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UK: BP given earlier warning of corrosion

by Sheila McNulty Financial Times
August 8th, 2006

BP's board and London-based executives were informed of widespread corrosion at the UK oil giant's Alaska field two years before the company was forced to shut it this week, citing "unexpectedly severe corrosion".

On May 22 2004, Chuck Hamel, an advocate for BP workers in Alaska, took the charges directly to Dr Walter E. Massey, chairman of the environment committee of BP's non-executive board of directors.

In the letter, Mr Hamel told Dr Massey that in the previous four years BP employees and contract workers had brought to him concerns about safety, health and threats to the environment at Prudhoe Bay, Alaska.

"They seek to see the corrosion problem addressed and corrective action undertaken without further delay and before any of their colleagues at Prudhoe are harmed," he wrote in the letter, a copy of which was given to the Financial Times at the time.

Mr Hamel warned Dr Massey that, as a board member, he owed it to shareholders to investigate. He said he would facilitate interviews with the BP engineers and corrosion experts if his committee provided assurances they would not suffer retaliation.

On July 27 2004, Dr Massey wrote to Mr Hamel urging him to provide BP management "sufficient specificity" but without offering the requested protection.

The workers told Mr Hamel that Vinson Elkins, BP's Houston lawyer, went to Alaska with questions that seemed aimed more at identifying whistleblowers than uncovering corrosion.

Dr Massey referred questions by the FT at the time to BP, which gave assurances that corrosion was under control.

On Tuesday, Ronnie Chappell, BP spokesman, said: "I know there have been concerns raised about adequate corrosion inspection program raised by Hamel over time. We have looked into those."

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