Anchorage (Alaska): Britain's oil major BP Plc said it was closing down the United States' largest oil field indefinitely after the discovery of corrosion and a small leak in a pipeline.
BP (formerly "British Petroleum" and briefly known as "BP Amoco") is a petroleum company headquartered in London, and one of the top four oil companies in the world (along with Shell, ExxonMobil, and Total).
The phased shutdown at the Prudhoe Bay oilfield in northern Alaska was expected to take days and would shut the tap on 400,000 barrels per day in production, the world's second-largest publicly traded oil company announced Sunday night in Anchorage.
BP said it did not know how long the shutdown would last, but the lost production amounts to about eight percent of the US daily output.
The corrosion and leak of four-five barrels of oil on the eastern side of the oilfield "have called into question the condition of the oil transit lines at Prudhoe Bay", Bob Malone, BP American chairman and president, said in a statement.
"We will not resume operation of the field until we and government regulators are satisfied that they can be operated safely and pose no threat to the environment."
The announcement caused oil prices to rise in Singapore as well as in after-hours trading in New York.
The announcement came after 6,400 barrels of crude oil leaked in March from a BP-operated pipeline in the same area of Prudhoe Bay, an incident that is now under investigation by a grand jury.
The leaks were just part of the bad news to hit BP recently. Last year, an explosion at a Texas refinery killed 15 of its employees and saw the company receive the largest fine handed out by US refinery authorities.
US regulators have also accused three BP traders in a trading scandal for allegedly trying to corner the US propane market.
BP, which operates 35 km of pipeline at Prudhoe Bay, said it found the "unexpectedly severe corrosion" in a pipeline scan whose results were delivered Friday.
It found 16 anomalies in 12 locations in the pipeline, prompting BP to carry out on-the-ground inspections, the company said.
It said they discovered the leak and thinning of the pipeline wall that appeared to be over BP's criteria for continued operation.
The pipeline was closed down Sunday morning, the leak was contained and a cleanup operation was under way, the company said.
"We regret that it is necessary to take this action and we apologise to the nation and the state of Alaska for the adverse impacts it will cause," Malone said.
BP America said it was carrying out scans of its other pipelines at Prudhoe Bay and about 40 percent had been completed. The company owns 26 percent of the Prudhoe Bay oilfield while Exxon Mobil and Conoco Phillips each own 36 percent. Chevron and Forest Oil own the remainder.
The shutdown put more pressure on oil prices, which had risen 24 percent this year on violence in the Middle East, the standoff with Iran over its nuclear programme, decreased output from Nigeria because of militant attacks and rising demand from China and India.
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