1 LIONEL Z. GLANCY # 134180 PETER 2 A. BINKOW #173848 MICHAEL M. GOLDBERG # 188669 3 GLANCY BINKOW & GOLDBERG LLP 1801 4 Avenue of the Stars, Suite 311 Los Angeles, California 90067 co 5 Telephone : (310) 201-9150 -n Facsimilie: (310) 201-9160 6 c TJ Email : [email protected] 7 LABATON SUCHAROW LLP C 8 CHRISTOPHER J. KELLER 9 ERIC J. BELFI T -{lJ JAVIER BLEICHMAR (pro hac vice 10 pending) 11 140 Broadway New York, New York 10005 12 Telephone: (212) 907-0700 13 Facsimile: (212) 818-0477 Email: [email protected] 14 15 Counselfor Plaintiffs

16 UNITED STATES DISTRICT COURT 17 CENTRAL DISTRICT OF CALIFORNIA 'T/S 18 BANKINTER GESTION DE ACTIVOS, S.G.I.I.C. ON BEHALF OF CVO8 -0145 8 C1 I 20 19 BK DIVIDENDO THE CITY OF Case No.: EDINBURGH COUNCIL ON 20 BEHALF OF THE LOTHIAN CLASS ACTION COMPLAINT FOR PENSION FUND, FRANKFURT VIOLATIONS OF THE FEDERAL 21 TRUST INVESTMENT- SECURITIES LAWS GESELLSCHAFT MBH 22 FRANKFURTER-SERVICE JURY TRIAL DEMANDED KAPITALANLAGE- 23 GESELLSCHAFT MBH, AND PIPERFITTERS LOCAL UNION #537 24 TRUST FUNDS, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS 25 SIMILARLY SITUATED, 26 Plaintiffs, 27 V. ORIGINAL 28 BP P.L.C., BP EXPLORATION COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 1 ALASKA INC. BP AMERICA, INC., STEVEN MARSHALL MAUREEN 2 L. JOHNSON, JOHN BkOWNE, and ROBERT A. MALONE, 3 Defendants. 4

5 Plaintiffs allege the following based upon the investigation of Plaintiffs' 6 counsel, which included a review of United States Securities and Exchange 7 8 Commission ("SEC") filings by the BP corporate defendants, as well as regulatory

9 filings and reports, securities analysts reports and advisories about BP, press 10 releases, and media reports about BP, and Plaintiffs believe that substantial 11 12 additional evidentiary support will exist for the allegations set forth herein after a

13 reasonable opportunity for discovery. 14 1. NATURE OF THE ACTION AND SUMMARY OF THE 15 ALLEGATIONS 16 1. This is a class action on behalf of all persons who purchased or 17 I otherwise acquired BP p.l.c. ("BP") securities during the period March 31, 2005 18 through August 4, 2006 (the "Class Period"). This action alleges 19 that the 20 defendants, defined herein, intentionally and/or deliberately recklessly failed to 21 properly and safely maintain BP's oil pipelines in Prudhoe Bay, Alaska. 22 2. On 23 March 2, 2006, a massive leak releasing more than 200,000

24 gallons of oil occurred in BP's Prudhoe Bay oil pipeline. Criminal and civil 25 investigations by federal and state agencies determined that the leak was due to 26 27 internal corrosion caused by bacteria.

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 2 I

1 3. BP's own internal investigation revealed that the use of a "smart pig" 2 - an industry-recognized good practice - could have discovered the internal 3 corrosion. The Department of Transportation issued Corrective 4 a Action Order on 5 March 15, 2006 requiring BP Exploration Alaska ("BPXA") to take remedial 6 action, including running a smart pig in the Prudhoe Bay oil pipelines. 7 8 4. Defendants assured BP investors that its corrosion monitoring

9 program was "aggressive" and "robust." Despite the severity of the March 2006 10 oil spill - the worst in the history of North Slope of Alaska - BP persisted with its 11 12 inadequate maintenance of the Prudhoe Bay pipelines.

13 5. On August 7, 2006, before the stock market opened, BP announced 14 that BPXA was completely shutting down production in Prudhoe Bay after a 15 16 second leak and resultant oil spill from another corroded pipeline occurred.

17 6. A Congressional investigation on April 30, 2007 revealed that 18 extensive cost cutting at BPXA may have contributed significantly to the pipeline 19 20 corrosion that caused the March 2006 spill.

