OGJ Oil Diplomacy Editor
LOS ANGELES, Aug. 3 -- Mitsui & Co. Ltd. Executive Vice-Pres. and Chief Financial Officer Junichi Matsumoto, reiterating earlier statements by company officials, said his firm has yet to pay any part of a $480 million bill it received from BP PLC for costs related to the oil spill in the Gulf of Mexico.
“We are withholding payment,” Matsumoto said when the trading house, which released its April-June earnings results, announced it will likely take an extraordinary charge of several billion yen for the April-June quarter related to losses stemming from the Gulf of Mexico oil spill.
Mitsui & Co. said it has decided to write off the investment as the oil well is not expected to generate any revenue in the future. However, the write-offs do not include any of the costs associated with recovering the leaked oil in the gulf.
Mitsui & Co.’s subsidiary Mitsui Oil Exploration Co (MOEX), through its MOEX Offshore Ltd. unit, has a 10% stake in the BP-operated oil field off Louisiana, while Anadarko Petroleum Corp. holds 25%. BP, which holds the remaining 65%, wants the two firms to pay part of the clean-up costs for the oil leak.
In prepared testimony before a panel of the US Senate's Homeland Security Committee last month, however, Anadarko and MOEX Offshore both said their role as minority investors prevented them from making any decisions about the well or its drilling operations.
“Drilling arrangements throughout the gulf usually charge the operator of the project, BP in this case, with responsibility for all operational aspects of the project including…responding to oil spills and managing the payment of claims that might arise in connection therewith,” said MOEX Offshore Pres. Naoki Ishii.
Following the hearings, Anadarko issued a statement that quoted Chief Executive Officer James Hackett as saying: “The mounting evidence clearly demonstrates that this tragedy was preventable and the direct result of BP's reckless decisions and actions. BP's behavior and actions likely represent gross negligence or willful misconduct and thus affect the obligations of the parties under the operating agreement.”
In February, Anadarko announced a joint-venture agreement with Mitsui E&P USA LLC, an affiliate of Mitsui & Co. Under the agreement, Mitsui will participate as a 32.5% partner in Anadarko’s Marcellus shale assets, primarily in north-central Pennsylvania, for $1.4 billion.
Contact Eric Watkins at firstname.lastname@example.org.
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