BP shuts down largest U.S. oil field

BP America Chairman and President Bob Malone said Prudhoe Bay will not resume operating until the company and government regulators are satisfied it can run safely without threatening the environment.

“We regret that it is necessary to take this action and we apologize to the nation and the State of Alaska for the adverse impacts it will cause,” Malone said in a statement.

The troubles at the Alaskan oil field add to other problems for BP in the United States, where the company is the largest oil producer, following an explosion at its Texas City refinery that killed 15 workers in March 2005 and a trading scandal.

The shutdown comes six months after the North Slope’s biggest ever oil spill was discovered on a Prudhoe Bay transit line. Some 267,000 gallons of oil spilled. BP installed a bypass on that line in April with plans to replace the pipe. Only one of BP’s three transit lines is now operating.

BP puts millions of gallons of corrosion inhibitor into the Prudhoe Bay lines each year. It also examines pipes by taking X-rays and ultrasound images.

BP has a 26 percent stake in the Prudhoe Bay field, meaning its own production would be cut by 100,000 barrels a day, or around 2.5 percent of the company’s worldwide production, said spokesman David Nicholas. He declined to provide any forecast on the impact of the shutdown on earnings.

Even a short shutdown of Prudhoe Bay could be crippling to Alaska’s economy.

Alaska House Speaker John Harris said it was admirable that BP took immediate action, although it’s sure to hurt state coffers. “This state cannot afford to have another Exxon Valdez,” said Harris, R-Valdez.

The Exxon Valdez tanker emptied 11 million gallons of crude oil into Prince William Sound in 1989, killing hundreds of thousands of birds and marine animals and soiling more than 1,200 miles of rocky beach in nation’s largest oil spill.

BP trouble spots ALASKA: BP is shutting down its Prudhoe Bay oil field in Alaska following the discovery of a corroded pipeline. The move takes 400,000 barrels a day off the market. BP is already facing a criminal investigation over a March spill of some 267,000 gallons of oil at the same field. TEXAS: BP and U.S. officials are investigating the death of a contractor last month at the Texas City refinery where 15 workers were killed and more than 170 were injured in an explosion last year. That accident led to a $21.4 million fine by regulators who said they found more than 300 willful or serious violations of health and safety regulations. BP has set aside $700 million for compensation claims. GULF OF MEXICO: The $1 billion Thunder Horse platform, left listing by a hurricane in 2004, is now set to begin production early next year, instead of the second half of this year. REGULATORY: U.S investigators allege that BP traders cornered the U.S. propane market in the winter of 2004 to manipulate prices, which drove up heating costs for rural consumers. The company has denied any wrongdoing but has called in external auditors to review compliance systems. Associated Press

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