UPDATE — BP settling its way out of trouble

As we report in this morning’s paper, BP has two big settlements with government regulators pending, a $50 million settlement of criminal allegations related to the deadly March 2005 Texas City refinery explosion and a $300 million settlement of propane market manipulation charges from 2004.
Now it looks like a settlment of a criminal investigation related to two oil pipeline spills in Alaska last year could be announced shortly, too, according to a Chronicle source. The company will plead guilty to a felony environmental charge (as it will in the Texas City case) and pay a fine.

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BP’s Tony Hayward.

All three pending settlements, which have been scheduled to be announced Thursday but could come sooner, appear to be part of new BP CEO Tony Hayward’s efforts to move the company beyond the calamities that plagued the company in the final years of former CEO John Browne.
Even if the settlements go through, that may not be the end of it.
A number of individual propane traders may still face criminal charges, according to sources. And the company said earlier this year it may face civil penalties in connection to its oil and gasoline trading operations. The Wall Street Journal says a civil case against an individual trader may be pending on that front.
And there’s also an ongoing criminal investigation of the several leaks in the oil pipeline system feeding the Trans Alaskan Pipeline in 2006, a system that BP operates.
But back to those propane traders: while ignorance of the law isn’t a defense it appears they may not have been aware their actions were illegal.
As court documents show, notes taken during a Feb. 19, 2004, meeting by the then-chief operating officer of BP’s North American gas and power business, seem to indicate the company didn’t think physical trading of propane was regulated.
A “lessons learned” slide show BP officials put together after the alleged market-cornering incident noted: “No violation under current framework, but could increase the risk of regulatory intervention.”
And it’s not clear the price spike the manuevers created were passed on to end consumers, i.e. homeowners who use propane as a heating fuel, as the original charges and the follow-on class action lawsuits allege. Does that mean damages were just to those wholesale buyers?

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