State wins $255 million in 2006 pipeline leak arbitration

The state of Alaska was awarded $255 million in an arbitration award from Prudhoe Bay field owners over monetary damages to the state and lost production resulting from an extended shutdown of parts of the Prudhoe Bay field in 2006 due to leaks in field pipeline systems, Alaska's attorney general announced Thursday.

BP had admitted liability for purposes of the arbitration but contended the state suffered no losses. The company asked the arbitation panel to award no damages.

Following a four week hearing in May and June, the three-person arbitration panel issued a unanimous decision in favor of the State. "The award is final, binding, and non-appealable. After adjustment for previously agreed upon credits, the final award with prejudgment interest is $245 million; in addition, BP will pay $10 million to settle civil assessments for the spills," Attorney General Michael Geraghty said in a statement.

In total, BP will pay the State $255 million for the 2006 spills and pipeline shutdowns, Geraghty said.

In a statement, BP spokeswoman Dawn Patience said BP's share of the judgement is $66 million.

"We are pleased to finally resolve the last remaining claim from the 2006 spill. With this behind us we can now move forward, operating North America's largest oil field is a safe, reliable and compliant manner."

As the field operator BP will pay the state the entire amount and then seek reimbursement from other fields owners. ConocoPhillips and ExxonMobil own major parts of the Prudhoe field besides BP.


11/08/2012 - 11:57am