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Monterey Herald: BP boosts reserve for Texas blast claims

By JANE WARDELL AP Business Writer
Article Last Updated: 03/04/2008 06:14:31 AM PST

LONDON—BP PLC increased the funds it has set aside to settle claims arising from the 2005 fatal explosion at its Texas City refinery by about a third to $2.13 billion, the energy company said Tuesday.

The company also disclosed that Chief Executive Tony Hayward received a larger bonus in 2007 than the award granted to his predecessor in 2006. But it said he missed out on a long-term share package worth around 2.4 million pounds ($4.8 million) due to the company’s poor past performance.

The disclosures were contained in in its annual report published Tuesday.

The revised figure for claims relating to the Texas City accident, which killed 15 workers, compares with the $1.6 billion provision previously disclosed by the company.

BP said it remained in talks with the U.S. Chemical Safety Board on the final recommendations to be drawn from the accident, following the board’s report a year ago.

“Although BP disagreed with some of the findings and conclusions in the report, BP gave full and careful consideration to the CSB’s recommendations and committed to implement actions in alignment with each of the CSB’s recommendations,” the London-based oil company said in the annual report published on its Web site.

“BP and the CSB continue to discuss BP’s responses with the objective of the CSB agreeing to close out its recommendations,” it added.

The report also revealed that Hayward, who became chief executive in May 2007, was awarded a bonus of 1.26 million pounds ($2.5 million) for 2007. That compared with 900,000 pounds for his predecessor John Browne in 2006.

Hayward launched a comprehensive restructuring of the company in October, following a turbulent year in which its Alaska oil field was partly shut down and the company was fined millions of dollars for environmental crimes and fraud.

Last month, the company that 2007 net profit fell 5.5 percent to $20.8 billion as revenue rose 6.2 percent to $291.4 billion.

In contrast, Royal Dutch Shell PLC, Europe’s largest oil company, reported a 23 percent rise in full-year earnings to a record $31.3 billion while Exxon Mobil Corp. posted the largest ever annual profit by a U.S. company with earnings of $40.6 billion.

BP’s earnings performance meant that the top five directors, including Hayward, missed out on share awards worth a potential 10.7 million pounds ($21.3 million).

The five were granted no shares at all from a possible 2.2 million under the group’s 2005-2007 share incentive scheme, according to the report.

“Performance failed to meet satisfactory levels and consequently no shares will vest in the plan for 2005-07,” it said. and its also non-profit sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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