21 7. BP pleaded guilty to a criminal violation of the federal Clean Water 22 Act on November 29, 2007 and agreed to pay a $20 million fine in settlement of 23 24 federal and state criminal violations in connection with the March and August

25 2006 Prudhoe Bay oil spills. 26 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 3 1 8. During the Class Period, the Defendants had actual knowledge of, or 2 recklessly disregarded, material facts and failed to disclose material information to 3 4 investors concerning the maintenance and operating condition of the Prudhoe Bay 5 pipeline. 6 9. As a direct result of the market learning of Defendants' wrongdoing, 7 8 the price of BP shares declined and plaintiff and the class suffered a loss on their

9 investment in BP. 10 II. JURISDICTION AND VENUE 11 10. This Court has subject matter jurisdiction over this action pursuant to 12 13 Section 27 of the Securities and Exchange Act of 1934 ("Exchange Act"),

14 15 U.S.C.; § 78aa and 28 U.S.C. § 1331. The claims asserted herein arise under 15 section 10(b) and 20(a) of the Exchange Act as amended, 15 U.S.C. § 78b(b) and 16 17 I § 78t(a) and rule lOb-5, 17 C.F. R. § 240, 1Ob-5, promulgated thereunder.

18 11. Venue is proper in this District pursuant to section 27 of the 19 Act, and is proper pursuant to 28 U.S.C. § 1391 because, among other things, BP 20 21 maintains offices and conducts substantial business in this District.

22 12. In connection with the acts, conduct, and other wrongs alleged in this 23 complaint, the defendants, directly and indirectly, used the means and 24 25 instrumentalities of interstate commerce, including the mail and telephone

26 communications. 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 4 1 III. THE PARTIES 2 3 13. Plaintiffs Bankinter Gestion de Activos, S.G.I.I.C. on behalf of BK 4 Dividendo , the City of Edinburgh Council on behalf of the Lothian Pension Fund, 5 Frankfurt Trust Investment-Gesellschaft mbH, Frankfurter-Service Kapitalanlage- 6 7 Gesellschaft mbH, and Piperfitters Local Union #537 Trust Funds purchased 8 securities of BP during the Class Period as reflected in the attached certifications, 9 and were damaged as a result of the market learning about defendants' misconduct 1 0 11 14. Defendant BP is a public limited company registered in England and 12 Wales. BP was created in 1998 as a result of a merger between the Amoco 13 Corporation ("Amoco") and the British Petroleum Company p. 1.c. BP is a multi- 14 15 national, integrated oil company with three main operating business segments: 16 exploration and production, refining and marketing, and gas, power and 17 renewables. Approximately 40% of BP's fixed assets are located in the United 18 19 States, and BP markets petroleum products in the U.S. and in this District under 20 BP and Amoco brands. 21 15. During the Class Period, BP made public statements regarding the 22 23 operation of Prudhoe Bay, the maintenance and condition of pipelines at Prudhoe 24 Bay, and production at Prudhoe Bay. Defendant BP had a duty to promptly 25 disseminate complete, truthful and accurate information 26 and to promptly correct 27 any public statements that had become materially false or misleading.

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 5 1 16. Defendant BPXA is a Delaware corporation with its principal place of 2 business in Anchorage, Alaska. BPXA conducts business in this District. BPXA 3 is 4 an indirect wholly-owned subsidiary of BP and an indirect subsidiary of BP

5 America, Inc. (`BP America"). 6 17. BPXA holds oil and gas interests in Prudhoe Bay (the "BP Working 7 8 Interests"), which is located on the North Slope of Alaska, 250 miles north of the

9 Arctic Circle. Prudhoe Bay extends approximately 12 miles by 27 miles and 10 contains nearly 150,000 productive acres. Prudhoe Bay, which was discovered in 11 12 1968 by BP plc and others, has been in production since 1977.

13 18. BPXA shares control of Prudhoe Bay with other working interest 14 owners . BPXA currently holds approximately 26% of the oil and gas interests in 15 16 Prudhoe Bay. Other large stake holders include ExxonMobil and ConocoPhillips,

17 each with an approximate 36% interest. The operations of BPXA and the other 18 working interest owners are governed by an agreement dated April 1, 1977 among 19 20 the State of Alaska and such working interest owners establishing the Prudhoe Bay

21 Unit (the "Prudhoe Bay Unit Agreement") and an agreement dated April 1, 1977 22 among the working interest owners governing Prudhoe Bay Unit operations (the 23 24 "Prudhoe Bay Unit Operating Agreement").

