BP claims $2.067 bil from Mitsui in Macondo oil spill costs
Sydney (Platts)--6May2011/717 am EDT/1117 GMT
Mitsui affiliate MOEX Offshore has received invoices from BP seeking
reimbursement totaling $2.067 billion related to last year's Macondo oil
spill in the US Gulf of Mexico, Mitsui & Co. said in its latest results
MOEX Offshore, a wholly owned subsidiary of MOEX USA Corp., based in
Houston, Texas, holds a 10% non-operating interest in the Block 252
Mississippi Canyon lease where the Deepwater Horizon rig was drilling the
Macondo well. MOEX USA is a wholly owned subsidiary of Mitsui Oil Exploration
Co., or MOECO, which is owned 69.91% by Mitsui.
BP has been sending invoices to MOEX Offshore periodically, setting out
the amount it calculates based on the company's 10% proportionate share of
the costs relating to the Macondo incident. In a notice of dispute letter
received by MOEX Offshore and the block's 25% owner Anadarko Petroleum on
April 4, BP said that as of February 28, 2011, MOEX owed about $1.856 billion.
Since then, MOEX has received additional invoices. "According to MOEX
Offshore, although the invoices it has received, if just added together,
would total a higher number, the most recent invoice dated April 5, 2011
states that MOEX Offshore's share of the expenses relating to the incident is
approximately $2.067 billion," the company said.
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"MOEX Offshore expects that it will continue to receive invoices from
BP, but is unable to reasonably estimate what the amount of those future
invoices will be," Mitsui said. "It is not certain at this point if MOEX
Offshore will have to make payment or not, and it cannot reasonably estimate
the size of any payments," the company added.
"In light of the numerous investigations that are currently taking place
to determine the facts and circumstances surrounding the incident and the
existence of uncertainty with respect to application of the provisions in the
operating agreement, MOEX Offshore has withheld payment of invoices BP has
issued to it seeking reimbursement of costs incurred by BP related to BP's
response to the incident," Mitsui said. "MOEX Offshore expects to continue to
withhold payment while it examines the situation."
In the notice of dispute letter, BP stated that MOEX Offshore was
required to pay the invoices within 30 days, and asserted that the company
was liable for a proportionate share of invoices sent to Anadarko, if they
were not paid. Under the terms of operating agreement, if the partners cannot
resolve the dispute through negotiation, it may go to arbitration.
The United States Coast Guard has also invoiced MOEX Offshore for $694.6
million under the Oil Pollution Act, which the company believes has been paid
MOEX Offshore was named as one of nine defendants in a complaint filed
by the US in the federal district court for the Eastern District of Louisiana
on December 15, 2010. The complaint seeks removal costs, economic losses and
environmental damages under the OPA and civil penalties in the Clean Water
MOEX Offshore, MOEX USA and MOECO are also defendants in a number of
civil lawsuits seeking recovery for damages purportedly caused by the
Japanese parent company Mitsui meanwhile posted a net income of Yen
367.85 billion ($4.55 billion) for the financial year ended March 31, 2011, up
145.7% from the previous year's Yen 149.72 billion. The company's revenue for
the year was Yen 4.679 trillion, 14.2% higher than the previous year's Yen
All the company's business segments, with the exception of chemicals
which underperformed in its trading activities, posted increases in net
income attributable to Mitsui & Co. The mineral and metal resources and
energy segments reported sharp increases in gross profit, reflecting a run-up
in iron ore and oil prices, the company added.
Mitsui forecast profit of Yen 370 billion for the financial year to
March 31, 2012. The company added that it envisaged its net income would be
Yen 500 billion over the subsequent three to five years.
--Christine Forster, firstname.lastname@example.org