US: BP shuts leaking Alaskan wells

BP's image today suffered another blow as the British oil giant closed the last 12 of 57 oil wells in Alaska that had been leaking.

The closures, mostly in Prudhoe Bay, followed daily inspections. The wells themselves were not leaking but insulating agents - similar to car anti-freeze - between the wells and the ice were. Called arctic packs, the insulating material consists of crude oil or diesel fuel.

BP said it had decided to be overly cautious by shutting down the 12 wells. The company has 2,000 wells so the closure will have limited impact on production, less than 10,000 barrels.

"We decided on an abundance of caution to shut down and reconfigure the integrity of 12 operating North Slope wells," a BP official told the Associated Press. "We have no reason to believe that continued operation poses a risk to workers or the environment."

BP said the problem came to light in the course of daily monitoring, but the Financial Times said the closures came only after workers at Prudhoe Bay told the paper.

A typical well has about 168 barrels of material to guard against freezing. Ten of the wells were in Prudhoe Bay, one was at Milne Point and another was at Northstar.

All but one of the wells was shut down by yesterday. The shutdown affected about 8,000 barrels a day out of a total North Slope daily production of about 800,000 barrels, BP said.

This is the latest blow for BP, which prides itself on its environmentally friendly policies. The company last month admitted it was facing a criminal inquiry into a massive oil spill in Alaska.

The spill followed a rupture of a corroded oil pipeline at the Prudhoe Bay field, spilling at least 200,000 gallons of crude oil in March, the largest ever in Alaska's North Slope region.

Following the incident, BP received a subpoena on April 26 from a federal grand jury in Alaska but only revealed the investigation, which could lead to prison sentences, after an internal email was leaked to journalists.

The company is also facing a US lawsuit alleging that it made large profits by cornering the propane market. The US authorities have accused BP of buying up large amounts of propane in February 2004. The move pushed prices up by more than 40% to about 90 cents a gallon and netted BP £20m in profits, the US authorities say.

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