25 19. Since July 1, 2000, BPXA has been solely responsible for Prudhoe 26 Bay's operations, including production and maintenance. 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 6 1-11

1 20. During the Class Period, BPXA made public statements regarding the 2 operation of Prudhoe Bay, the maintenance and condition of pipelines at Prudhoe 3 Bay, and production at Prudhoe Bay. Defendant BPXA 4 had a duty to promptly 5 disseminate complete, truthful and accurate information and to promptly correct 6 any public filings or statements that had become materially false and misleading. 7 8 21. Defendant Steven Marshall ("Marshall") was President of BPXA 9 2001 through 2006. As BPXA President, Marshall was in charge of the overall 10 business and operations in Prudhoe Bay. During the Class Period, Marshall made 11 12 public statements regarding the operation of Prudhoe Bay, the maintenance of and

13 condition of pipelines at Prudhoe Bay, and production at Prudhoe Bay. As BPXA 14 President, Marshall had responsibility for public statements issued by BPXA 15 16 regarding Prudhoe Bay, as well as information, forecasts, projections and

17 representations made by BPXA to investors. Marshall had a duty to promptly 18 disseminate complete, truthful and accurate information and to promptly correct 19 20 any public statements that had become materially false or misleading. As

21 President of BPXA, Defendant Marshall was responsible for the information 22 provided by BPXA pursuant to its reporting obligations to investors, 23 24 22. Defendant Maureen L. Johnson ("Johnson") was, during the Class

25 Period, BPXA's Senior Vice President of the Greater Prudhoe Bay Unit. During 26 the Class Period, Johnson made public statements regarding the operation of 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 7 1 Prudhoe Bay, the maintenance of and condition of pipelines at Prudhoe Bay, and 2 production at Prudhoe Bay. Defendant Johnson had a duty to promptly 3 disseminate complete, truthful and accurate information and to promptly correct 4 5 any public statements that had become false or misleading . As Senior Vice 6 President of BPXA, Defendant Johnson was responsible for the information 7 8 provided by BPXA pursuant to its reporting obligations to investors. 9 23. Defendant Robert A. Malone ("Malone") was appointed Chairman 10 and President of BP America in 2006. Malone is BP's chief representative in the 11 12 United States. During the Class Period, Malone made public statements regarding

13 the operation of Prudhoe Bay, the maintenance of and condition of pipelines at 14 Prudhoe Bay, and production at Prudhoe Bay. Defendant Malone had a duty to 15 16 promptly disseminate complete, truthful and accurate information and to promptly

17 correct any public statements that had become materially false or misleading. As 18 President of BP America, Defendant Malone was responsible for the information 19 20 provided by BPXA pursuant to its reporting obligations to investors.

21 24. Defendant John Browne ("Browne") has been the Chief Executive of 22 BP during the class period. On January 12, 2007, BP announced that Browne 23 24 would be retiring from his position on August 1, 2007, one year earlier than

25 previously announced, after serving in that position for twelve years. 26 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 8 1 25. Defendants Marshall, Johnson, Malone, and Browne are collectively 2 referred to herein as the "Individual Defendants." 3 26. BP BPXA, BP America the 4 , and Individual Defendants are 5 collectively referred to herein as "Defendants." 6 27. BP and the Individual Defendants had the power to influence and 7 cause (and did cause) BPXA to engage in the unlawful conduct complained 8 of 9 herein. 10 28. Defendants had access to internal documents, reports and other 11 12 information, including adverse non-public information concerning Prudhoe Bay

13 operations, maintenance and business (as described herein) which directly affected 14 the interests of investors in BP securities. 15 16 29. During the Class Period, Defendants made statements regarding the

17 operation of Prudhoe Bay, the maintenance of and condition of pipelines at 18 Prudhoe Bay, and production at Prudhoe Bay, which directly affected the interests 19 20 of investors in BP securities.

