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UPDATE 4-BP Texas refinery hit with record safety fine

November 1, 2009, 9:18 am

* U.S. OSHA fines BP $87.4 million for safety violations

* $56.7 million stems from 2005 explosion that killed 15

* $30.7 million for 439 new violations found by inspectors

* BP says contesting fines levied by OSHA (Adds union, survivor, victim attorney, US attorney comment, tightens throughout))

By Erwin Seba

HOUSTON, Oct 30 (Reuters) - U.S. safety regulators on Friday hit oil giant BP with a record $87.4- million fine for failing to fix safety violations at its Texas City, Texas, refinery after a deadly 2005 explosion.

In announcing the fines, U.S. Labor Secretary Hilda Solis said old and new safety violations found by the U.S. Occupational Safety and Health Administration at the nation's third largest refinery "could lead to another catastrophe" like the 2005 explosion that killed 15 workers and injured 180.

BP filed a contest to the fine, calling OSHA's actions disappointing as the company believed the Texas City refinery had honored a 2005 agreement with the agency to fix safety problems that led to the blast.

BP said contesting fines will send the dispute to a U.S. administrative law judge for a ruling. BP also has an appeal pending before the Occupational Safety and Health Review Commission, an independent panel that reviews OSHA actions.

"We believe our efforts at the Texas City refinery to improve process safety performance have been among the most strenuous and comprehensive that the refining industry has ever seen," said Texas City Refinery Manager Keith Casey in statement.

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