BP and Anadarko agree $4bn oil spill settlement

Oil giant BP and Anadarko, its partner in the well which caused the Gulf of Mexico oil spill, have agreed a settlement on cleanup costs whereby Anadarko will pay BP $4 billion - less than half the amount it may have been forced to pay in court.

BP said on Monday that as part of the deal, Anadarko will no longer pursue its allegations of gross negligence against BP and that the deal excludes possible government fines the parties may have to pay.

As a 25 per cent partner in the Macondo well, Anadarko was obliged to pay 25 per cent of the costs of cleaning up the spill, compensating those affected and paying government fines.

It could only avoid this responsibility if it proved BP had been grossly negligent - something which could, potentially, have added around $18bn to the total amount of fines BP faced.

BP has said the total bill for the oil spill, including government fines, for which it has taken charges of $3.5bn, will be $42bn.

This suggests Anadarko could have faced a total bill of $9.6bn.