Anadarko Petroleum strikes deal with Justice Department for $5.1B

The bulk of the money will be used to clean up polluted sites and the remainder will be used to compensate personal injury claimants.

By Ananth Baliga

WASHINGTON, April 3 (UPI) -- Anadarko Petroleum has agreed to a $5.1 billion settlement with the U.S. government for the cleanup of polluted sites and to compensate other claimants.

In what the Justice Department is calling the largest environmental enforcement recovery in history, Anadarko will take responsibility for environmental damage caused by Kerr-McGee, an Oklahoma energy and chemical company that is now a subsidiary of Anadarko.


“Through a lot of hard work, we uncovered this fraud and recovered over $5 billion for the American people,” Deputy Attorney General James Cole said in announcing the settlement. “This settlement demonstrates the Justice Department’s firm commitment to preventing and combating all forms of fraud and to securing environmental justice.”

The U.S had initially sought $25 billion to clean up 2,772 sites and compensate about 8,100 claimants. But after the settlement, $4.4 billion will be used on cleanup and the rest will be used to compensate 2,772 personal-injury claimants.

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The cases dates back to 2005 when Kerr-McGee spun off its chemical business and transferred environmental liabilities to Tronox, and three months later sold its soil and gas businesses to Anadarko. Tronox had to file for bankruptcy, after having to deal with Kerr-McGee's environmental blunders.


Shortly after filing for bankruptcy, Tronox sued Anadarko and Kerr-McGee for improperly dumping all environmental liabilities on Tronox before the Anadarko deal. The Justice Department and the Environmental Protection Agency joined in the Tronox suit, saying that Anadarko was the true creditor of for the damages.

Anandarko will pay the $5.1 billion in exchange for release from all other claims brought against Kerr-McGee.

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