BP told U.S. lawmakers on Thursday that it could restart its giant oil field in Alaska by the end of October after rusty pipelines forced part of the field shut last month, though a former senior BP manager in Alaska refused to testify about the pipeline corrosion.
U.S. Congress members chided BP executives for poor maintenance at the field, the largest in North America, calling the London based company's policies as rusty as its pipelines. The partial shutdown of the field in early August, helped oil prices surge to a record $78.65 a barrel.
Years of neglecting to inspect two of the most vital oil pipelines in this country is simply unacceptable, said Texas Rep. Joe Barton, chairman of the House Energy and Commerce Committee.
Richard Woollam, BP's former head of corrosion management at Prudhoe Bay, asserted his right under the Fifth Amendment of the U.S. Constitution to refrain from giving testimony that could incriminate him.
Woollam was whisked out of the hearing room by his lawyers. BP executives later told lawmakers that he had been out of his Alaska role since early 2005 after a report by the law firm Vincent and Elkins found evidence that senior managers intimidated oil field workers to keep them from blowing the whistle on shoddy maintenance practices.
A source familiar with the Congressional investigation told Reuters that Woollam had only been put on leave from his job with BP in Houston on Wednesday.
BP shut down the eastern half of Prudhoe Bay, the source of 8 percent of U.S. domestic supply, after government ordered tests revealed severe corrosion inside a key pipeline.
BP Alaska President Steve Marshall said BP would be able to get the 400,000 barrel per day field back to full production by the end of October if U.S. regulators approved their plan to reroute oil around leaky pipelines.
That news, along with soaring fuel stockpiles, sent U.S. crude futures to a five-month low of $66.76 per barrel in Thursday trading.
BP's image in the United States has been tarnished by a string of accidents, oil spills and allegations of market manipulation since an explosion at a Texas refinery in March 2005 killed 15 people and injured scores more.
Committee members lambasted BP for failing to detect the corrosion at Prudhoe Bay and questioned the company's commitment to sound operating practices.
Barton, chairman of the House Energy and Commerce Committee, said BP employees had told committee investigators they were worried bosses would blacklist them for cooperating with the probe. He threatened stiff penalties for such intimidation.
I will use every bit of power that I have ... to ensure that the retaliator is prosecuted to the fullest extent of the law, Barton said. Barton's investigations subcommittee has broad powers to probe corporate America.
BP came under a federal criminal investigation in Alaska after the March spill.
Robert Malone, chairman and president of BP America Inc. and the company's top ranking U.S. executive, said BP had fallen short of the high standards we hold for ourselves.
BP, formerly British Petroleum, has marketed itself as friendly to the environment with advertising slogans such as Beyond Petroleum. One lawmaker came up with different labels for the initials.
BP stands for a company with bloated profits that failed to fix broken pipelines, said Democratic Rep. Ed Markey of Massachusetts.
Committee staff visiting Alaska's North Slope to interview BP and Alaska environmental officials found significant problems with BP's maintenance of Prudhoe Bay pipelines, staff aides said on condition of anonymity.
Barton berated BP for neglecting to run mechanical devices known as pigs through its Prudhoe Bay pipelines since at least 1998. The devices detect corrosion and push out sludge.
It seems that BP might have been betting that the field would be depleted before major parts of the pipeline failed and needed replacement, Barton said.
BP shares on the London Stock Exchange fell 11.5 pence on Thursday to 5.89 pounds sterling. Shares on the New York Stock Exchange fell $1.08 to $65.85.
(Additional reporting by Matthew Robinson in New York)