BP 'knew of Texas risk'

Board directors of oil giant BP knew about the link between spending cuts and poor maintenance at its Texas City oil refinery a year and a half before the fatal accident which killed 15 workers, it was reported today.

An internal presentation to John Manzoni, chief executive for refining and marketing, in November 2003 linked a ’history of reduced investment’ with ’poor maintenance practices’ at the Texas refinery before the explosion in March 2005, the Observer newspaper said.

The presentation said fixed costs peaked at $727m in the early 1990s before falling to $347m in 1999.

The document, obtained by lawyers representing victims of the accident, said the refinery “remained in the lowest percentile grouping for operational availability”, the Observer claims.

On Tuesday US Chemical Safety and Hazards Board investigators are due to publish their final report into the explosion after a two-year probe. The investigators will focus on problems with the “mechanical integrity” of the plant, according to the report.

In January, an inquiry into BP’s refineries chaired by former US secretary of state James Baker in the aftermath of the accident, said the company emphasised personal safety “but BP did not emphasise process safety”.

Mr Baker found there was “a lack of operating discipline, toleration of serious deviations from safe operating practices, and apparent complacency toward serious process safety risks” and called for an overhaul of the way BP operates.

A BP spokesman said today: “At the time of the Baker report in January it was made clear there was no link between spending cuts and impact on safety.”

Lord Browne, BP chief executive, is stepping down as head of the oil company at the end of July after 40 years with the firm.

Alongside the Texas City investigation, the discovery of pipeline corrosion forced BP into the partial closure of Prudhoe Bay, the largest field in the United States, last August.

Despite the problems the company still made profits of $22.25bn during 2006.