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BP to pay $373 million to end cases

October 26, 2007|From the Associated Press

HOUSTON — BP is taking a multimillion-dollar broom to sweep away a slew of federal charges linked to energy price fixing, a deadly refinery blast and pipeline leaks and focus on its energy business.

The more than $373 million in settlements announced Thursday are part of BP's attempt to rid itself of problems from the stewardship of former Chief Executive John Browne and move ahead with the restructuring of Europe's second-largest oil firm.

On top of the fines and restitution, four former BP employees were indicted by a federal grand jury in Chicago on 20 counts of mail and wire fraud connected to a scheme to manipulate energy markets.

The bulk of the fines -- $303.5 million -- is punishment for BP's conspiring to fix propane prices in 2003 and 2004.

London-based BP also agreed to pay a $50-million fine and plead guilty to a felony for its role in a 2005 explosion at its Texas City refinery that killed 15 employees and injured more than 170.

Additionally, it will pay $20 million in criminal fines and restitution to Alaska and the National Fish and Wildlife Foundation for pipeline leaks and spills at Alaska's Prudhoe Bay, the nation's largest oil field.

The settlements were made public at Justice Department news conferences in Washington and Houston.

The chairman of the House Energy and Commerce Committee, Rep. John D. Dingell, criticized the amount BP will pay to settle the Texas City charge. "I note with curiosity that when an average citizen commits a felony it usually leads to a prison sentence. Yet, apparently, when a big oil company commits a felony that causes 15 deaths, it pays a criminal penalty equal to less than a day's corporate profits," the Michigan Democrat said.

BP reported an adjusted net profit of $22 billion in 2006, or about $60 million per day.

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