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ANCHORAGE, Alaska -- A unit of major oil company BP Plc, BP Exploration Alaska Inc. (BPXA), pled guilty yesterday to violating federal environmental law, and sought court approval of a $20 million fine for the 200,000-gallon oil spill in March 2006 from a corroded Prudhoe Bay pipeline in Alaska, Reuters reported.
The plea deal -- the largest on record for the North Slope of Alaska -- is part of a wider settlement agreement, which was announced last month by the U.S. Justice Department and the London-based oil giant, the report stated.
In addition to yesterday's events, the settlement includes charges related to the 2005 refinery explosion at its Texas City, Texas refinery and propane-market manipulations by BP traders, according to the report.
The guilty plea, along with a sentencing hearing in U.S. District Court in Alaska, is expected to close the criminal case against BP for the oil spill, Reuters reported.
A memorandum cited by Reuters, which was filed earlier this week by the Justice Department, stated cost-cutting by the company lead to inadequate maintenance in the pipelines at Prudhoe Bay, even through the company was aware that an increasing amount of sediment-heavy viscous oil was flowing through the lines, and standard industry practice calls for the cleaning "pigs" to be ran in pipelines as often as every month, according to the report.
In addition to the Justice Department document, newly released photos showed a cross section of the corroded pipe with a half a foot of sediment, which had settled there over the years when BP failed to do any cleaning, Reuters reported.
"By any measure, waiting a period of eight years to run these devices was negligent in light of the conditions known to BPXA," Reuters quoted the government's sentencing memorandum as stating. "Cost-cutting was the emphasis for operation of the Greater Prudhoe Bay Unit by BPXA for many years without regard for the ever-increasing costs of running an aging oil field."