US: May 8, 2008


NEW YORK - A dozen oil companies agreed to pay $423 million in cash plus clean-up costs to settle litigation over groundwater contamination from the gasoline additive, MTBE, lawyers representing public water utilities and public agencies in 17 states, told Reuters.


The settlement, filed in the US District Court in Manhattan, involves BP America Inc, Chevron Corp, ConocoPhillips, Shell Oil Co, Marathon Oil Corp, Venezuela's Citgo Petroleum Corp, Sunoco Inc and Valero Energy Corp, the newspaper said.

"The one big holdout was ExxonMobil Corp," said Robert Gordon, of Weitz and Luxenberg, one of the three lead lawyers for the plaintiffs.

Five smaller companies, including Lyondell Petrochemical Corp, the chemical's maker, have not settled.

"The most important thing here is not the money, "but that there is going to be treatment of the wells and the affected areas guaranteed for the next 30 years," Gordon said.

The 2003 lawsuit by public water providers in 17 states was consolidated into a single federal case.

The settlement is "a step in the direction of making the parties responsible for the contamination pay for it rather than the folks who drink the water and pay the rates," said Victor Scher, another of the lead attorneys. "It's a significant development."

MTBE, or methyl tertiary butyl ether, was added to gasoline for some three decades to curb smog emissions.

(Reporting by Leslie Gevirtz, Adam Tanner, Peter Henderson; editing by Jeffrey Benkoe and Andre Grenon)


REUTERS NEWS SERVICE