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ANCHORAGE - BP executives and its board of directors were negligent in their oversight of pipelines in the Prudhoe Bay oil field in Alaska, resulting in leaks that damaged the company's reputation while exposing it to millions of dollars in penalties and fines, according to a lawsuit filed on behalf of shareholders.
The more than 100-page lawsuit filed Monday in Superior Court in Anchorage says BP executives and the board breached their fiduciary duties in running U.S. operations for the world's second largest oil and gas producer.
Their conduct, the lawsuit says, damaged BP's reputation; hurt the environment; left BP open to costly lawsuits, penalties and fines; increased
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its operating costs due to burdensome requirements by regulators; and resulted in lost revenues and profits.
It says London-based BP presented itself to shareholders as "an exceptionally progressive, highly ethical and environmentally sensitive corporation, which stressed safety in its operations ..."
"However, the true facts were quite different than these corporate fiduciaries presented to BP's owners - its shareholders," the lawsuit says. "Unfortunately, BP has a long and sordid history of environmental law violations its executives now try to camouflage with a little green and yellow sunburst," a reference to the company's logo.
The lawsuit focuses on recent BP problems, including leaks because of corroded pipes at Prudhoe Bay, a refinery explosion in Texas in which 15 people were killed and investigations into illegal price fixing in the propane market.
Plaintiffs are seeking unspecified damages that could run into the hundreds of millions of dollars, San Diego lawyer William Lerach said Tuesday when reached by telephone in London.
The lawsuit was filed by Unite Here National Retirement Fund that holds 6,000 BP negotiable certificates and Jeffrey Pickett of Anchorage.
"We want to send a message loud and clear to the British Petroleum board that they have to vastly improve their oversight of their North American operations," Lerach said. "This company has a terrible record. It is completely inconsistent with how these folks have said they are running this company."
The lawsuit claims that for years BP was "keenly aware of the corrosion problem," but opted instead to cut costs by skimping on maintenance and inspections to increase profitability in the short-term.
BP Alaska spokesman Daren Beaudo said as a matter of policy, the company does not comment on pending litigation.