21 30. The Defendants named herein, by reason of their status as officers, 22 have at all relevant times had the power and influence, and did in fact control and 23 24 influence and cause or allow BP to engage in the unlawful acts and conduct

25 complained of herein. Each of the defendants is liable as a direct participant in, or 26 responsible for, the wrongs complained of herein. 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 9 1 IV. SUBSTANTIVE ALLEGATIONS 2 31. BP is a public limited company registered in England and Wales. 3 BP directly or through its subsidiaries is responsible for (a) the condition of the 4 Prudhoe Bay pipeline, 5 (b) for the maintenance of the pipeline, and (c) for reportin€

6 upon the condition and/or maintenance of the pipeline. BP maintains three 7 operating business segments: Exploration and Production; Refining and 8 9 Marketing; and Gas, Power and Renewables . Approximately 40% of BP's fixed

10 assets are located in the United States. BP has a strong refining and marketing 11 presence in the United States, marketing under the Amoco and BP brands in the 12 13 Midwest, East and Southeast, and under the Arco brand on the West Coast. BP is

14 also involved in power projects in the United States. For the years ended 15 December 31, 2003, 2004 and 2005, the United States accounted for the single 16 17 largest source of BP's sales and operating revenues categorized by geographical

18 area. Within its Exploration and Production operating business segment, BP 19 performs upstream activities (oil and natural gas exploration and field 20 21 and production) and midstream activities, (management of crude oil and natural

22 gas processing facilities). In terms of its upstream activities, including oil 23 production, BP lists the fields of Prudhoe Bay as its most productive for per-day 24 25 net production. The United States also represents BP's single largest concentration

26 of employees worldwide reported by geographic area. 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 10 32. BPXA is a wholly owned subsidiary of BP. 2 Maintenance of Oil Pipelines 3 33. It is well-accepted within the oil and gas industry that good oil and 4 gas field practices require, among other things, 5 a regular program of pigging 6 pipelines in order to clear them of debris and detect corrosion. 7 34. A "pig" is the oil industry term for a tool, usually shaped like a 8 9 cylinder, pushed through a pipeline. There are two types of pigging practiced in

10 the industry "maintenance" pigging and "smart" pigging for inspection of 11 pipelines. 12 13 35. Maintenance pigging and smart pigging are defined in a fact sheet 14 available on BP's website. As stated in the "Overview of Corrosion Prevention 15 Programs": 16 17 Maintenance pigging is the term for using a mechanical tool to clean the inside of a pipeline. The 18 tool comes in various configurations depending on the application (egg^ foam, disc, cup or brush). Typically the 19 tool is used with fluids remaining in the line. The pressure of the fluids (oil, gas and/or water) acts as the 20 drive mechanism for moving the pig from point to point. Maintenance pigging removes undesirable material, debris (liquid or solid) e.g., wax, paraffin, scale, sediment 21 and water corrosion cells from accumulating. 22 For mechanical integrity, specialty tools like 23 "Smart Pigs" rigged with magnetic flux leakage (MFL) and ultrasonic thickness testing (UTT) modules are used 24 for accurate inspections of the wall of pipelines. Smart pigs can also perform mapping with UPS.technolo gy and detect cracks from stress corrosion. Smart igs and other 25 automated techniques are helpful in identifying locations that should be more closel monitored using one of the 26 point inspection methods (e.g. visual, ultrasonic, 27 radiographic).

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 11 1 36. Smart pigs can detect the presence or absence of cracks and corrosion 2 and pitting within a pipeline, among other things. 3 Smart pigs 4 37. can quickly process data showing the extent of corrosion

5 along a pipeline at intervals as small as one-tenth of one inch. 6 38. In an August 13, 2006, Anchorage Daily News article, Kirk Langford, 7 8 head of transmission pipeline inspection for oil services firm Baker Hughes Inc.,

9 stated "Regular pigging is good business.... The better pipeline operators have 10 always done this." 11 12 39. In the same article, Tom Miesner, a Houston-based pipeline

13 consultant, stated "smart pigging is the ideal ....They are about the only thing you 14 can run through a pipe in order to find anomalies." 15 16 40. The article also stated that a study conducted by the Association of

17 Pipe Lines found that the use of smart pigs can significantly reduce pipeline spills: 18 "The study, which covered 1999-2004, showed the overall number of spills on 19 20 pipeline segments tested with smart pigs dropped approximately 50 percent."

21 41. In an August 13, 2005 Houston Chronicle article, Jack Smart, a 22 Houston consulting engineer who specializes in pigging, stated "most companies 23 24 would consider using pigs regularly good operating practice."

