Saturday, October 31, 2009

BP Fined $87 million by OSHA

BP had two reviews of its 2005 Texas City refinery explosion that killed 15 workers. James A. Baker, III headed up the outside study, while OSHA conducted an internal review. The Baker study blamed a misplaced "culture of safety," while giving BP CEO Lord John Browne a free pass.

Browne landed a job with Carlyle Group joint venture, Riverstone Holdings shortly after Baker released his conclusions. James A. Baker, III has a well established relationship with Carlyle.

BP has a clear track record of postponing maintenance and avoiding safety commitments in the pursuit of profitability. For its Texas City failures, OSHA will fine BP $87 million. BP plans to challenge the citations/fines.

Because BP only made $5 billion this last quarter, it plans to cut 5,000 more jobs in a $1 billion cost savings effort. One expert said:

"Downstream refining margins are still poor but operational improvements and cost take-out have softened the blow."

What prior year cost take-outs led to the Texas City refinery explosion? If current refining margins are poor, did BP do anything to set up the next horrific workplace incident?