BP struck a key victory in its battle to share the cost of the Gulf of Mexico oil spill when partner Mitsui & Co agreed on Friday to pay $1.1 billion towards the clean-up bill and possibly billions more in fines. Japanese trading house Mitsui's exploration unit MOEX owned 10 percent of the Macondo well but had sought to avoid paying its share of the costs, claiming BP's negligence exempted it from this obligation.
MOEX has dropped this claim and analysts said this weakened the case of 25 percent well shareholder Anadarko Petroleum, which has also invoked the same argument. "This is the first recognition by one of the partners that actually...blame is shared and should be shared and therefore the costs should be shared as well," Societe Generale analyst Irene Himona said.
"It is very significant because clearly now it means that BP can try and ensure that everybody else who is involved will also meet their obligations," she added. By 1337 GMT BP's shares were up 2.3 percent against a 0.8 percent rise in the STOXX Europe 600 Oil and Gas index.
Analysts said MOEX's decision to abandon its claim not only meant BP will not face potentially massive civil fines alone, but also highlighted possible weaknesses in the argument of gross negligence. That could suggest that the US government will struggle to prove it.
"That Mitsui should have elected to pay will thus likely be seen by the market as a statement from a closely involved industry player that it does not believe that claims that BP was guilty of gross negligence are likely to be upheld," analysts at Deutsche Bank said in a research note. BP has estimated the cost of capping the well, cleaning up the damage from America's largest ever offshore oil spill and compensating those affected will be over $41 billion, including what analysts estimate will be around $4-5 billion in fines.
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