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BP near crucial Alaska decision; US Congress fumes
Published in Saudi Press Agency on 11 - 08 - 2006


BP Plc. moved toward a key
decision Friday on whether the western half of its giant
Prudhoe Bay oil field will keep pumping, as U.S. lawmakers
castigated the London-based company for letting pipeline
corrosion get out of hand, according to Reuters.
BP's initial decision last Sunday to shut down the entire
Prudhoe Bay field sent U.S. crude oil futures above $77 a
barrel earlier this week -- nearing the all-time record of
$78.40 hit in July.
BP officials now say they want to keep operating the
185,000 bpd western segment if inspections ordered by federal
pipeline regulators turn up no problems.
BP said it will unveil the decision later on Friday, after
getting clearance from federal regulators late on Thursday.
Republicans and Democrats on both sides of the U.S.
Congress called for hearings and federal probes into BP's
decision to shut down the field, which normally produces
400,000 barrels per say (bpd) - 8 percent of U.S. oil output.
U.S. lawmakers are on break until September. But many
reached out from their home districts to register their dismay
with BP, with one eye on upcoming November elections where $3
U.S. gasoline pump prices will be a prominent issue.
Rep. Joe Barton, Texas Republican and head of the House
Energy and Commerce Committee, has called a Sept. 7 hearing
which is expected to feature tough questions and lawmaker ire
directed at BP.
In the Senate, the top members of the Energy Committee this
week urged federal pipeline regulators to probe the corrosion
and hinted at more hearings or legislative action if they don't
get satisfactory answers.
In a heated letter to BP Group Chief Executive John Browne,
Barton said the field shutdown contradicted earlier assurances
BP gave the committee that corrosion found in March was under
control.
"The fact that BP's consistent assurances were not well
grounded is troubling and requires further examination," Barton
said.
Barton told Browne there is "substantial evidence that BP's
chronic neglect directly contributed to the shutdown."
He referred to a raft of other incidents that have spurred
regulatory scrutiny of BP, including a fire at a Texas refinery
that killed 15 people in 2005 and recent allegations by the
Commodity Futures Trading Commission that BP improperly
cornered the U.S. market for propane in 2004.
"This latest incident once again calls into question BP's
commitment to safety, reliability, and responsible stewardship
of America's energy resources," Barton said.
In June, Browne told Reuters in an interview that BP has "a
world-class corrosion monitoring and spill detection system,
much better than required by regulation."
BP "has tried to demonstrate what we thought was a good
program" for controlling pipeline corrosion," said BP spokesman
Neil Chapman.
"What we learned last weekend was that it wasn't good
enough. Now we will spare no expense to fix it," Chapman said.
The discovery of fresh corrosion at Prudhoe Bay this week
came five months after another transit line ruptured on the
western side of the field, spilling at least 200,000 gallons of
crude in the worst onshore spill on the Alaska North Slope.
The oil major has announced plans to replace all 16 miles
of oil transit lines at Prudhoe Bay and has completed placing
orders for new pipe segments.
BP also announced that it has bought over 4.5 million
barrels of crude oil on the open market to supply its two
refineries on the U.S. West Coast.
Output at Prudhoe Bay is currently stable at 155,000 bpd,
explained BP spokesman Scott Dean. The figure includes 17,000
bpd of production from the nearby Lisburne field as well as
natural gas liquids that are injected into the Prudhoe Bay as
well as the 120,000 bpd the company said the field was
producing on Thursday.


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