BP faces disaster report from Baker panel

NEW YORK (CNNMoney.com) -- A safety panel headed by the former U.S. Secretary of State James Baker III will release its report Tuesday on one of the most serious workplace accidents in decades: BP's multi-fatality explosions at a Texas refinery in 2005.

The panel's report will focus on conditions that led to series of explosions at a BP refinery in Texas City on March 23, 2005, killing 15 workers and injuring 180.

Representatives for London-based BP (up $3.05 to $64.64, Charts) and Baker's firm, Houston-based Baker Bott, would not discuss the report in detail.

"The panel's not going to be releasing information until tomorrow," said John Williams, spokesman for Baker Bott.

"We're not saying anything before it's public," said BP spokesman Robert Wine.

The panel was formed by the the U.S. Chemical Safety and Hazard Investigation Board, a government agency that investigates major workplace accidents. The safety board has already blamed BP's cost-cutting for leading to the disaster, though in news reports BP has denied these charges.

In a statement released on Oct. 31, 2006, the safety board accused BP of knowing about "widespread safety problems" prior to the 2005 accident, and said it was the result of "drastic cost-cutting at the Texas City refinery, where maintenance and infrastructure deteriorated over time, setting the stage for the disaster."

BP has set aside $1.6 billion for settlements related to the accident.

The accident occurred during the restarting of a machine which caused distillation tanks to overflow with flammable liquid, leading to explosions that killed and injured workers at trailers near a vent pipe, according to the safety board.

This is not the only problem to face BP's incoming chief executive, Tony Hayward, currently the head of exploration and production for the company. Hayward is to replace current CEO John Browne when he steps down in July, more than one-and-a-half years earlier than his originally planned departure date.

BP reported on Jan. 9 that its oil and gas output slipped 5 percent in the fourth quarter, 2006, partly because of low production due to corroded pipeline in Alaska and a warm winter. The conditions of the Prudhoe Bay pipeline has led to investigations against the company.

In the U.S., the oil industry is dominated by ExxonMobil (up $1.68 to $72.66, Charts), Chevron (up $1.66 to $70.35, Charts) and ConocoPhillips (up $2.01 to $63.83, Charts).

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