Millions in settlements being paid by giant BP

first_imgHOUSTON – BP PLC is taking a multimillion dollar broom to sweep away a slew of federal charges linked to energy price fixing, a deadly refinery blast and pipeline leaks and focus on its energy business. The more than $373 million in settlements announced Thursday are part of the company’s attempt to get rid of the problems left over from the stewardship of former chief executive John Browne and move ahead with the recently announced restructuring of Europe’s second-largest oil company. On top of the fines and restitution, four former BP employees were indicted by a federal grand jury in Chicago on 20 counts of mail and wire fraud connected to a scheme to manipulate energy markets. The bulk of the fines – $303.5million – aim to punish BP for conspiring to fix propane prices in 2003 and 2004. AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREGame Center: Chargers at Kansas City Chiefs, Sunday, 10 a.m.London-based BP also agreed to pay a $50 million fine and plead guilty to a felony for its role in a 2005 explosion at its Texas City refinery that killed 15 employees and injured more than 170 others. Additionally, it will pay $20million in criminal fines and restitution to Alaska and the National Fish and Wildlife Foundation for pipeline leaks and spills at Alaska’s Prudhoe Bay, the nation’s largest oil field. The settlements were made public at U.S. Justice Department news conferences in Washington and Houston. “These agreements are an admission that, in these instances, our operations failed to meet our own standards and the requirements of the law,” Bob Malone, president and chairman of Houston-based BP America, said in a statement. “For that, we apologize.” The chairman of the House Energy and Commerce Committee, Rep. John Dingell, criticized the amount BP will pay to settle the Texas City charge. “I note with curiosity that when an average citizen commits a felony it usually leads to a prison sentence. Yet, apparently, when a big oil company commits a felony that causes 15 deaths, it pays a criminal penalty equal to less than a day’s corporate profits,” the Michigan Democrat said. BP reported an adjusted net profit of $22 billion in 2006, or about $60 million per day. The new legal developments come amid a wide-ranging overhaul at a company that’s had more than safety and operational difficulties in recent years. Earlier this year, Browne, the man who transformed BP into one of the world’s top energy companies, resigned in disgrace after 12 years at the helm for admitting he lied to a judge when he tried to block a newspaper from printing allegations of wrongdoing made by a former boyfriend. Tony Hayward, who succeeded Browne on May 1, acknowledged earlier this month that BP had lagged peers in the past few years, and he launched a comprehensive restructuring that includes reducing the number of business units and simplifying management by stripping out some layers. Analysts have said the overhaul would have little short-term impact but positive long-term implications. Indeed, earlier this week, BP reported a 29 percent slump in third-quarter profit because of higher maintenance costs and outages at key refineries, but some analysts said the worst of the company’s operations woes may be behind it. Gary Adams, vice chairman of oil and gas for Deloitte & Touche USA LLP, said it makes perfect sense for a global energy company like BP to want to refocus efforts on its core business – finding, producing and refining oil and natural gas. The global energy business is difficult enough these days, Adams said, as access to new reserves becomes increasingly difficult and costs for materials and services continue to rise. BP is not out from under the federal microscope yet. The U.S. government’s investigation of the company and its executives will continue during a three-year probation period, Acting Attorney General Peter Keisler said Thursday.160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set!last_img

Leave a Reply

Your email address will not be published. Required fields are marked *