London-based BP, the world’s third-biggest oil company by market value, said last week it will pump crude oil from only the western half of the Alaskan field while it replaces corroded pipe on the eastern half. BP said it will shut the eastern portion of the Prudhoe field for up to five months, cutting by 50 percent the field’s usual output of 400,000 barrels a day.
The suit filed today in Manhattan federal court accuses top BP executives of harming shareholders by failing to fund needed repairs before they forced the shutdown of half the field. The so-called derivative suit, filed on behalf of the company, seeks undetermined money damages from Browne and other executives.
“Despite their awareness of the dangerous effect of the corrosion in the pipeline, defendants repeatedly failed to fund the work necessary to correct the problem, opting instead to squeeze every last penny in current profits — $7.3 billion last quarter — at the expense of properly and safely maintaining the pipeline,” the suit says.
BP has said it expects repair and replacement costs of as much as $200 million. A message left with a secretary at the BP press office in Anchorage, Alaska, wasn’t immediately returned.