BP's Alaska subsidiary must meet specific maintenance schedules and provide regulators documentation that the work is being done, the U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration said in an April 27 order to BP. The agency, which enforces oil pipeline regulations, amended a corrective action order initially issued in March 2006 requiring London-based BP, Europe's second-largest oil company, to improve the safety of its North Slope pipelines.
BP has to take ``additional measures to monitor and control corrosion'' on the Prudhoe Bay pipelines to prevent another spill, Jeffery D. Wiese, the agency's acting associate administrator for pipeline safety, said in the amended order. ``Continued operation'' of the pipelines, ``without additional corrective measures, will be hazardous to life, property and the environment,'' he said.
BP's reputation was battered by the Alaska spills, allegations of oil and propane trading manipulation and a March 2005 explosion at its Texas refinery that killed 15 and injured hundreds. BP's Chief Executive Officer John Browne stepped down May 1, three months earlier than planned, after losing a legal battle to prevent the publication of claims he let a former boyfriend use company resources.
The Prudhoe Bay oil spills set off investigations by the Anchorage, Alaska, office of the U.S. Attorney and a subcommittee of the U.S. House of Representatives, as well as the corrective action by the pipeline safety agency.
BP Cooperating
BP Alaska is cooperating with the amended order, company spokesman Daren Beaudo said in an interview. The new order ``codifies many of the actions we've already taken,'' he said.
BP is adding staff to its corrosion-monitoring program, replacing 16 miles of worn pipeline, including the segments that leaked last year, and increasing its operations and maintenance budget at Prudhoe Bay from $225 million in 2006 to an estimated $313 million this year, Beaudo said. BP plans to increase the budget in 2008 to about $462 million, he said.
Corroded pipelines were the cause of two oil spills last year at Prudhoe Bay, which provides 8 percent of U.S. domestic oil production. The second, in August, prompted BP to shut production at half of the Prudhoe Bay oil field. Normal production resumed in October.
BP told pipeline safety agency officials that several problems contributed to last year's pipeline failures, including deficiencies in risk-assessment practices, a lack of accountability and the company's overall corporate culture, according to the April 27 order.
Safety Issues `Immediate'
In the amended order, Wiese described the safety issues as ``immediate'' and called on BP to aggressively inspect pipelines for corrosion and share its findings with regulators. It was the third time the agency amended the corrective action order.
The agency's April 27 order requires BP to submit monthly written reports on its progress with rebuilding pipelines and to provide 60-days notice to the agency of any major changes in the project's design or schedule.
The agency also ordered BP to perform daily measurements of sediment and water in the pipelines at seven locations and to perform an internal inspection in three pipeline segments by Nov. 13.
In some cases, the order requires BP to provide data within 24 hours after an inspection.
Running the oilfield safely will require ``fundamental changes'' in the company's risk-assessment practices and safety decision-making processes, Wiese said in the order.
Beaudo said BP already is making those changes. ``I can tell you that we have stepped up our game,'' he said.
