Take-Nothing Defense Victory For Anadarko in $1 Billion+ Arbitration

Gibbs & Bruns secured a take-nothing defense victory in an arbitration where Claimant DCP NGL Services, LLC (a subsidiary of DCP Midstream) sought more than a billion dollars in damages against our clients, Respondents Anadarko Petroleum Corporation and its subsidiary, Anadarko Energy Services Corporation.

In 2016, Anadarko and DCP entered a Natural Gas Liquids Buy/Sell Agreement under which Anadarko dedicated certain NGL production from its Delaware Basin assets to DCP for transport on a DCP NGL pipeline.  Occidental Petroleum acquired Anadarko in 2019.  After that acquisition, DCP asserted that, by operation of the “Affiliates” definition in the Buy/Sell Agreement, Anadarko was obligated to cause Oxy to dedicate NGLs produced from Oxy’s own preexisting Delaware Basin assets to DCP.  DCP’s interpretation of the agreement would have substantially increased the volumes anticipated under the contract (at a time when the agreement’s transportation rate was out-of-market).  Anadarko disagreed with DCP’s interpretation, and the dispute proceeded to binding arbitration under the CPR Rules.  DCP sought more than $1 billion in damages for the alleged failure to dedicate Oxy’s NGL volumes. 

After extensive discovery and briefing, the matter proceeded to a 10-day final evidentiary hearing before a tribunal of three distinguished oil-and-gas arbitrators.  Following post-hearing briefs, the tribunal entered a Final Award ordering that DCP take nothing.  The Final Award was confirmed in Harris County District Court on November 27, 2023

Barrett Reasoner, Ross MacDonald, Justin Patrick, and Caitlyn Cowan represented Anadarko; Selendy Gay Elsberg PLLC served as co-counsel.

CPR Arbitration No. G-21-54-S, DCP NGL Services, LLC v. Anadarko Petroleum Corporation and Anadarko Energy Services Corporation