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BP to pay $85m to settle Alaska oil spill case

Washington, May 4, 2011

BP has agreed to pay a $25 million civil penalty plus interest, as well as spend $60 million on enhanced safety measures, to settle a federal probe of a pipeline oil spill on Alaska's North Slope in 2006, the federal government said.

The oil spill in Alaska is one of several environmental and safety problems that have beset BP in the US in recent years, including a deadly explosion at an oil refinery in Texas that killed 15 workers and most recently last year's historic oil spill in the Gulf of Mexico.

In 2006, more than 5,000 barrels of crude leaked onto the snow-covered tundra from a corrosion-eaten hole from BP's pipeline in Prudhoe Bay.

After the pipeline spill, along with another leak five months later, BP replaced its entire Prudhoe Bay transit line system.

As part of the settlement, BP will spend an additional $60 million over three years to address corrosion and other threats to these pipelines.

The Prudhoe Bay accident was the biggest spill on record on the North Slope, Alaska's main oil-producing region, but that spill was dwarfed by the nearly 5 million barrels spewed from BP's ruptured Macondo well last summer.

The British oil giant is still dealing with the fallout from the massive Gulf oil spill, the largest offshore oil spill in US history.

The US government filed a civil lawsuit against BP and its partners on the well in December for the Gulf spill and company faces up to a $21.1 billion in fines under the Clean Water Act.

BP's stock was down about 1 per cent in both New York and London on news of the settlement related to the Prudhoe Bay spill.

The government said the company also violated the Clean Air Act when it improperly removed asbestos-containing materials from its pipelines during the same period.

BP also failed to perform certain corrective actions on its pipelines as ordered by the federal pipeline safety agency. – Reuters




Tags: BP | Settlement | Washington | Alaska oil spill |

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