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UPDATE 1-BP pleads guilty to violation from Alaska oil spill

Thu Nov 29, 2007 8:23pm EST

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(Adds details from Indiana pollution violation allegation, company comment, background)

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LOS ANGELES, Nov 29 (Reuters) - A unit of BP Plc (BP.L) pleaded guilty on Thursday to a criminal violation of the federal Clean Water Act stemming from a 200,000-gallon oil spill in Alaska's North Slope in March 2006, the U.S. Justice Department said in a statement.

U.S. District Court Judge Ralph Beistline accepted the guilty plea to the one-count information and sentenced British Petroleum Exploration (Alaska) Inc to pay a total of $20 million in criminal penalties related to the spill, which was the North Slope's largest.

That payment includes a $12 million criminal fine, $4 million in community service payments to the National Fish and Wildlife Foundation and $4 million in criminal restitution to the state of Alaska.

The penalty payment resolves BP's liability relating to pipeline spills onto tundra and a frozen lake in the North Slope, the Justice Department said.

BP also will serve a three-year term of probation.

Federal prosecutors had charged that the BP unit failed to heed many red flags that a reasonable operator should have recognized.

British Petroleum Exploration "failed to heed warning signs that would have avoided the corrosion that led to oil spills onto the North Slope," Ronald Tenpas, acting assistant attorney general for the Justice Department's Environment and Natural Resources Division said in a statement.

A BP spokesman confirmed the plea and declined additional comment.

A second leak, in August 2006, was quickly discovered and contained after spilling about 1,000 gallons of oil onto the tundra. Because of BP's immediate spill response and its cooperation with the investigation, it was not charged with the second spill, prosecutors said.

Earlier on Thursday, U.S. regulators notified BP of alleged federal Clean Air Act violations by the energy giant's 410,000 barrel per day (bpd) Whiting, Indiana, refinery.

The U.S. Environmental Protection Agency said BP failed to obtain a permit when it made major modifications in 2005 to the gasoline-producing fluidized catalytic cracking unit, which caused "significant increases of nitrogen oxide, sulfur dioxide, particulate matter and carbon monoxide emissions."

The agency said BP violated rules governing safety flares, exceeded sulfur dioxide pollution limits and failed to monitor emissions from several sources at the refinery.

The EPA also alleged that BP failed to carry out timely performance tests for hydrogen chloride emissions from catalytic reforming units.

A BP spokesman said the company has been cooperating with the agency during its investigation. (Reporting by Lisa Baertlein and Erwin Seba in Houston; Editing by Gary Hill)



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