BP oil spill: company faces Lockerbie accusations as it renews cap tests

Hillary Clinton, the US secretary of state, pledged last night to consider Congressional demands for an investigation into charges that BP lobbied for the release of the Lockerbie bomber as part of an oil-for-terrorist deal. The White House added to the pressure on BP today as it gave the green light to renewed attempts to close valves on the oil company's new tighter-fitting cap over its fractured well in the Gulf of Mexico.

The coast guard commander, Thad Allen, said BP got the all-clear to begin pressure tests today after initial fears that the well pipe would not stand up to additional pressure. Until the cap is fitted, the untamed well continues to spew oil into the Gulf at a rate of 60,000 barrels a day.

With pressure mounting on BP, Clinton responded to reports that it had lobbied the British government for the release of Abdel Basset al-Megrahi to help it clinch lucrative drilling contracts off the coast of Libya. "I have received the letter and we will obviously look into it," she said.

At a press conference, four senators demanded BP put its plans to drill in the Gulf of Sidra on hold unless British and state department investigations clear the company of manoeuvring for Megrahi's release. "It is almost too disgusting to fathom that BP had a possible role in securing the release of the Lockerbie terrorist in return for an oil drilling deal," Charles Schumer, a Democratic senator from New York, told reporters.

Megrahi was convicted in connection with the 1988 bombing of Pan Am flight 103 over Lockerbie in which 270 people died. He was released on compassionate grounds last August after doctors said he was suffering from cancer and had likely only months to live. He is still alive after his transfer to Tripoli. The state department has been sympathetic to anger in the US over Megrahi's release. "There was an expectation from last August that Mr Megrahi had only a few months to live," spokesman PJ Crowley said. "Every day that he lives as a free man, we think is an affront to the families of and victims of Pan Am 103."

Meanwhile, BP's future in America looked precarious as legislation that could ban it from offshore drilling projects for seven years cleared its first hurdle.

The House committee on natural resources yesterday approved a proposal from a California Democrat, George Miller, that would ban oil companies with a history of violating safety and environmental regulations from new drilling projects. "One of the things you should bring to this game is a safety record. You have a company that has had an egregious safety record, a fatal safety record," Miller said.

On paper, companies would be banned if more than 10 workers are killed at any of their facilities or they have been fined more than $10m for polluting waters, over the previous seven years. Companies would also have to prove they have paid in full for any damages or clean-up costs resulting from an oil spill.

In reality, however, this would only apply to BP. The company is expected to face billions in fines for the Gulf disaster, and had a history of safety and environmental violations well before the blow-out in the Gulf of Mexico in April.

Congressional hearings have since zeroed in on BP's history in the US, which include more than 700 safety and environmental violations over the last five years – compared with fewer than 10 for the other big oil companies.

Most of those violations were for projects outside the world of offshore drilling, including a 2005 explosion at a Texas refinery that killed 15 workers and a badly maintained pipeline that spewed 200,000 gallons of oil along Alaska's North Slope.

The ban would not apply to existing leases, and would still allow BP to act as a minority partner on leases. But another amendment, due to be taken up today, would require the government to consider an oil company's safety record before awarding offshore leases rather than choose the highest bidder.

"We allow them to drill no matter what their environmental, safety or public health record may be," Bart Stupak, the Michigan Democrat who proposed the amendment, told a small group at the Platts Energy Forum. "I think we have to give the secretary the discretion to say: 'Look you have got such a history here. You are not going to be allowed to drill unless you clean up your act'."

Stupak said the reports of a Lockerbie bombing link could provoke additional congressional investigations into BP activities. The company is also facing months, if not years, of congressional scrutiny. Stupak added that he expected the investigation to dominate the next chair of the oversight and investigation committee.

BP's Megrahi plea
Claims made by US senators yesterday that BP lobbied for the release of Abdelbaset al-Megrahi, the man convicted of the Lockerbie bombing, as part of an oil-for-terrorist deal are not out of the blue. Last September, the then justice minister, Jack Straw, admitted Britain had been partly motivated by the need to secure fresh oil contracts when ministers tried, in 2007, to make it easier to release Megrahi.

Straw accepted in an interview that he had decided in 2007 to drop his plan to exclude the bomber from a prisoner transfer agreement (PTA) which was being negotiated with Libya. Straw's change of mind followed lobbying by UK oil interests, notably BP, and the Libyan government.

Straw was lobbied on 15 October and 9 November 2007 by Sir Mark Allen, a former MI6 officer, who then worked for BP as a consultant. Libya was stalling on a £500m-plus oil deal with BP.

Documents last year showed Straw originally promised a PTA would only be reached with Libya if Megrahi was excluded. But he later acceded to Libyan demands to include Megrahi. The change followed a warning from BP that not including the bomber could hurt its business interests.

When asked in a Daily Telegraph interview last year if trade and BP were factors, Straw said: "Yes, [it was] a very big part of that. I'm unapologetic about that ... Libya was a rogue state. "We wanted to bring it back into the fold. And yes, that included trade … and subsequently there was the BP deal," Straw said.

A spokesman for BP said the company had raised concerns with the government about the slow progress in concluding the PTA, but denied mentioning Megrahi. Megrahi was released by the Scottish government last year on compassionate ground, because a terminal illness meant he only had a short time to live. But since his return to Libya, he has remained alive. In a further complication, some argue that the evidence used to convict Megrahi was flawed, and that he is in fact innocent of the Lockerbie bombing.

(By Suzanne Goldenberg, The Guardian, 15/07/2010)