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BP faces Clean Water Act fine for Macondo well blowout

June 16, 2014
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More than four years after it happened, the Macondo well incident in the Gulf of Mexico continues to capture the attention of the industry and the public. Shortly after new evidence was revealed on the cause of the well blowout -- which killed 11 workers and caused the biggest offshore oil spill in the United States -- a U.S. appeals court ruled that the owners of the well, BP and Anadarko Corp., will be liable for violations of the federal Clean Water Act.

This means that both companies will have to pay potentially huge penalties for the damage caused to the Gulf of Mexico water and coastal line, Forbes reported. At the time of the incident BP owned 65 percent of the well, while Anadarko had a 25-percent non-operating stake. The Clean Water Act states that companies found to be strictly liable for an oil spill could be fined up to $1,100 per barrel. However, if companies are found to be grossly negligent the penalties could reach up to $4,300 per barrel of oil.

According to Forbes, Anadarko's exposure to fines under the Clean Water Act is less significant because the company was not directly involved in drilling operations. However, BP could face a potential fine of up to $17.4 billion, depending on the way the court sees the two major aspects in the lawsuit -- if BP is liable for gross negligence and how much oil spilled during the 87 days in which BP tried to seal the well. Currently, BP has provisioned just over $3.5 billion for penalties, but if the maximum penalty under the Clean Water Act is imposed the company may have to pay up to $14 billion more.

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