Anadarko Petroleun to pay $5B to settle pollution cleanup

Anadarko Petroleum Corp. agreed to pay $5.15 billion to settle a U.S. claim for $25 billion to clean up 85 years' worth of pollution left behind by its Kerr-McGee unit across the country, including uranium mines and wood-treatment plants.

The U.S. Justice Department said it was its largest environmental recovery ever.

"For 85 years, Kerr-McGee operated numerous hazardous businesses, and those businesses caused significant damage to the environment and to communities exposed to contamination," Deputy Attorney General James Cole said in a statement.

The United States initially sought $25 billion to clean up 2,772 sites and compensate about 8,100 claimants. Most of the settlement, $4.4 billion, would be used for environmental cleanup and to settle environmental claims, Cole said.

Anadarko, based in Woodlands, Texas, had said in January it should pay $850 million to $4 billion.

Kerr-McGee, founded in 1929, left a toxic legacy that includes uranium mines in Navajo territories in the West and wood-treatment plants that used creosote in Mississippi and Pennsylvania, the U.S. Environmental Protection Agency has said.

Anadarko shares surged 14.51 percent on news of the accord, closing at $90.02. Shares of Anadarko, which drills for oil and gas from Colorado to Mozambique, have lagged behind peers since 2010 with the company weighed down under the onus of potential liability from the 2010 Deepwater Horizon spill in the Gulf of Mexico and the case settled yesterday.

"There are a lot of investors out there that would like to own Anadarko, but they couldn't because of these liabilities hanging over them that were difficult to quantify," said Tim Beranek, a money manager at Denver-based Cambiar Investors LLC, which owns nearly 2 million Anadarko shares.

Kerr-McGee spun off its chemicals business and old environmental liabilities as Tronox Inc. beginning in 2005. Shortly after the deal Anadarko offered to buy Kerr-McGee's oil and natural gas assets for $18 billion. Tronox filed for bankruptcy in 2009 and sued Kerr-McGee over the environmental debt.