New spills crisis threatens BP

A failure at the Baku-Tbilisi-Ceyhan (BTC) pipeline, hailed by BP chief Lord Browne as 'the first great engineering project of the 21st century', would be disastrous for BP, already rocked by a string of scandals in the US including leaks from the Prudhoe Bay pipeline in Alaska.

Derek Mortimore, an engineer who worked as a consultant on the project, told the Bloomberg news agency that problems on the BTC pipeline have not been addressed properly.

'It's got an in-built flaw,' Mortimore said. He claimed that a coating paint on the buried pipeline's welds is subject to cracking that could allow corrosion.

Mortimore said the coating had cracked even before the pipeline began pumping oil. Attempts to fix the problem had contributed to a cost overrun of almost $1bn (?514m), he said.

BP acknowledges there were issues with the coating but claims they were addressed in 2004.

'I have absolutely no concerns that we have a defective field joint coating,' said David Woodward, who led BP's operations in Azerbaijan for eight years until November.

But a leaked report commissioned by one of the contractors who worked on the project says BP's fix was not sufficient and the coating still cracks.

The report was commissioned by the contractors that built the Azeri pipe sections for BP - a Greek company, Consolidated Contractors International, and British firm Pipeline Induction Heat Ltd.

Critics of BP say recent catastrophes at its US operations raise questions about the firm's assurances.

Last summer the company was forced to shut down half the output from its Prudhoe Bay field in Alaska to fix corrosion problems after a pipeline leaked 200,000 gallons of crude.

'Serious allegations about potentially flawed workmanship that may result in above-normal corrosion rates have been made,' said John Dingell, chairman of the US Congress's Energy and Commerce Committee. 'Our most- recent experience with BP in Alaska suggests more probing may be needed.'

The com pany's once-proud image in the US has taken a battering, not just from the Alaskan leak but from serious safety breaches at its Texas City refinery which resulted in a blast that killed 115 people and injured hundreds more.

The company is also accused of manipulating the propane market, and the Commodity Futures Trading Commission is recommending civil enforcement actions against it for improper trading of unleaded petrol.

Any shutdown of the BTC pipeline would be likely to drive up the oil price, too. When BP closed half its Prudhoe Bay output, the price of oil soared as much as 3.4% to $77.30 a barrel the next day.

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