25 42. Rick Eckert, a corrosion expert with CC Technologies Services and 26 author of Field Guidefor Investigation Internal Corrosion ofPipelines, stated in 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 12 1 the Houston Chronicle article that "Pigging is really the No. 1 way of removing 2 debris and preventing internal corrosion." 3 4 43. As described below , for many years BPXA did not, in a manner 5 consistent with good oil and gas field practices, either maintenance pig or smart 6 pig the Prudhoe Bay pipelines. In addition, BPXA elevated cutting costs above 7 maintenance and safety the pipeline infrastructure. 8 of 9 The March 2, 2006 Oil Spill 10 44. On March 2, 2006, BP discovered a crude oil spill in the pipeline 11 serving the Prudhoe Bay oil fields. It was the largest oil spill ever recorded on the 12 13 North Slope of Alaska, totaling over 200,000 gallons. The cause of the spill was

14 determined to be a pipeline leak, the result of internal corrosion caused by bacteria 15 45. According to an investigative report prepared by BP and the State of 16 17 Alaska, the leak probably went undetected for at least five days, "and probably

18 much longer." 19 46. On March 3, 2006, the Anchorage Daily News reported that, due to 20 21 the leak, an oil processing plant and about 245 wells were shut down, cutting N

22 Slope production by 12 percent, or 100,000 barrels per day. The article went on to 23 state: 24 25 Neither state officials nor BP spokesman Daren Beaudo could say how much oil was spilled. 26 Because of its size, the leaky pipeline can accommodate 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 13 AIIN

1 a pig, which is a bulletshaped device that slides down pipes to sense for weak spots in the steel wall or other 2 problems. 3 The line had been pigged, but Beaudo could not provide details on whether any problems had been found. 4 47. Defendants knew that a smart pig had not been run through the faulty 5 pipeline since 1998. On March 4, 2006, the Anchorage Daily News reported: 6 Beaudo revealed that the big pipeline...had known 7 interior and exterior corrosion damage. 8 Because of this, BP had downgraded the maximum pressure allowed within the line to help guard against 9 rupturing its steel walls, he said.... 10 BP can test the integrity of pipelines by sending a bullet-shaped sensor known as a smart pig through the 11 pipe. The last time a smart pig slid through the 34-inch pipe was 1998 , Beaudo said It was scheduled for 12 pigging this summer, he said. 13 However, undisclosed to investors was the fact that BPXA had not conducted any 14 maintenance pigging as well. 15 48. On March 8, 2006, the Anchorage Daily News reported that BP and 16 the Alaska Department of Environmental Conservation ("ADEC") had jointly 17 announced that the source of the leak was a hole at the bottom of the steel pipe 18 19 inside a culvert underneath a caribou crossing. The hole was caused by internal 20 corrosion. 21 22 49. The cause of the March oil spill was identical to the cause of a May 23 2003 oil spill at Prudhoe Bay totaling 6,000 gallons of oil and oily water, which 24 also occurred at a caribou crossing. 25 26 50. In response to numerous press reports regarding the March 2006 spill,

27 Defendants attempted to minimize the severity of corrosion problems. On

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 14 March 9, 2006, the Los Angeles Times reported that BP spokesman Beaudo had 2 stated, "We have a very aggressive, robust corrosion monitoring program." 3 51. On March 15, 2006, The New York Times reported that: 4 5 The oil company blamed for the North Slope 's largest oil spill said Tuesday its inspectors were aware of corrosion 6 in a pipeline for months before it burst, but believed the threat to be "manageable." 7 An inspection last fall revealed corrosion in the line and 8 led officials to step up their schedule of inspections, said Maureen Johnson, BP Exploration Alaska's senior vice 9 president of the Greater Prudhoe Bay Unit. 10 Johnson said corrosion was seen in the 34-inch oil transit line in a September inspection but it appeared to be 11 occurring at a "low manageable corrosion rate." 12 A leak was discovered March 2 and now covers two acres of remote and frozen tundra on Alaska ' s north coast 13 near the Beaufort Sea. As of Monday, crews had recovered about 60,000 gallons of an estimated 201,000 14 to 267 ,000 gallons of spilled crude. 15 Spill investigators found significant damage, especially in low spots ofthe pipe- that likely occurred within the last 16 six to nine months. 17 Similar problems have not been found in other lines downstream and elsewhere in Prudhoe Bay, and Johnson 18 said it appears the highly corrosive conditions were unique to that line. 19 "We can assure you we are taking action on all possible 20 causes out there, Johnson said. 21 52. In an interview with Petroleum News published May 14, 2006, 22 Johnson stated that instead of pigging pipelines, BP had been monitoring Prudhoe 23 which 24 Bay oil transit lines for corrosion with exterior ultrasonic testing - uses an 25 ultrasonic device to measure the thickness of the pipeline wall - and corrosion 26 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 15 n

