BP 2010 Annual Report Download - page 134
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Please find page 134 of the 2010 BP annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Additionalinformationforshareholders
actions(thedirectandindirectpurchasers)hasreceivednalcourtapproval.
Twoindependentlawsuitsfromclassmemberswhooptedoutofthedirect
purchasersettlementarestillpending.
On23March2005,anexplosionandreoccurredinthe
isomerizationunitofBPProducts’TexasCityreneryastheunitwas
comingoutofplannedmaintenance.Fifteenworkersdiedintheincident
andmanyotherswereinjured.BPProductshasresolvedallcivilinjury
claimsarisingfromtheMarch2005incident.
InMarch2007,theUSChemicalSafetyandHazardInvestigation
Board(CSB)issuedareportontheincident.Thereportcontained
recommendationstotheTexasCityreneryandtotheboardofdirectorsof
BP.InMay2007,BPrespondedtotheCSB’srecommendations.BPand
theCSBwillcontinuetodiscussBP’sresponseswiththeobjectiveofthe
CSB’sagreeingtocloseoutitsrecommendations.
On25October2007,theDoJannouncedthatithadenteredintoa
criminalpleaagreementwithBPProductsrelatedtotheMarch2005
explosionandre.On4February2008,BPProductspleadedguilty,
pursuanttothepleaagreement,toonefelonyviolationoftherisk
managementplanningregulationspromulgatedundertheUSCleanAirAct
(CAA)andon12March2009,thecourtacceptedthepleaagreement.In
connectionwiththepleaagreement,BPProductspaida$50-million
criminalneandwassentencedtothreeyears’probationwhichissetto
expireon12March2012.Compliancewitha2005USOccupationalSafety
andHealthAdministration(OSHA)settlementagreement(2005
Agreement)anda2006agreedorderenteredintobyBPProductswiththe
TexasCommissiononEnvironmentalQuality(TCEQ)areconditionsof
probation.
TheTexasOfceofAttorneyGeneral,onbehalfofTCEQ,hasleda
petitionagainstBPProductsassertingcertainairemissionsandreporting
violationsattheTexasCityreneryfrom2005to2010,includinginrelation
totheMarch2005explosionandre.BPiscontestingthepetitionina
pendingcivilproceeding.InMarch2010,TCEQnotiedtheDoJofitsbelief
thatcertainoftheallegedviolationsmayviolatethe25October2007plea
agreement.
On9August2010,theTexasAttorneyGeneralledaseparate
petitionagainstBPProductsassertingemissionsviolationsrelatingtoa
6April2010compressorreandsubsequentaringeventattheTexasCity
renery’sultracrackerunit.Thisemissionseventisalsothesubjectofa
numberofcivilsuitsbymanyareaworkersandresidentsallegingpersonal
injuryandpropertydamagesandseekingsubstantialdamages.
InSeptember2009,BPProductsledapetitiontoclarifyspecic
requiredactionsanddeadlinesunderthe2005AgreementwithOSHA.That
agreementresolvedcitationsissuedinconnectionwiththeMarch2005
TexasCityreneryexplosion.OSHAdeniedBPProducts’petition.
InOctober2009OSHAissuedcitationstotheTexasCityrenery
seekingatotalof$87.4millionincivilpenaltiesforallegedviolationsofthe
2005Agreementandallegedprocesssafetymanagementviolations.
BPProductscontestedthesecitations.Thesemattersweresubsequently
transferredforreviewtotheOccupationalSafetyandHealth(OSH)Review
Commission.
AsettlementagreementbetweenBPProductsandOSHAin
August2010(2010Agreement)resolvedthepetitionledbyBPProducts
inSeptember2009andtheallegedviolationsofthe2005Agreement.
BPProductshaspaidapenaltyof$50.6millioninthatmatterandagreedto
performcertainabatementactions.Compliancewiththe2010Agreement
(whichissettoexpireon12March2012)isalsoaconditionofprobation
duetothelinkagebetweenthis2010Agreementandthe2005Agreement.
On6May2010,certainpersonsqualifyingundertheUSCrime
VictimsRightsActasvictimsinrelationtotheTexasCitypleaagreement
requestedthatthefederalcourtrevokeBPProducts’probationbasedon
allegedviolationsoftheCourt’sconditionsofprobation.Thealleged
violationsofprobationrelatetotheallegedfailuretocomplywiththe
2005Agreement.
