BP (NYSE:BP) Shares on Hold Until Justice Probe Completed

There are a number of things that need to be resolved before BP's (NYSE:BP) shares will be able to be released from the current constraints on them, not the least of which is the ongoing investigation by the U.S. Justice Department.

An investigation by U.S. Attorney General Eric Holder will determine whether or not BP will be designated as being grossly negligent under the Clean Water Act. If they are, their costs would be up to $17.6 billion.

They would actually be much higher though, as their partners in the failed Macondo well, Anadarko (NYSE:APC) and Mitsui (NASDAQ:MITSY), would be exempt from paying for their part in the mishap because of the terms of the partnership if BP is considered to be grossly negligent in the matter. That could be worth several billion more at minimum to them.

Other potential consequences could be the forfeiture well operating licenses and not being allowed to bid on future government contracts.

Until this is brought to a conclusion, BP shares will continue to underperform.

At this time BP is the largest operator in the Gulf of Mexico.

BP (NYSE:BP) Will Waive Liability Cap

Last week when BP (NYSE:BP) would go on record at a court hearing about waiving the liability cap instituted via the Oil Pollution Act of 1990, it caused a mini uproar and confusion after they had publicly stated in the past they would waive the restrictions.

That changed today and clarity was brought to the situation as BP said in a court filing they would indeed waive the liability cap.

Also per the filing, BP was generous with their advice for other major players in the Gulf spill, encouraging Transocean Holdings LLC (NYSE:RIG), Anadarko Petroleum Corp (NYSE:APC) and MOEX Offshore 2007 LLC to also waive the cap.

MOEX is the majority owner of Mitsui (Nasdaq:MITSY), which has a 10 percent stake in the Macondo oil well. Anadarko has a 25 percent stake and BP the remaining 65 percent. Transocean owned the Deepwater Horizon oil rig which was leased by BP from them.

Also in the filing BP stated it has reserved the right to go after reimbursement for money it has already paid from its partners. Much of that remains to be decided based on whether they are designated as being grossly negligent in the matter.

If they are, the other participants and owners probably won't have to pay damages to BP.

BP (NYSE:BP) E-mails with Anadarko (NYSE:APC), MOEX, Could Determine Liability in Oil Spill

BP (NYSE:BP) said via offshore land negotiator Michael Beirne that e-mails between them and Macondo oil well partners Anadarko Petroleum Corp. (NYSE:APC) and MOEX 2007 LLC reveal they were receiving real-time data from the Deepwater Horizon oil rig in the days before the explosion which led to the oil spill in the Gulf of Mexico.

As proceedings go forward, that could be a significant part of determining financial liability for the companies.

So even while BP's costs continue to mount, eventually they could get some relief from their partners, who may have to reimburse them for billions.

The other scenario that could play out is if BP is determined to be grossly negligent in connection to the incident. In that case, their partners via the contract wouldn't be responsible for paying damages, and it could lead to many more billions in fines from the violation of the Clean Water Act.

If that isn't the case, then Anadarko and MOEX, through their majority owned Mitsui & Co (Nasdaq:MITSY), would have to pay their portion of the damages.

Mitsui and Anadarko carry almost the same market cap, so both could be hit hard from it, although Anadarko would be hit the hardest because of their 25 percent stake, as Mitsui only has a 10 percent stake in the well.

BP (NYSE:BP) Ready to Resume Relief Well Drilling

Drilling on the relief well which will be used to perform the final step to permanently plug the Macondo oil well in the Gulf of Mexico, is ready to be resumed by BP (NYSE:BP).

After the final step of removing the failed blowout preventer and replacing it with a new one, the way is cleared for the drilling to begin to reach the annulus of the well where cement and mud will be injected into the well to perform the "bottom kill," which will be the final step in the overall ordeal, which began April 20 when the Deepwater Horizon oil rig exploded and spewed oil into the Gulf.

Anadarko Petroleum (NYSE:APC) and Mitsui were also partners in the project, with Anadarko owning a 25 percent stake and Mitsui (Nasdaq:MITSY) a 10 percent stake through their majority-owned MOEX company.

Government lead man in the Gulf cleanup, Thad Allen, says the damaged well is now "secured," preparing the way for the resumption of drilling of the relief well, which is a short distance from its destination.

Should We Invest in BP (NYSE:BP) Now?