1 coupons, which are small metal plates placed inside the pipeline and inspected for 2 corrosion every 90 days. The interview also stated that: 3 4 BP has committed to ratchet up its corrosion prevention 5 program by running maintenance pigs through its oil transit pipelines at regular intervals, by increasing the 6 frequency of smart pigging and by injecting corrosion inhibitors into the lines - in effect the company will apply 7 similar corrosion prevention measures to its oil transit lines as it already applies to its water systems. 8 53. In further 9 a effort to assuage the public, regulators and investors,

10 Johnson stated that in response to the March oil spill and the March 15th CAO, BP 11 was taking a series of steps to ensure that another pipeline leak did not occur, 12 13 stating that, "We've looked at all of the oil transit lines ...none other has the same

14 combination of factors...bacteria in the facility, low flow rate and low corrosion 15 inhibitor carry over....Going forward we'll pig out oil transit lines on a regular 16 17 basis and we'll look at our pigging practices on all our pipelines and say `Does this

18 make sense?"' 19 54. Johnson also stated, regarding long term strategy, "You can count on 20 21 us to not only do the reactive things we've done already - the inspections, the

22 additional inhibitor, maintenance things, the smart pigging, the solids 23 removal ... (But) the response will be bigger and more connected than that." 24 25 55. Johnson's and Beaudo's statements were materially misleading.

26 Significantly, Johnson's comments regarding BPXA's purported new efforts to 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 16 n

improve maintenance simply misled investors regarding the existing damage to 2 pipelines from prior undisclosed maintenance failures and the fact that new efforts 3 would not necessarily 4 prevent another spill, shutdown or reduced production.

5 56. In contrast to Johnson's assurances, Deputy Secretary of 6 Transportation Maria Cino, in a June 5, 2006 letter to Congress, stated that the 7 8 department "has not received a reasonable explanation why BP has not

9 scraper-pigged these lines over an approximately 14-year period." The letter went 10 on to state that "[i]n our opinion, based on current information, this length of time 11 12 does not represent sound management practices for internal corrosion control." 13

14 The August 7 2006 Shutdown of Prudhoe Ba 15 57. On August 7, 2006, BP issued the following press release regarding 16 the problems and related shutdown at Prudhoe Bay: 17 18 BP to Shutdown Prudhoe Bay Oil Field 19 Release date: 07 August 2006 20 ANCHORAGE -- BP Exploration Alaska, Inc. has begun an orderly and phased shutdown of the Prudhoe 21 Bay oil field following the discovery of unexpectedly severe corrosion and a small spill from a Prudhoe Bay oil 22 transit line. Shutting down the field will take days to complete. Over time, these actions will reduce Alaska North Slope oil production by an estimated 400,000 23 barrels per day. 24 The decision follows the receipt on Friday , August 4 of 25 data from a smart pig run completed in late July. Analysis of the data revealed 16 anomalies in 12 locations in an oil transit line on the eastern side of the 26 oil field. 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 17 In response to the inspection data, BP conducted follow up inspections of anomalies where corrosion-related wall 2 thinning appeared to exceed BP criteria for continued eration. It was during^ these follow up inspections that 3 M personnel discovered a leak and small spill estimated at 4 to 5 barrels. 4 The spill has been contained and the clean up effort is 5 underway . The pipeline was shutdown at 6:30 am Sunday morning. BP has notified state and federal 6 officials of the decision and will work closely with the U.S. Department of Transportation and the Alaska 7 Department of Environmental Conservation, among others. 8 "We regret that it is necessary to take this action and we 9 apologize to the nation and the State of Alaska for the adverse impacts it will cause," said BP America 10 Chairman and President Bob Malone. "However, the discovery of this leak and the unexpected results of this 11 most recent smart,pig run have called into question the condition of the oil transit lines at Prudhoe Bay. We will 12 not resume operation of the field until we and government regulators are satisfied that they can be 13 operated safely and pose no threat to the environment." 14 15 BP is identifying and mobilizing additional resources from across Alaska and North America in order to speed 16 inspection of remaining Prudhoe Bay oil transit lines. BP operates 22 miles of oil transit pipeline at Prudhoe Bay. 17 Smart pigging inspection has been completed over about 40 percent ofthatlength. 18 BP previously announced plans to replace a three-mile 19 segment of pipeline following inspections conducted after a large spill discovered on March 2, 2006. 20 58. The press release made no mention , however, that BP was conducting 21 22 the "smart pig" testing only because it was required to under a Corrective Action

