Oil pollution at a BP field in Alaska last week has once again damaged the "clean, green" image that the British group has been cultivating for several years.
John Browne, who took the helm of the world's second biggest oil company in 1995, stood out from peers through his commitment to the fight against global warming by reducing greenhouse gas emissions.
BP continued along its green path with the adoption in 2000 of a new logo representing a green and yellow sun and a new slogan, "Beyond Petroleum," that repre-sented its efforts to prepare for the future of energy after oil supplies run out.
Last year, the group announced an investment of US$8 billion in alternative energies such as solar, wind and hydrogen fuel cells over the next 10 years.
That policy, along with patronage of the arts in Britain which detractors see as a pressure tactic, earned Browne a place in the "green" issue of US magazine Vanity Fair in April.
However, BP's image was first tarnished in March last year by an explosion at its Texas City refinery that killed 15 workers and injured more than 170, and resulted in a record fine of US$21.3 million.
One million liters
A year later, a leak in an oil pipeline at the vast Prudhoe Bay field in Alaska spilled up to 1 million liters of crude oil, causing the worst pollution in the region's history.
Following a new, smaller, leak at Prudhoe Bay, BP decided on Aug. 6 to halt production, replace the damaged oil pipeline and inspect others.
On Friday however, the group said it was still producing 120,000 barrels of oil per day from the stricken field and hoped to increase that by about a quarter after completion of a planned maintenance shutdown on an operating center.
When operating at full capacity, Prudhoe Bay pumps out 400,000 barrels of oil a day -- 8 percent of total US daily output.
BP expressed surprise at the level of corrosion behind the leak, presenting the incidents as an unfortunate series of events.
"I don't see anything systematic there. These are very, very unfortunate incidents," said Robert Malone, head of BP in the US.
Local employees had nonetheless been criticizing the management of Prudhoe Bay for some time.
Security consequences
In a letter to Browne dated Jan. 14, 1999, a copy of which was eventually leaked to the media, 77 employees said: "The ongoing reductions in staff would have consequences in the area of security," owing, for example, to a reduction in the number of inspections and routine maintenance.
"When, therefore, will the number of deaths, material damage and production losses be enough for all of that to end," they asked following the deaths of two contract workers.
Complaints increased in August 2002 after an oil well fire seriously burned another employee. Four months later, a man died and two others were injured in a pipeline explosion. The group was fined US$1.3 million.
Critics often highlight what they charge are insufficient means used by BP to maintain the profitability of an ageing field, including high pressure levels within the pipelines despite their natural erosion.
"Prudhoe Bay [operating since 1977] was designed for a life span of about a quarter of a century and we have already exceeded unimaginable production levels," the group's spokesman in Anchorage, Daren Beaudo, admitted last week.
The company is now fronting a barrage of criticism in the US and Europe from ecologists, politicians and corporate investors.
Craig Bennett, from the Friends of the Earth ecological watchdog, slammed "extraordinary" first half profits of around US$12.9 billion at BP, helped in large part by high oil prices.
"If BP had spent more money on the maintenance of its pipes, all of this wouldn't have happened," he said.
Alaska Governor Frank Murkowski said last week that he was considering suing BP for compensation after the company was forced to shut down half of the state's largest oil field because of leaks in a corroded pipe, the Alaska Daily News reported on Thursday.
Murkowski launched an official investigation into the incident and alleged that BP misled the state with satisfactory maintenance reports. He told state legislators that the shutdown was costing the resource-rich state more than US$6.4 million per day in lost tax revenues.
The governor instituted a state hiring freeze because of the financial impact of the shutdown and estimated that the state could lose US$1.3 billion by the time the problems are fixed.
Held accountable
"We will hold British Petroleum accountable for all past and future field management decisions," Murkowski told the Alaskan State legislature.
He ordered the Alaska attorney general to review the state government's legal rights including holding BP fully accountable for the lost revenue.
Murkowski questioned how a company that made US$7.3 billion in profit in the last quarter could manage to skimp on the cost of properly maintaining the vital pipeline.
Murkowski told legislators that his administration will mandate that oil and gas facilities in the state "must be properly maintained at all times."
"Alaska has had a wake up call. With 86 percent of our revenues coming from oil taxes, we are vulnerable to any decline in production," Murkowski said.
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