After a long downward spiral, BP (NYSE:BP) rebounded a little bit on Wednesday, finishing at $35.25, a gain of $0.33, or 0.95 percent. For some that may look like a possible signal to load up on the stock again, but until a lot more clarity comes concerning the costs associated with the oil spill, BP will remain a crap shoot; for long-term and short-term traders.

The problem is, every time some new clarity comes, several more uncertain elements come to the forefront the dash the positive.

For example, the condition and cause of the blowout preventer and why it didn't perform as it should have. That leaves the possibility of some companies like Cameron International (NYSE:CAM), which built the preventer, open to some liability, but also possibly not.

Now there's the continuing salvage operation which must be performed in a manner which will result in the blowout preventer being in the condition it was when it sunk with the oil rig: Deepwater Horizon.

If something happens when retrieving it, the consequences could change the dynamics of liability going forward.

This type of uncertainty, which will dramatically affect the performance of BP in the years ahead, weigh on everyone, and until they're resolved, it's simply guesswork as to how much BP will end up paying and for how long.

Another factor is whether or not BP will be designated as "grossly negligent" by investigators, which could make a difference in fines of $4.9 billion, at the bottom, to as high as $17.6 billion in the worst case scenario.

One other aspect of that would be the release of their partners in the well, Anadarko Petroleum Corp. (NYSE:APC) and Mitsui (Nasdaq:MITSY) (via majority-owned MOEX Offshore), from liability, which would put billions more on BP to pay out, or save them money if they aren't designated as such.

This is why temporary successes don't do much to move the stock, as uncertainty always creates paralysis or a negative reaction to circumstances, and BP is far from having that settled for some time.

Can BP (NYSE:BP), Anadarko (NYSE:APA), Mitsui (Nasdaq:MITSY) Partnership Survive?

In the midst of the storm surrounding BP (NYSE:BP), one thing largely lost, but not completely forgotten, is the ongoing partnership in the Macondo oil well between BP (NYSE:BP), Anadarko (NYSE:APA) and Mitsui (Nasdaq:MITSY).

Clouding the relationship, although not legal standing, is the attempt be BP to pass on expenses for the Gulf accidents to its partners, who in the case of Anadarko owns 25 percent in the oil well, while Mitsui owns 10 percent via its MOEX Offshore 2007 LLC unit. BP owns the remaining 65 percent.

The bill sent to Anadarko is over $1 billion, while MOEX has been sent $480 million.

Anadarko, who could be hurt deeply if they end up having to pay a lot, are counting on BP being designated as being grossly negligent in their actions, as that could eliminate Anadarko from being liable for the damage from the spill. A similar case could be made for MOEX.

With close to $4 billion in oil still in the well, it remains to be seen if that will tapped again by BP, which would give their partners some incentive to continue working together.

Still, depending on the outcome, that isn't that much when in the case of Anadarko it would only make them break even, and even if the decision to drill again is made in the future, it would probably be several years before it were to happen, hitting the partnership hard for the two smaller energy companies.

There is also the very public castigation of BP by Anadarko, which could have brought things beyond business to being personal. If that is part of the current underneath the story, we could see things more hostile and unable to be fixed, rather than a continuation of the partnership.

Why Transocean (NYSE:RIG) Cited BP (NYSE:BP) Contract in Filing

After a somewhat disappointing performance in the last quarter, Transocean (NYSE:RIG) decided it was time to point to their contract with BP (NYSE:BP) and how it protects them from the majority of claims and lawsuits which are being leveled against BP.

In a required regulatory filing with the U.S. Securities and Exchange Commission, Transocean cited their contract, which evidently entails about 400 pages, saying it protects the company the majority of damages resulting from the Deepwater Horizon explosion that led to the oil leaking into the ocean, and loss of 11 workers.

One are it doesn't protect them in is with nine of the workers, who had worked for Transocean. The remaining two that perished in the accident worked for BP.

This is important for Transocean, and the reason they bring it up at this time is a form of guidance for their shareholders and potential investors.

If it isn't clear as to the level of liability faced by Transocean in the Macondo oil well disaster, most will sit on the sidelines until that becomes clearer.

Transocean is attempting to eliminate that potential scenario by pointing to the terms of the contract, which others feel that have a solid case for.

Others like Anadarko Petroleum (NYSE:APA) and Mitsui (Nasdaq:MITSY), while under different contracts, are also waiting things out before committing to paying any funds. They'll probably wait for the final determination as to whether or not BP is identified as reckless in the matter, which could be a strong impetus for them to continue to resist paying the bills BP is sending them, and fight it out in arbitration, which the contracts call for, or possibly in court if they have to.

