Mitsui unit to pay $90 million to settle Deepwater Horizon spill liability

MOEX Offshore 2007 LLC has agreed to settle its liability in the Deepwater Horizon oil spill in a settlement with the United States valued at $90 million, according to the Department of Justice, the U.S. Coast Guard and the U.S. Environmental Protection Agency (EPA). At the time of the spill, MOEX Offshore was a minority investor in the lease for the Macondo well. It no longer owns any share of the lease. MOEX Offshore is a wholly-owned subsidiary of the MOEX USA Corporation.  MOEX USA's corporate parent is Mitsui Oil Exploration Co. Ltd., which in turn is owned by Mitsui & Co. Ltd. of Japan

The $90 million settlement is the largest civil penalty ever recovered under the Clean Water Act. Around $45 million  is going directly to the Gulf in the form of penalties or expedited environmental projects.

According to the terms of the settlement, MOEX will pay $70 million in civil penalties to resolve alleged violations of the Clean Water Act resulting from the spill and agreed to spend $20 million to facilitate land acquisition projects in several Gulf states that will preserve and protect in perpetuity habitat and resources important to water quality and other environmental features of the Gulf of Mexico region. 

Beginning with a well blowout and explosion on April 20, 2010, the owners and operators of the Macondo Well and the drilling rig Deepwater Horizon allowed millions of barrels of oil to escape into the Gulf of Mexico, affecting the entire region.  The Clean Water Act provides for civil penalties for such discharges.

"The Department of Justice has not wavered in its commitment to hold all responsible parties fully accountable for what stands as the largest oil spill in U.S. history," said Attorney General Eric Holder.  "This landmark settlement is an important step – but only a first step – toward achieving accountability and protecting the future of the Gulf ecosystem by funding critical habitat preservation projects."

"This will move the Gulf Coast along in its recovery as it continues to rebound from the largest spill in U.S. history," said Coast Guard Commandant Adm. Bob Papp.  "The settlement demonstrates our firm commitment to hold accountable those who pollute our environment."

"This is good news for the Gulf Coast communities that are continuing to rebuild their economy and restore their ecosystem. This administration is going to stand with the people here to ensure a full recovery from the Deepwater Horizon oil spill," said EPA Administrator Lisa P. Jackson. "Dedicating funds to actions that restore the local waters is a vital part of restoring these communities.  As someone who grew up on the Gulf Coast, I know how important clean water is to the lives and livelihoods of the people here, and I know we need to take every possible action to get the ecosystem here on a path to long-term restoration."

As part of the settlement, MOEX Offshore has agreed to pay $70 million in civil penalties, of which, $45 million will go to the United States.  The money will go toward replenishing the Oil Spill Liability Trust Fund, where by law it will be available to pay for response actions, cleanup and damages caused by future spills.  The remaining penalty will go to Gulf states that participate in the settlement.  Those states will receive penalty payments as follows: $6.75 million to Louisiana, $5 million each to Alabama, Florida and Mississippi, and $3.25 million to Texas.

MOEX Offshore has also agreed to secure and protect properties of ecological significance for the Gulf habitats.  MOEX Offshore will ensure that properties within the states of Louisiana, Texas, Mississippi and Florida are transferred to – or acquired by – state governments, non-profit groups, land trusts or other appropriate entities, to protect those properties from development.  In all, these projects are expected to cost at least $20 million. The negotiation process with MOEX included numerous discussions with the Gulf states, who have been indispensible in reaching this important agreement.

This settlement does not affect the government's claims against any other defendant in the Deepwater Horizon lawsuit that was filed on Dec. 15, 2010.  The trial of the first phase of the case is set to begin in federal district court in New Orleans on Feb. 27, 2012.
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The proposed settlement, lodged in the U.S. District Court for the Eastern District of Louisiana, is subject to a 30-day comment period and final court approval.  Information on submitting comment is available at www.justice.gov/enrd/Consent_Decrees.html.

February 20, 2011