BP PLC announced today that it has settled its claims against Mitsui & Co. Ltd. over the Deepwater Horizon oil spill.

The Japanese company, which had a 10 percent stake in the Macondo well via a subsidiary, has agreed to pay $1.065 billion, which BP said it would put toward its $20 billion compensation fund for those affected by the spill and for environmental restoration efforts.

The April 20, 2010, explosion led to a spill of an estimated 4.9 million barrels of oil.

Today's agreement only relates to claims between the two companies and falls short of the $2.14 billion BP was hoping to get.

Mitsui, which was involved in the well via its MOEX USA Corp. subsidiary, could still face government penalties and possible punitive damages.

BP has agreed to indemnify Mitsui against any compensatory damages in return for the payment.

The oil giant has yet to resolve similar claims against other Macondo partners and contractors, including Transocean Ltd., which owned the rig; Halliburton Co., the cement contractor on the well; and Anadarko Petroleum Corp., which had a 25 percent stake in the project.

It's an issue BP pointedly noted in its press release, saying it hopes the other companies "contribute appropriately."

Last month, BP sued Transocean, Halliburton and Cameron International Corp., which built the blowout preventer that failed to stop the flow of oil, over their roles in the spill (Greenwire, April 21).

BP Group Chief Executive Bob Dudley praised Mitsui for "showing great corporate citizenship in standing by its affiliate and making a contribution to meet the costs of this tragic accident."

He asked the other companies "to follow the lead" of Mitsui.

In a statement, Mitsui said the agreement means the company "has significantly limited its exposure in this case."

The subsidiary, MOEX, was one of nine companies named in the federal government's civil complaint filed in the aftermath of the spill (E&ENews PM, Dec. 15).

Civil penalties just under the Clean Water Act could be as high as $21 billion if the spill is found to have been caused by negligence.