BP (NYSE:BP) Sends Mitsui (Nasdaq:MITSY) Bill for $480 Million

Mitsui (Nasdaq:MITSY), which has refused to comment for the duration of the BP (NYSE:BP) oil spill, especially when it has been noted they've received bills from BP in connection with the disaster, reported it has received a bill from BP of $480 million.

The reason for the bill is Mitsui is a 10 percent partner in the project. Also being billed during the cleanup efforts has been Anadarko (NYSE:APC), which has also been billed.

Anadarko has been very verbal about not paying the bills, saying it was the reckless behavior of BP which led to the catastrophe. Mitsui, on the other hand, has refused to comment and has been on the sidelines watching until the appropriate moment. Anadarko has a 25 percent stake in the Macondo well.

Terms of their partnership include an arbitration clause, which the companies could enter into if BP continues to press the matter, as they seem to be more than willing to do.

BP (NYSE:BP) Partners Refuse to Pay Gulf Bills

BP (NYSE:BP) is alone in paying for the Gulf cleanup and liabilities, even though they are not the sole owners of the properties. Anadarko Petroleum (NYSE:APC) and Mitsui of Japan, are 25 percent and 10 percent owners respectfully, while BP is the majority owner with their 65 percent stake.

Although the agreement of ownership includes a clause which requires Anadarko and Mitsui to pay for problems related to the Macondo oil well, it also includes an out, which relates to if there were reckless actions which led to an accident.

In this case, Anadarko especially, has asserted BP has been reckless in the matter, and so they are released from having to pay a portion of the costs, even though they are owners.

Mitsui, throughout the entire situation, have refused to comment.

Anadarko has been sent a $272 million bill most recently, while Mitsui has been sent a bill for $111 million.

Mosaic (NYSE:MOS) Investment in Vale (NYSE:VALE), Mitsui Completed

Mosaic Company (NYSE:MOS) has closed the investment deal in a joint venture with Vale (NYSE:VALE) and Japan-based Mitsui.

Jim Prokopanko, Mosaic's President and Chief Executive Officer, said this, "We are pleased to close this transaction that advances our strategic objective to secure our phosphate rock supply."

The phosphate rock supply mentioned by Prokopanko is located in the Bayovar region of Peru.

Mosaic paid Vale $385 million for their stake in the project. Also included in the terms was a 35 percent economic interest, along with supply agreement which they get up to 35 percent of the phosphate produced from the mine.

Government Taking Over BP (NYSE:BP), Transocean (NYSE:RIG), Anadarko (NYSE:APC) and Halliburton (NYSE:HAL)?

In somewhat of a shocking revelation, the government, on June 23, sent letters to BP (NYSE:BP), Transocean (NYSE:RIG), Anadarko (NYSE:APC), Halliburton (NYSE:HAL) and Moex (Mitsui & Co.), saying they must provide information of any kind in relationship to depleting their assets to the U.S. government.

The government evidently doesn't want any deals done which could result in the companies not having the assets available to pay for any judgments which may be made against them.

Bloomberg News made a Freedom of Information Act request concerning the letters, where they said the U.S. government said they want to be sure they don't “deplete those assets that would be available to satisfy a judgment," in case of liability being found against them.

Some of events the government wants to be made aware of are acquisitions, disbursements, sales and restructuring.

While this may not be an official takeover like the banking industry, practically this is a takeover by the government of these major oil companies, as they're essentially forbidding them from making any type of major transaction and must evidently get permission from the U.S. government if they are thinking of doing it.

So the oil giants are going about their daily operations, but they are locked in time as far as making deals without the approval of the U.S. government.

This of course assumes these companies comply with the "request."

BP (NYSE:BP) Gets $51.4 Million Bill from Government

BP (NYSE:BP) was billed the largest amount by the U.S. government since the Deepwater Horizon oil rig explosion, this time an additional $51.4 million, although the Obama administration said others were named as parties to pay the bill, although they weren't identified.

To date, the government has billed BP $70.9 million for the duration of the oil spill.

As far as the unnamed parties, they're not too difficult to identify, as Anadarko Petroleum (NYSE:APC) and Mitsui, a Japanese oil company, were the co-owners of the oil well now leaking, with Anadarko owning 25 percent, and Mitsui 10 percent. BP owns the other 65 percent.

Although it is would be assumed the money would be taken from the $20 billion escrow fund for cleanup expenses and other claims, it wasn't clear that was the case, and the additional companies billed add uncertainty as to if that is the case.

