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Authorizations for Expenditures (“AFEs”), which included written descriptions
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of the project and cost estimates for proposed well activities and operations.

Under their operating agreement with BP, Anadarko and MOEX could
choose to participate in the activities and operations described in the AFE and
thereby commit to the funding necessary to continue the operation; they could
propose an alternative operating plan; or they could end their participation in the
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Macondo project.

BP submitted to Anadarko and MOEX an initial AFE for the Macondo
well in August 2009, estimating that the total costs of the well would be about
$96.1 million. Both Anadarko and MOEX approved the operation and
expenditures. BP sought its first supplemental AFE for approval of an
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additional $27.9 million in January 2010, which the partners accepted in February
2010. In March 2010, BP sought authorization for an additional $27 million,
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explaining that it had exceeded the first supplemental AFE due to unexpected
lost circulation and well control events. Anadarko and MOEX approved the
55
56
expenditure and offered no alternative operating plan.

On April 14, after BP had drilled to the Macondo well’s revised target
depth, it sought a final AFE for $3.5 million to fund setting the production casing
in connection with the temporary abandonment of the well. Anadarko and
MOEX approved the AFE and did not propose any alternative operating plan.
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In total, the companies allocated $154.5 million to drilling the Macondo
exploratory well, an amount well in excess of the original estimated cost of
$96.16 million and the not‐to‐exceed cost of $139.5 million.

Under their operating agreement with BP, Anadarko and MOEX had
access to, and in fact reviewed, data and files related to the Macondo well that BP
made available to them through shared websites. The Panel found no evidence,
other than reviewing this information and approving the AFEs, indicating that

51 BP‐HZN‐MBI000173275.
52 BP‐HZN‐MBI‐00173275.
53 BP‐HZN‐MBI00192546, BP‐HZN‐MBI00192549.
54 BP‐HZN‐MBI00192552, BP‐HZN‐MBI00192553.
55 BP‐HZN‐MBI00192557.
56 BP‐HZN‐MBI00192558.
57 BP‐HZN‐MBI00192559, BP‐HZN‐MBI00192561.

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