The reputation of oil giant BP -- and its share price -- took a beating on Thursday when it admitted it was facing a criminal inquiry into a massive oil spill in Alaska.
BP received a subpoena on April 26 from a US federal grand jury in Alaska but only revealed the investigation -- which could lead to prison sentences -- after an internal e-mail was leaked to journalists.
Shares in Britain's biggest company slumped 3 percent in early trading on Thursday on the back of the latest safety problem, which threatens to undermine its carefully crafted image as an environmentally responsible operator.
Revelations about the investigation into the spill of 1.2 million liters of crude into the Prudhoe Bay area follows a fire and 15 deaths at its Texas City refinery and a rig capsizing in the Gulf of Mexico.
There is already another US grand jury investigation into the refinery blast, which injured an estimated 500 staff, and the company has already been fined US$21 million for 300 violations uncovered by the UD Department of Labor.
Environmentalists called the Alaskan spill in March -- the largest ever in the North Slope region -- a "catastrophe."
BP blamed it on internal corrosion creating a 65mm hole.
A BP spokesman said in London on Thursday: "We are fully cooperating with the investigation and we are carrying out our own investigation into what caused the corrosion. We believe that our actions were at all times proper."
If the inquiry goes against BP, the world's second-largest listed oil company could face criminal charges, prison terms and significant fines.
Initial news of the subpoena came after Steve Marshall, BP's head of exploration in Alaska, sent an e-mail to staff saying he had been asked for "a variety of documents and data from BP Alaska concerning the transit line and certain other operational areas."
Marshall urged his staff to treat the matter as confidential and added: "I believe that the information we provide will show that the actions of BP Alaska were, at all times, proper."
The pipeline problems were relatively small compared with Alaska's worst oil spill on March 24, 1989 when the Exxon Valdez tanker ran aground in Prince William Sound, near Anchorage.
About 2,092km of coastline were contaminated by the spill, killing hundreds of thousands of fish, seabirds, otters, seals and whales.
Exxon has always had a troubled relationship with environmental activists but BP has worked hard to cultivate a different one, emphasizing actions to help tackle climate change and promising to go "beyond petroleum."
Allegations of poor safety or maintenance systems are particularly sensitive issues for oil companies at a time when they are making record profits and facing criticism from politicians.
Problems in Alaska will not help oil companies such as BP in their attempts to fight off the threat of higher taxes in the state.
Nor will it help the oil company, led by the chief executive, Lord Browne, win a contract for a ?20 billion (US$37 billion) planned gas link in Alaska.
Fadel Gheit, an analyst with the New York brokerage firm Oppenheimer & Co, said the wave of problems threatened to damage the good standing that BP had developed in the US.
"A company this size with operations all over the world is always vulnerable to things going wrong but a lot seems to have gone wrong in this case and its [good] public image is being eroded," Gheit said.
"BP has sowed seeds of goodwill by bringing in a respected politicians like James Baker at Texas City and has been bombarding the public with green messages through advertising," he said.
"Without this, things could have been much worse but it needs to stop shooting itself in the foot," he said.
A signaling system malfunction disrupted high-speed rail (HSR) services beginning at 8am today, with trains temporarily reduced to three northbound and three southbound trains per hour as authorities conduct inspections. The malfunction occurred on a section of track in Miaoli County during pre-operation checks early this morning, forcing northbound and southbound trains to use a single track, the HSR operator said. The regular schedule has been replaced with three hourly trains offering only nonreserved seating in each direction, stopping at every station, it said, adding that business class cars would still have reserved seating. Departures from terminal stations are scheduled at the top
DRONE CENTRAL: Taiwan aims to become Asia’s democratic hub for drones, with most exports focused on high-quality military-grade models, an official said Taiwan’s drone industry is expected to expand significantly by 2030, producing 100,000 units per month and exporting half of them, the Ministry of Economic Affairs said yesterday. Current drone production capacity is about 15,000 units per month, but the industry can quickly scale up as demand increases, Industrial Development Administration Director-General Chiou Chyou-huey (邱求慧) told a news conference in Taipei. Taiwan’s drone output grew 2.5-fold last year to NT$12.9 billion (US$408.3 million) under a government program to develop the uncrewed vehicle sector, he said. The Executive Yuan in October last year approved plans to invest NT$44.2 billion into domestic production of uncrewed aerial
VERBOSE VESSELS: A CGA cutter and a China Coast Guard exchanged verbal barbs for more than a day in Taiwanese-controlled waters before the Chinese vessel left The Taiwanese and Chinese coast guards had a standoff near the strategically located Pratas Islands (Dongsha Islands, 東沙群島) in the north of the South China Sea, the Coast Guard Administration (CGA) said yesterday. The two sides engaged in intense radio exchanges over sovereignty claims during the 33-hour standoff. China Coast Guard vessel 3501 eventually left the restricted waters, 26.6 nautical miles (49.2km) west of the Pratas Islands, at 5pm yesterday, the CGA said. Lying approximately between southern Taiwan and Hong Kong, the Taiwan-controlled Pratas are seen by some security experts as vulnerable to Chinese attack due to their distance — more than
WARNING: China should stop engaging in actions that undermine regional peace and stability, as it would only build resentment among people across the Strait, the CGA said China has deployed more than 100 navy, coast guard and other vessels in waters from the Yellow Sea to the South China Sea and the western Pacific since US President Donald Trump and Chinese President Xi Jinping (習近平) met in Beijing, National Security Council Secretary-General Joseph Wu (吳釗燮) said yesterday. “In this part of the world, #China is the one & only PROBLEM wrecking the #StatusQuo & threatening regional peace & stability,” Wu wrote on X. In a separate post, he said Beijing was coercing Taiwan’s maritime domain, calling it illegal and provocative, after the Coast Guard Administration (CGA) expelled a
RSS