from MSNBC sent to all lists

BP to face criminal probe over US oil spill
By Sheila McNulty in Houston
Financial Times

Updated: 9:10 p.m. ET June 7, 2006

BP is facing a criminal grand jury investigation into the biggest oil
spill ever on US soil – a corroded transit line that leaked up to 270,000
gallons of crude in Prudhoe Bay, Alaska, triggering investigations by
federal and state agencies.

If the investigation goes against BP the company will face prosecution
which – in the worst case scenario – could result in prison terms,
significant fines and tighter restrictions around BP's operations.

The Financial Times on Wednesday obtained an e-mail from Steve Marshall,
president of BP Alaska, telling staff the UK company had received on
April 26 a subpoena from a federal grand jury in Alaska. The grand jury,
he said, had asked for "a variety of documents and data from BP Alaska
concerning the transit line and certain other operational areas.'' He
urged them to treat the matter as confidential.

The investigation is not only highly unusual for a major oil company but
embarrassing for BP and could result in legal proceedings against the
company and individuals. The company has denied claims it failed to
maintain the transit line, saying it had "manageable corrosion rates" in
the pipeline.

Mr Marshall said BP was fully committed to cooperating and told staff
they may be contacted to assist in helping BP answer the subpoena, also
urging them to cooperate.

Daren Beaudo, BP spokesman, confirmed the message, noting that Mr
Marshall had said: "I believe that the information we provide will show
that the actions of BP Alaska were, at all times, proper.''

The grand jury investigation comes as BP's US operations are under
heightened scrutiny following a string of accidents and regulatory
violations – most notably the March spill in Alaska and an explosion last
year at its Texas City refinery that killed 15 people and injured an
estimated 500.

BP is already facing a grand jury probe in Texas for that accident – at
the company's biggest refinery – meaning it could face legal retributions
from two of its biggest US operations.

Ronnie Chappell, BP's Texas spokesman, declined to comment on the
investigation of the Texas refinery, at which the US Department of Labor
uncovered more than 300 violations, leading to a settlement to improve
processes and pay a maximum allowable $21m fine.

The grand jury probe in Alaska was provoked by Chuck Hamel, an advocate
for oil workers in Alaska, who approached federal criminal investigators
last year with concerns of former BP personnel over malfeasance in the
company's Corrosion Inspection and Control Division.

These workers warned of a spill of the kind that took place in March at
Prudhoe Bay, the US's largest oil field, which Mr Hamel said meant
investigators were not surprised when it happened.

Mr Hamel said on Wednesday he was pleased "for the courageous
whistleblowers that justice will finally prevail".

Their win is Mr Marshall's loss, for in an internal e-mail in 2003, he
warned staff: "Beginning now, we will focus on safety as we have never
focused on it before, as if our lives and our future in Alaska depended
on it. Because they do.''
Copyright The Financial Times Ltd. All rights reserved.

URL: http://www.msnbc.msn.com/id/13190739/ 

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