Even more notable, though, in terms of the market reaction to the headline event, was that Halliburton's decline on Wednesday afternoon was larger than the decline in any of the companies named in the oil spill suit. Clearly, the market was expecting the legal battle and it wasn't moving the oil spill stocks much.
The Argus research analyst said, "I expected Anadarko to have to pay something and still expect it. I don't think this necessarily puts any more pressure on them to settle now." The analyst said his recollection of the contract between Anadarko and BP was for any dispute to be sent to binding arbitration.
Street analysts who believe Anadarko, for example, will ultimately have to pay some amount of oil spill damages, expect that as the legal situation plays out, BP and Anadarko might settle in a private transaction, somewhere between 0% and the 25% working interest that Anadarko had in the Macondo well.
The analyst also noted that Transocean management had previously indicated that as rig operator it might be liable for some damages resulting from oil spilled from the rig itself. Transocean had also filed a legal claim much earlier in the oil spill crisis to cap its liability and using a maritime law dating back over 150 years as the relevant statute.
In a notable change from the previous landmark oil spill case, the Exxon Valdez, the Justice Department suit against BP et al. is a civil suit. The government charged Exxon with a criminal complaint after the Valdez, before ultimately reaching a settlement. Nevertheless, the RFF environmental lawyer said Wednesday's action doesn't preclude the government from also pursuing criminal charges in response to the oil spill at a later date.
-- Written by Eric Rosenbaum from New York.
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