25th Jul 2006 07:31
BP PLC25 July 2006 July 25, 2006 BP TO PUT INDEPENDENT MEMBERS ON NEW US BOARD AND PLEDGES HIGHER SPEND TO SPEED UP US SAFETY MOVES BP today announced an acceleration of actions to improve the operationalintegrity and monitoring of its US businesses. The company said it would add a further $1 billion to the $6 billion alreadyearmarked over the next four years to upgrade all aspects of safety at its USrefineries and to repair and replace infield pipelines in Alaska. The spend is part of a wide-ranging package of measures aimed at improvingconfidence in the integrity of BP's US operations following a series ofincidents over the past 18 months, including last year's explosion at the TexasCity refinery, the recent oil spill in Alaska and the investigation into propanetrading activity in the US. Speaking in London, BP chief executive Lord Browne said: "These events in our USbusinesses have all caused great shock within the BP Group. They have promptedus to look very critically at what we can learn from ourselves and others and atwhat more we can do in certain key areas to assure ourselves and the outsideworld that our US businesses are consistently operating safely, and with honestyand integrity. "We are, of course, continuing to co-operate to the fullest possible extent withthe US regulatory bodies investigating these events. But we do not believe wecan simply await the outcome of those investigations. In addition to thesignificant steps we have already taken we have decided we must do more now." Browne said it is intended to appoint an advisory board to assist and advise theGroup's wholly-owned US subsidiary, BP America Inc. and its newly-appointedchairman, Robert A. Malone, in monitoring the operations of BP's US businesseswith particular focus on compliance, safety and regulatory affairs. The measures Browne announced today include a step-up in the scale and pace ofspending at BP's five US refineries on maintenance, turnarounds, inspections andstaff training. Spend will now rise to $1.5 billion this year from $1.2 billionin 2005 and will jump further to an average $1.7 billion each year from 2007 to2010. Systems to manage process safety at the refineries will undergo a major upgrade,with some $200 million earmarked to pay for 300 external experts who willconduct comprehensive audits, and re-designs where necessary, of all safetyprocess systems. The new systems are targeted to be installed and working by theend of 2007, a year ahead of the original schedule. Browne said the input of the US Occupational, Safety & Health Administration(OSHA) would be sought throughout the process and that the outcome would mirroror exceed OSHA's requirements. BP today also pledged more rapid action to restore the integrity of its infieldpipelines in Alaska. With corrosion monitoring already upgraded, it now plans toremove pipeline residues - through a process known as 'pigging' - by November,six months ahead of the original schedule. Any necessary bypass lines are being built this summer and BP is making its ownarrangements for the safe disposal of pipeline residues. The work is expected tocost some $50 million and entail the loss of around 40,000 barrels a day ofproduction -11,000 barrels a day BP share - for up to a month. The pipeline which leaked in the recent oil spill has been taken out of serviceand will be replaced by a new line which has already been ordered. If othertransit lines are found to be faulty, they will also be replaced. Browne said a major review by independent external auditors had also been set intrain of the BP's compliance systems in its US trading business. In the wake ofallegations of market manipulation in US propane trading, the auditors willexamine the design of the trading organisation, delegations of authority,standards and guidelines, resources and the effectiveness of control andcompliance. The results of the review will be shared with relevant US regulatoryauthorities and the auditors' recommendations will be urgently acted upon by BP. "The steps taken today, including the appointment of a new advisory board forour US subsidiary, indicate the absolute determination of the BP Group torestore confidence at every level in the conduct of our business in the US,"Browne said. "BP has some 40 per cent of its assets and its staff in the United States and aUS investment programme of around $30 billion over the next five years. We arethe largest indigenous producer of oil and gas combined. It is of vitalimportance to BP and to Americans who depend significantly on us for secureenergy supplies that our US businesses operate to the highest standards ofsafety and integrity." Further information: BP Press Office, London, tel: +44 (0)207 496 4624/4358/4708/4827/5256 - ENDS - This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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