Oppenheimer Cuts BP (NYSE:BP) Price Target

Joining a growing number of financial companies, Oppenheimer & Co. is the latest to lower their price target on BP (NYSE:BP), dropping it from $55 to $45, based on the battle brewing between BP and Anadarko (NYSE:APC) over whether or not Anadarko should join them in paying for damages related to the Gulf oil spill.

Anadarko is a 25 percent stakeholder in the oil well now leaking into the Gulf.

Last week in a press release, Anadarko stated this: "The mounting evidence clearly demonstrates that this tragedy was preventable and the direct result of BP's reckless decisions and actions."

This is of course an attempt be Anadarko to deflect any blame, as now that BP has taken the overall brunt of the focus and anger, attention is slowly gravitating toward them, and to a lesser degree: Mitsui, from Japan.

It is likely the partners will end up in court if Anadarko doesn't willingly enter into a deal to pay for part of the damages.

BP (NYSE:BP) Cleanup Costs Exceed $2 Billion

The cleanup costs in the Gulf of Mexico have now grown to over $2 billion since April 20th for BP (NYSE:BP), and there's nothing to indicate the costs are going to level off any time soon for the oil giant.

Included with the figure is the approximate $105 million paid out to about 32,000 businesses and people who have made claims against the company.

All of this doesn't include the recent escrow fund BP agreed to pay into, which will cost them $20 billion over a period of four years, where they'll pay $5 billion a year during that time.

BP is pushing its partners in the oil well, Anadarko Petroleum Corp. (NYSE:APC), which owns a 25 percent state in the well, and Japanese company Mitsui, which owns a 10 percent stake, to share in the costs related to the catastrophe.

The two companies are resisting that at this time, saying BP's actions led to the accident, and so should be held completely accountable.

There is also the problem of BP entering into the $20 billion agreement without consulting either company, something which may be illegal on their part.

It looks like it may have to go to litigation to be resolved.

BP (NYSE:BP) Going Legal on Partners

It's becoming clearer why Anadarko (NYSE:APC) CEO Jim Hackett went on the offensive against their partner BP (NYSE:BP) concerning who's liable from the claims concerning the oil spill, as BP has already sent them one bill in regard to the matter, and it seems the response of Hackett was an attempt to paint BP as completely liable, with Anadarko and Mitsui, the other partners in the oil well, not being liable at all.

In response to that assertion, BP is in the process of readying a lawsuit against Anadarko, saying it is "shirking its responsibilities."

Anadarko used terms like BP was guilty of "gross negligence or wilful misconduct," harking to the phrase used in the $75 million cap law, which cap is disallowed if "gross negligence or wilful misconduct" is found to be part of a particular event.

So while Anadarko is attempting to sway public opinion in the matter, they are also speaking directly to American lawmakers in regard to the terms of the financial cap being removed, which BP already had agreed to, giving the appearance they agree to the removal terms, which would indeed be connected to behavior that was described as above.

The question is whether or not lawmakers considered BP's actions as trying to work with them to remove liability limitations, or it was an admission of guilt. If it's considered an admission of guilt by BP, Anadarko could have a point there.

Anadarko is the largest junior partner, owning 25 percent of the oil well, while Mitsui is a 10 percent partner, who to this point hasn't made a decision on whether or not to admit to liability in the accident and pay a portion of the overall costs as well.

Assuming both companies refuse, there will probably be lawsuits filed against both in the case by BP.

It's hard to see them getting completely out of liability, and the market is punishing Anardarko in a way they believe they will have to pay out something.

But in the end it probably will be a decision made by the courts, and that could get down and dirty before it's all through, with potentially billions on the line for all parties involved.

$1.4 Billion Anadarko (NYSE: APC) Marcellus Shale Deal

Anadarko Petroleum Corp. Marcellus Shale

Anadarko Petroleum Corp. (NYSE: APC) sells Stake in $1.4 Billion U.S. Gas Deal Marcellus Shale natural gas project to Japanese trading company Mitsui & Co. for $1.4billion.

Mitsui says it'll invest a minimum of $3 billion to help move the estimated $25 billion gas project forward. The goal is to get gas production levels up to 460 million cubic feet a day.

As a result of the agreement, Mitsui will have a 32.5 percent stake in the assets of Anadarko, which is about 15.5 percent of the gas production project.

The lifespan of Marcellus Shale is projected at about 60 years, with production expected to peak sometime between 2018 and 2020.

Anadarko Petroleum Corp. Marcellus Shale