TheOSHAprocesssafetymanagementcitationsissuedinOctober
2009werenotresolvedbytheAugust2010settlementagreement.The
proposedpenaltiesinthatmatterare$30.7million.Thematteriscurrently
beforetheOSHReviewCommissionwhichhasassignedanAdministrative
LawJudgeforpurposesofmediation.Thesecitationsdonotallege
violationsofthe2005Agreement.
Ashareholderderivativeactionwasledagainstseveralcurrentandformer
BPofcersanddirectorsbasedonallegedviolationsoftheCAAandOSHA
regulationsattheTexasCityrenerysubsequenttotheMarch2005
explosionandre.AninvestigationbyaspecialcommitteeofBP’sboard
intotheshareholderallegationshasbeencompletedandthecommittee
hasrecommendedthattheallegationsdonotwarrantactionbyBPagainst
theofcersanddirectors.BPhasledamotiontodismisstheshareholder
derivativeaction.
On29November2007,BPExploration(Alaska)Inc.(BPXA)entered
intoacriminalpleaagreementwiththeDoJrelatingtoleaksofcrudeoilin
MarchandAugust2006.BPXA’sguiltyplea,toamisdemeanourviolationof
theUSWaterPollutionControlAct,includedatermofthreeyears’
probation.On29November2009aspillofapproximately360barrelsof
crudeoilandproducedwaterwasdiscoveredbeneathalinerunningfroma
wellpadtotheLisburneProcessingCenterinPrudhoeBay,Alaska.On
17November2010,theUSProbationOfcerledapetitioninfederal
districtcourttorevokeBPXA’sprobationbasedonanallegationthatthe
Lisburneeventwasacriminalviolationofstateorfederallaw.Ahearingis
scheduledfortheweekof25April2011.On12May2008,aBPp.l.c.
shareholderledaconsolidatedcomplaintallegingviolationsoffederal
securitieslawonbehalfofaputativeclassofBPp.l.c.shareholdersagainst
BPp.l.c.,BPXA,BPAmerica,andfourofcersofthecompanies,basedon
allegedmisrepresentationsconcerningtheintegrityofthePrudhoeBay
pipelinebeforeitsshutdownon6August2006.On8February2010,the
NinthCircuitCourtofAppealsacceptedBP’sappealfromadecisionofthe
lowercourtgrantinginpartanddenyinginpartBP’smotiontodismissthe
lawsuit.Briengiscompleteandweawaitoralargument.
On31March2009,theDoJledacomplaintagainstBPXAseeking
civilpenaltiesandinjunctivereliefrelatingtothe2006oilreleases.The
complaintallegesthatBPXAviolatedvariousfederalenvironmentaland
pipelinesafetystatutesandassociatedregulationsinconnectionwiththe
tworeleasesanditsmaintenanceandoperationofNorthSlopepipelines.
TheStateofAlaskaalsoledacomplainton31March2009againstBPXA
seekingcivilpenaltiesanddamagesrelatingtotheseevents.Thecomplaint
allegesthatthetworeleasesandBPXA’scorrosionmanagementpractices
violatedvariousstatutory,contractualandcommonlawdutiestotheState,
resultinginpenaltyliability,damagesforlostroyaltiesandtaxes,andliability
forpunitivedamages.
Approximately200lawsuitswereledinstateandfederalcourtsin
Alaskaseekingcompensatoryandpunitivedamagesarisingoutofthe
ExxonValdezoilspillinPrinceWilliamSoundinMarch1989.Mostofthose
suitsnamedExxon(nowExxonMobil),AlyeskaPipelineServiceCompany
(Alyeska),whichoperatestheoilterminalatValdez,andtheotheroil
companiesthatownAlyeska.Alyeskainitiallyrespondedtothespilluntil
theresponsewastakenoverbyExxon.BPownsa46.9%interest(reduced
during2001from50%byasaleof3.1%toPhillips)inAlyeskathrougha
subsidiaryofBPAmericaInc.andbrieyindirectlyownedafurther20%
interestinAlyeskafollowingBP’scombinationwithAtlanticRicheld.
Alyeskaanditsownershavesettledalltheclaimsagainstthemunder
theselawsuits.Exxonhasindicatedthatitmayleaclaimforcontribution
againstAlyeskaforaportionofthecostsanddamagesthatithasincurred.
IfanyclaimsareassertedbyExxonthataffectAlyeskaanditsowners,BP
willdefendtheclaimsvigorously.
132BPAnnualReportandForm20-F2010