BP Plc (BP/), operator of the Macondo well that caused the U.S.'s worst oil spill, may reach a settlement for the disaster this week after a partner agreed on fines, an Oppenheimer & Co. analyst said.

Mitsui & Co. (8031)'s MOEX Offshore 2007 LLC will pay $90 million to the U.S. and five states to settle pollution violations related to 2010 spill. While BP will probably have to accept different terms as the operator, the settlement suggests that BP would pay $585 million for violations, less than 20 percent of what the company has provisioned, said Fadel Gheit, an analyst at Oppenheimer in New York. BP rose to the highest since March in London trading.

"This is only the civil part and does not include possible criminal charges and penalties," Gheit said in an e-mailed response to questions. "The trials will begin later this month and all parties are eager to settle before then. So there could be very important decisions this week."

BP shares remain 26 percent below their level in London before the spill and the company has claimed about $40 billion in charges to cover the costs of litigation and cleanup. Chief Executive Officer Bob Dudley said Feb. 7 that the company would like to reach a settlement if the terms are right.

Shares rose as much as 2.4 percent to 500.4 pence, the highest intraday price since March 7. The stock was at 500.2 pence at 8:21 a.m. London time. BP's U.S.-traded shares rose 2 percent after the MOEX announcement on Feb. 17, which came when trading in London had closed.

The MOEX settlement doesn't affect claims against or potential recoveries from other companies over the spill, the U.S. Justice Department said Feb 17. MOEX, a unit of Tokyo-based Mitsui, no longer owns a share of the lease.

Well Ownership

BP had a 65 percent interest in the Macondo well, MOEX had 10 percent and Anadarko Petroleum Corp. (APC) had a 25 percent stake. The settlement suggests that Anadarko will be liable for about $225 million in Clean Water Act fines if the terms are the same, Gheit said.

"We can't really read across anything with certainty," said Jason Kenney, an analyst at Banco Santander SA (SAN) in Edinburgh. "But this implies that a settlement is possible and perhaps more likely for others, too."

The settlement is the first of what may be a series of agreements with the U.S. as lawsuits over the 2010 spill approach a trial set for Feb. 27. The U.S. Justice Department sued MOEX, BP, Anadarko and Transocean Ltd. (RIG), which owned the rig that exploded, in December 2010, seeking fines for each barrel of oil discharged.

New Orleans Trial

U.S. District Judge Carl Barbier in New Orleans, who's overseeing much of the spill litigation, has scheduled a non- jury trial to determine liability and apportion fault for the disaster.

A U.S. motion to hold BP, Anadarko and Transocean liable by law for Clean Water Act violations is pending before Barbier. A ruling against the defendants would allow the U.S. to seek fines against each company of as much as $1,100 per barrel of oil spilled, without having to prove the issue of liability at trial.

The Clean Water Act also allows the government to seek fines of as much as $4,300 for each spilled barrel on a finding of gross negligence. The government estimates that 4.1 million barrels were spilled before the well was capped, putting BP at risk of fines of as much as $17.6 billion.

Set Aside

BP set aside $3.5 billion for Clean Water Act fines, assuming $1,100 a barrel and its own estimate of 3.2 million barrels spilled, according to an annual report extract posted on the company website. The company is negotiating with the U.S. over settlement of the Clean Water Act claims, according to a person familiar with the talks.

Daren Beaudo, a BP spokesman in Houston, declined to comment on Feb. 17 on the MOEX settlement or any possible BP agreement with the U.S. on pollution law claims.

"You cannot extrapolate a number for BP, but it is positive in both being proportionate and timely," said Stuart Joyner, an analyst at Investec Securities Ltd. in London. "It suggests a moderate to good chance of a settlement pre- commencement of the hearings on the 27th."

Source: Bloomberg