BP's safety record in US under scrutiny again in $200m lawsuit

BP is embroiled in a legal battle in Illinois that, against the backdrop of a big spill in Alaska and a fatal explosion in Texas, could enter the broader debate over whether the UK oil giant has a problem with its US safety culture.

The lawsuit arises from BP's sale for $225 million (€175 million) of an Illinois chemicals plant in 2004 to Flint Hills Resources, which is suing the UK oil group for more than 50 misrepresentations about the plant's environmental compliance, mechanical integrity and production capacities.

BP initiated a federal lawsuit in Chicago last year after Flint Hills, a subsidiary of Koch Industries, claimed that BP had breached the sale agreement, with the UK oil group seeking a declaration by the court that it had done nothing wrong.

"They had ample time to conduct due diligence prior to their purchase," said Scott Dean, BP spokesman.

Yet Flint Hills has counter-sued, seeking compensatory damages with preliminary estimates of about $200 million as well as other legal expenses.

"The plant that BP promised was not the plant that Flint Hills got," the Koch Industries subsidiary alleged.

"Instead of receiving an environmentally compliant, mechanically sound plant ready to immediately increase production capacity, Flint Hills received a plant that required tens of millions [ of dollars] to comply with environmental laws and permits, tens of millions to repair substandard mechanical integrity, and tens of millions to address multiple bottlenecks that constrain production."

Flint Hills alleged that the plant had illegal emissions of air pollutants, corroded tanks that leaked chemicals and badly leaking sewer lines that BP had buried unrepaired ahead of the sale.

"At the time of the sale, the plant was operating under the necessary emissions permits," Mr Dean said.

"The buyer is a sophisticated petrochemical company that knew they were buying a 1950s vintage chemical plant that had ongoing maintenance requirements consistent with its age."

The case, which is set to go to trial in late next year, will play out amid BP's recent problems in the US, which have resulted in heightened regulatory scrutiny and two grand jury investigations that could bring criminal charges against the oil company.