Status of the Dispute Involving the Oil Spill Incident in the Gulf of Mexico

May 6, 2011 Project

In connection with the oil spill incident that occurred on April 2010 in the Gulf of Mexico on the exploratory block designated Mississippi Canyon 252, last year Transocean and certain of its affiliates (collectively, "Transocean"), the owner and operator of the rig, filed a limitation action based on maritime law in an effort to limit its liability (the "Limitation Action"), and in the Limitation Action, on February 18, 2011, Transocean tendered MOECO, MOEX USA Corporation (a 100% subsidiary of MOECO, "MOEX USA") and MOEX Offshore 2007 LLC (a 100% subsidiary of MOEX USA, "MOEX Offshore"), which owns a 10% working interest in the lease for the relevant block.

On April 19, 20 and 21, 2011, Transocean and the defendants in the Limitation Action filed cross-claims primarily seeking contribution and indemnification from one another, and as a result MOECO, MOEX USA and MOEX Offshore were served with cross-claims by Cameron International Corporation, Halliburton Energy Services, Inc. and Transocean. MOEX Offshore filed cross-claims against BP Exploration and Production, Inc. ("BP"), Transocean, Halliburton, Cameron, M-I LLC and Weatherford U.S. L.P. and certain of their affiliates, asserting that they should bear the responsibility, whether in whole or in part, for the alleged damages and seeking contribution and indemnification.

On April 4, 2011, BP sent a Notice of Dispute to its business partners, MOEX Offshore and Anadarko Petroleum Corporation, based on the Operating Agreement entered into by such parties. The Notice of Dispute states that as of February 28, 2011, BP's invoices to MOEX Offshore totaled approximately U.S. $1,856,000,000. In addition, MOEX Offshore has received invoices from BP after that date. The most recent invoice, dated April 5, 2011, states that MOEX Offshore's payment obligation totals approximately U.S. $2,067,000,000. MOEX Offshore expects to receive additional invoices from BP, but it expects to continue to withhold payment given that at the present time it is uncertain whether there will be an obligation to pay. Based on the Operating Agreement, the parties must designate a representative to meet and confer in an effort to resolve the claim made in the Notice of Dispute. MOEX Offshore has designated a representative. Notably, on April 27, 2011, BP filed a motion to stay MOEX Offshore's cross-claims in the Limitation Action referenced above based on the arbitration clause in the Operating Agreement.

Given that these disputes, the Limitation Action and the civil litigation arising out of the relevant incident are still in their initial stages, even if hypothetically MOEX Offshore and its affiliates might have to bear some responsibility, at the present time it is difficult to make a reasonable estimate of the potential amount of the loss. MOEX Offshore has told us that at the present time it cannot estimate the range of the costs it might have to bear or the potential responsibility of its affiliates in connection with this incident. For that reason, at the present time the impact on MOECO's business results is unknown.