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Baker report: BP’s top management to blame

Steve Tripoli Jan 15, 2007

TESS VIGELAND: First, to another company in a different kind of trouble: British oil giant BP.

An explosion at its Texas refinery killed 15 people in 2005. Then there was that massive pipeline leak that forced the company to shut down its facilities in Alaska last year.

Those problems and more will get a public dissection tomorrow.The Financial Times of London says an investigation headed by former U.S. Secretary of State James Baker will point fingers all the way to the top at BP. Marketplace’s Steve Tripoli has the story.

STEVE TRIPOLI: First, there was the Texas explosion. Then, the Alaska pipeline problems. And before that, a string of problems at BP gas stations.

Barbara Shook of the research firm Energy Intelligence Group says BP has a shake-up coming.

BARBARA SHOOK: It’s a company that has basically failed to enforce its own internal control systems.

BP Chief Executive John Browne’s already a casualty. He announced on Friday that he’ll end his tenure 18 months early. That sent BP’s stock price up.

Carolyn Merritt heads the U.S. Chemical Safety Board, a federal agency that investigates chemical accidents. The board has already said that BP chose to cut costs at its Texas refinery before the explosion, but after board members knew of possible safety problems there. Merritt says tomorrow’s report reaches beyond BP.

CAROLYN MERRITT: It’s gonna be a very significant report, and I think a road map that other companies can take to look at their own safety culture.

Does that mean other companies are running safety risks?

MERRITT: Well, you know the complacency to these growing risks is certainly something that we see when we do our investigations. So it’s not abnormal to see this in big and small companies alike.

Barbara Shook of Energy Intelligence Group says BP managers should brace for some pain.

SHOOK: I think the people at BP better be prepared for some significant changes in internal management. I would not be surprised to see some executives brought in from outside, from companies that are known to be much more stringent in their rules and regulations.

The Chemical Safety Board’s Carolyn Merritt says the rest of the worldwide oil and chemical industry would do well to take heed.

I’m Steve Tripoli for Marketplace.

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