs of sealing the blown-out well, cleaning up the damage, compensating those affected and government fines to reach $42 billion.

BP has spent $14 billion in the Gulf Coast region in its response to the spill and set aside $20 billion for economic claims and natural resource restoration, according to its website.

Halliburton officials were not immediately available for comment.

The explosion on the Deepwater Horizon rig in April 2010, which killed 11 workers and spewed more than 4 million barrels of oil into the Gulf, has sparked a slew of lawsuits and federal citations against the companies involved.

BP has already cut deals with its two partners in the doomed Macondo well, Anadarko and Mitsui, which at first refuted their responsibility to contribute to oil spill bill, citing BP’s negligence.

Last month, Cameron International Corp. agreed a $250 million settlement with BP to help pay for costs associated with the Gulf of Mexico oil spill, raising hopes that deals between the British oil firm and two other contractors could follow.

Yet settlement agreements with two remaining parties, Halliburton and Transocean, have to date proved elusive.

Transocean, the owner and operator of the Deepwater Horizon rig, and Halliburton, which supplied cement to cap the well, are both being sued by BP to share the cost of the spill and cleanup, while the two have launched lawsuits of their own.