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Aberdeen Press & Journal: Top BP bosses facing action over pipelines

17 August 2006

OIL giant BP faced fresh controversy yesterday after shareholders filed a lawsuit against senior executives following the partial shutdown of its Prudhoe Bay oil field in Alaska.

BP was forced to slash production at Prudhoe Bay – the largest oil field in the US – after the discovery of corrosion in pipelines last week.

Highly respected BP chief executive Lord Browne of Madingley and other senior executives now face legal action after shareholders alleged the company knew about the pipeline corrosion for years.

The shareholders claim BP took no substantial steps to properly monitor and repair the pipes, which ferry oil straight into the 800-mile trans-Alaska pipeline. The closure has more than halved the field’s daily 400,000-barrel output.

Oil from Prudhoe Bay makes up about 8% of US oil supply.

The lawsuit, filed in New York on Monday, is the latest problem to blight BP’s Alaskan operations after a criminal investigation was launched into a major leak that spilled 267,000 gallons of oil across the north slope of Prudhoe Bay in March. It names Lord Browne and more than a dozen other top BP executives as defendants.

It seeks unspecified damages and was brought by investor Sue Pincus on behalf of BP shareholders “to remedy the severe harm caused to the company by its senior officers’ and directors’ mismanagement and neglect”.

It alleges the defendants “became aware of the problem of corrosion in the pipeline years ago, but took no substantial steps to remedy the situation”.

The suit also claims that ex¬ecutives chose to “squeeze out every last penny in current profits at the expense of properly and safely maintaining the pipeline and the company’s future profitability”.

A BP spokesman said the company did not comment on pending litigation.

BP estimates the costs for repairing leaks and corrosion along 16 miles of pipeline will reach almost £90million.

It has not disclosed how much will be contributed by the field’s other owners, Conoco Phillips and ExxonMobil.

No timeframe for restarting the eastern half of Prudhoe Bay has been announced. BP said at first it would shut down the entire field but has continued to operate the western sector after US reg¬ulators gave their approval.

Yesterday, it emerged that BP faced another problem in Alaska after it admitted it had to close down its 20,000 barrels per day Point Mclntyre oil field tomorrow.

A BP spokesman said that a surge of pressure during re-pressurisation of the pipeline connecting the field to the trans-Alaska pipeline had caused part of the fine to fall off its supports on to the ground.

He added that there had been no spillage or injuries and BP would now remount the pipeline and inspect it to determine the damage.

Point Mclntyre is north of Prudhoe Bay but is considered part of the Greater Prudhoe Bay operating unit. BP shares shed 1% last night to close at 608p. and its also non-profit sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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