Company operating Guyana’s second largest oil block fined billions for environmental infractions

Jan 27, 2020 News

By Kemol King

Fireboats battling the Deepwater Horizon blaze after the rig’s explosion in 2010 (Reuters/Landov)

Anadarko is one of the better endowed oil and gas companies operating in Guyana, when it comes to the sheer acreage granted to those companies. While ExxonMobil has a 45 percent stake in the 26,800 sq. km Stabroek Block, Anadarko operates the Roraima Block, at 19,828 sq. km, all on its own.
In 2019, the company was acquired by Occidental Petroleum Corporation. The acquisition came, not just with Anadarko’s assets, but with its sordid record of environmental and safety infractions. The fines levied against the company now amount to billions.
‘DEEPWATER HORIZON EXPLOSION’
In April 2010, the United States Exclusive Economic Zone of the Gulf of Mexico became the scene of one of the worst environmental and safety infractions of the Petroleum industry. The Maconda Prospect, located in the zone, was the site of a massive explosion of the Deepwater Horizon drilling rig. Although the prospect was BP operated, Anadarko held a 25 percent stake and was held liable as well.
During the explosion, natural gas travelled up the rig to the platform, killing 11 workers. Several were also left several injured. The explosion caused an oil well fire, and the Deepwater Horizon oil spill. Considered to be the largest oil spill in the history of the petroleum industry, it is estimated by the US government that 4.9M barrels of oil was spilt in the Gulf of Mexico.
The effect of the disaster on the environment and several industries was tragic. The oil formed a slick extending over thousands of square miles of the Gulf. In 2011, Anadarko decided to pay US$4B to BP to cover victims’ claims and cleanup costs, according to Reuters. The US Government went after Anadarko, seeking a fine above US$1B, and Anadarko said that no fine was justified, according to Reuters.
In 2015, a federal judge ordered Anadarko to pay a US$159.5M civil fine reflecting its stake in the well, far less than the Government sought. That’s not all.
‘ENVIRONMENTAL DUMPING OF TOXIC WASTE’
Anadarko was also held liable for generations of environmental dumping of toxic waste across many US states by its subsidiary, Kerr-McGee.
According to the US Environmental Protection Agency, Kerr-McGee and related subsidiaries of Anadarko were held liable for fraudulently conveying assets in an attempt to evade their liabilities for cleanups at toxic sites around the country, and for keeping the environmental disaster a secret.
Kerr-McGee had attempted to push its liabilities for the matter off to a subsidiary called Tronox. Tronox had hid the issue from its investors, who later found out and sued Anadarko.
The US Government also sued Anadarko to pay for the cleanup, resulting in a settlement of US$5.15B. The US EPA states some of the money was then earmarked to go toward cleanup at contaminated sites across the country. Some of the funds were set aside to compensate thousands of people living with the effects of the contamination.