BP 2008 Annual Report Download - page 94

BP Annual Report and Accounts 2008
Additional information for shareholders
On 25 October 2007, the DOJ announced that it had entered into a
criminal plea agreement with BP Products related to the March 2005
explosion and fire. Following BP Products’ guilty plea on 4 February 2008,
pursuant to the plea agreement, to one felony violation of the risk
management planning regulations promulgated under the US federal
Clean Air Act, a series of appeals were taken by victims of the incident,
who alleged that the plea agreement did not fully take into account the
victims’ injuries. On 7 October 2008, after resolution of those appeals,
BP Products returned to court to argue for acceptance of the guilty plea.
At the plea hearing, the court advised that it would take the matter under
review and decide whether to accept or reject the plea. If the court
accepts the agreement, BP Products will pay a $50 million criminal fine
and serve three years’ probation. Compliance with a 2005 OSHA
settlement agreement and an agreed order entered into by BP Products
with the Texas Commission on Environmental Quality (TCEQ) are
conditions of probation. The TCEQ and the DOJ continue to investigate
certain matters arising from the March 2005 explosion and fire.
On 29 November 2007, BP Exploration (Alaska) Inc. (BPXA)
entered into a criminal plea agreement with the DOJ relating to leaks of
crude oil in March and August 2006. BPXA’s guilty plea, to a
misdemeanour violation of the US Federal Water Pollution Control Act,
included a term of three years’ probation. BPXA is eligible to petition the
court for termination of the probation term if it meets certain benchmarks
relating to replacement of the transit lines, upgrades to its leak detection
system and improvements to its integrity management programme. BPXA
continues to co-operate with a parallel State of Alaska civil investigation
into the March and August 2006 spills, including three separate
subpoenas issued to BPXA by the Alaska Department of Environmental
Conservation. BPXA is also engaged in discussions with the DOJ, the EPA
and the US Department of Transportation concerning a civil enforcement
action relating to the 2006 Prudhoe Bay oil transit line incidents.
Shareholder derivative lawsuits alleging breach of fiduciary duty
that were filed in US federal and state courts against the directors of the
company and others, nominally the company and certain US subsidiaries,
following the events relating to, inter alia, Prudhoe Bay, Texas City and the
trading cases, have been settled (following court approval of the
settlement terms) and the claims have been dismissed.
Approximately 200 lawsuits were filed in state and federal courts
in Alaska seeking compensatory and punitive damages arising out of the
Exxon Valdez oil spill in Prince William Sound in March 1989. Most of
those suits named Exxon (now ExxonMobil), Alyeska Pipeline Service
Company (Alyeska), which operates the oil terminal at Valdez, and the
other oil companies that own Alyeska. Alyeska initially responded to the
spill until the response was taken over by Exxon. BP owns a 46.9%
interest (reduced during 2001 from 50% by a sale of 3.1% to Phillips) in
Alyeska through a subsidiary of BP America Inc. and briefly indirectly
owned a further 20% interest in Alyeska following BP’s combination with
Atlantic Richfield. Alyeska and its owners have settled all the claims
against them under these lawsuits. Exxon has indicated that it may file a
claim for contribution against Alyeska for a portion of the costs and
damages that it has incurred. If any claims are asserted by Exxon that
affect Alyeska and its owners, BP will defend the claims vigorously.
Since 1987, Atlantic Richfield, a subsidiary of BP, has been named
as a co-defendant in numerous lawsuits brought in the US alleging injury
to persons and property caused by lead pigment in paint. The majority of
the lawsuits have been abandoned or dismissed against Atlantic
Richfield. Atlantic Richfield is named in these lawsuits as alleged
successor to International Smelting and Refining and another company
that manufactured lead pigment during the period 1920-1946. Plaintiffs
include individuals and governmental entities. Several of the lawsuits
purport to be class actions. The lawsuits seek various remedies including
compensation to lead-poisoned children, cost to find and remove lead
paint from buildings, medical monitoring and screening programmes,
public warning and education of lead hazards, reimbursement of
government healthcare costs and special education for lead-poisoned
citizens and punitive damages. No lawsuit against Atlantic Richfield has
been settled nor has Atlantic Richfield been subject to a final adverse
judgment in any proceeding. The amounts claimed and, if such suits were
successful, the costs of implementing the remedies sought in the
various cases could be substantial. While it is not possible to predict the
outcome of these legal actions, Atlantic Richfield believes that it has valid
defences and it intends to defend such actions vigorously and that the
incurrence of liability is remote. Consequently, BP believes that the
impact of these lawsuits on the group’s results of operations, financial
position or liquidity will not be material.
In January 2009, the TNK-BP shareholders resolved, or agreed
a process for resolving, all outstanding claims between them, including
those relating to Russian back taxes. The suit filed in Russia by a
minority shareholder in TNK-BP Holding, alleging that an agreement
by BP specialists to provide services to the TNK-BP group is invalid
and demanding repayment of sums paid to BP for such services, has
been withdrawn.
For certain information regarding environmental proceedings,
see Environment – US regional review on page 46.
The offer and listing
Markets and market prices
The primary market for BP’s ordinary shares is the London Stock
Exchange (LSE). BP’s ordinary shares are a constituent element of the
Financial Times Stock Exchange 100 Index. BP’s ordinary shares are also
traded on stock exchanges in France and Germany.
Trading of BP’s shares on the LSE is primarily through the use of
the Stock Exchange Electronic Trading Service (SETS), introduced in 1997
for the largest companies in terms of market capitalization whose
primary listing is the LSE. Under SETS, buy and sell orders at specific
prices may be sent to the exchange electronically by any firm that is a
member of the LSE, on behalf of a client or on behalf of itself acting as a
principal. The orders are then anonymously displayed in the order book.
When there is a match on a buy and a sell order, the trade is executed
and automatically reported to the LSE. Trading is continuous from
8.00 a.m. to 4.30 p.m. UK time but, in the event of a 20% movement in
the share price either way, the LSE may impose a temporary halt in the
trading of that company’s shares in the order book to allow the market to
re-establish equilibrium. Dealings in ordinary shares may also take place
between an investor and a market-maker, via a member firm, outside the
electronic order book.
In the US, the company’s securities are traded in the form of
ADSs, for which JPMorgan Chase Bank is the depositary (the Depositary)
and transfer agent. The Depositary’s principal office is 4 New York Plaza,
Floor 13, New York, NY 10004, US. Each ADS represents six ordinary
shares. ADSs are listed on the New York Stock Exchange. ADSs are
evidenced by American depositary receipts (ADRs), which may be issued
in either certificated or book entry form.
The following table sets forth for the periods indicated the highest
and lowest middle market quotations for BP’s ordinary shares for the
periods shown. These are derived from the Daily Official List of the LSE
and the highest and lowest sales prices of ADSs as reported on the New
York Stock Exchange (NYSE) composite tape.
Additional information for shareholders
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