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U.S. to announce settlement with BP over Texas City refinery

July 11, 2012, 12:36 pm

HOUSTON (Reuters) - U.S. workplace safety regulators plan to announce a settlement on Thursday with BP Plc's U.S. refining subsidiary over safety violations found at the company's Texas City, Texas, refinery in 2009, according to a statement issued Wednesday.

BP has been trying to sell the nation's sixth-largest refinery and a settlement would make the facility more attractive to potential buyers. Spokesmen for BP and the U.S. Labor Department declined comment.

In 2009, the U.S. Occupational Safety and Health Administration (OSHA) hit BP with $87.4 million in fines for alleged safety violations at the giant Texas City refinery.

In 2010, as it was battling the gigantic Macondo oil spill in the Gulf of Mexico, BP agreed to pay a settlement of $50 million to OSHA for violations related to the 2005 explosion at the refinery that killed 15 workers.

BP and OSHA continued talks for a settlement of the remaining fines.

Brent Coon, a Texas plaintiffs' attorney who led the massive civil litigation against BP stemming from the 2005 refinery explosion, said he knew the company had been involved in "intense negotiations" with OSHA officials "for the last couple of months." He did not know of any details.

The violations were found during inspections by OSHA at the BP refinery in Texas City, which is located about 40 miles southeast of Houston, in the years following the 2005 blast. Most of the violations were problems OSHA said BP had failed to correct after the explosion. The rest were for what OSHA said were new violations.

In March this year, BP finished a three-year probation term that was imposed as part of the single criminal charge to which the company pleaded guilty in the 2005 explosion. BP also paid a $50 million fine. That term required the company to adhere to a 2005 settlement with OSHA.

Coon said federal prosecutors never pulled BP back into court to face possible probation revocation because of the 2009 violations and proposed fines.

"They released BP from probation over our objections in March," Coon said. "We opposed the termination of BP's probation, which said the company had to comply with the OSHA mandate and those violations showed it did not. That alone was a violation of BP's probation, and it should have been revoked then."

BP wants to sell the 400,780 barrel-per-day (bpd) Texas City refinery along with its 240,000-bpd Los Angeles-area refinery in Carson, California, by the end of this year.

In 2005, BP paid a $21.3 million fine to OSHA six months after the explosion.

BP has also paid more $2 billion to settle lawsuits stemming from the blast.

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(Reporting by Erwin Seba and Kristen Hays; Editing by Lisa Shumaker)

 

 
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