23 Order ("CAO") issued by the United States Department of Transportation on 24 March 15, 2006, following the spill of 200,000 gallons from the same line in 25 26 March 2006 - the worst spill since oil production began on Alaska's northern 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 18 slope. According to the Department of Transportation's preliminary findings 2 contained in the CAO: 3 • [BPXA's] leak detection system was not effective in 4 recognizing and identifying failure. 5 • The probable cause of the failure is internal corrosion. There is evidence of bacterial corrosion... 6 • The PBWOA is one of three similar low-stress pipelines 7 operated by [BPXA] ....The other two pipelines are the Prudhoe Bay East Operating Area (PBEOA) and the 8 Lisburne Pipeline. All three pipelines were constructed around the same time, operate in similar environmental 9 conditions , transport the same quality crude oil that contributed to the cause of internal corrosion in PBWOA, 10 and are operated and maintained in a similar manner by [BPXA]. 11 • Respondent ' s failure investigation had identified at least 12 six additional anomalies on the PBWOA segment between GC-2 and GC-I. Internal corrosion has been 13 observed at several of those anomolies . The worst noted anomaly had a remaining wall thickness of 0.04 inches. 14 • An internal inspection of Prudhoe Bay west operating 15 area (PBWOA)pwas last performed in 1998 using high-resolution magnetic flux leakage (MFL) toll. 16 [BPXA] has not established a regular internal inspection or maintenance pigging (cleaning pigging) program. 17 • 1 find that the continued operation of Respondent's 18 PBWOA, PBEOA, and Lisburne hazardous liquid pipelines without corrective measures will be hazardous 19 to life, property, and the environment. 20 59. The March 15th CAO required BPXA to take remedial action, 21 including: 22 3. Perform an internal inspection using a calibrated smart pig on the PBWOA pipeline within 3 months of placing 23 the pipeline back in service. 24 4. Develop and submit for approval a plan for running maintenance pigs (cleaning igs) on the PBWOA, 25 PBEOA, andLisburne pipelines at regular intervals.... Until that plan has been approved and implemented, run 26 maintenance pigs on those pipelines on a weekly basis. 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 19 1 7. Perform an internal inspection using a calibrated smart pig on the PBEOA and Lisburne pipelines within 3 2 months of receipt of this Order. 3 60. Pursuant to the March 15th CAO, BPXA was to comply with the 4 CAO's requirements by June 15, 2006 . Four months after the issuance of the 5 March 15 , CAO, BPXA still had not fully complied with the order. As a 6 7 consequence, on July 20, 2006, the DOT issued Amendment No. 1 to its 8 March 15th CAO ("CAO Amendment No. I"), which was sent to BPXA with a 9 addressed to Johnson. CAO Amendment No. 1 stated that, despite the 10 cover letter 11 DOT's original order: 12 BP has not run cleaning and maintenance pigs on the 13 OF-21 segment [the location of the March 2006 oil spill] or on the connecting segments of the WOA, as required 14 by Items 3 and 4 of-the-March 15, 2006 CAO. 15 16 I continue to find that the presence of hazardous conditions on the specified pipelines ...without the 17 implementation of corrective measures , would result in likely serious harm to life, property or the environment. 18 BP has failed to meet its continuing responsibility to pursue all available options for meeting the requirements 19 of items 3 , 4 and 7 ofthe March, 2006 CAO.... 20 61. BPXA's failure to fully comply with the March 151 CAO, which only

21 required BPXA to engage in activities considered good oil and gas field practices, 22 further increased the risk of damaged pipelines, serious oil spills and/or shut down 23 24 at Prudhoe Bay resulting in a substantial decrease in production coupled with

25 lower distributions to investors in the Trust Units. Barely two weeks after the 26 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 20 11-1

1 CAO's finding of hazardous conditions on the pipelines , that is exactly what 2 occurred. 3 62. On August 2006 , The New York Times reported that officials BP 4 7, at 5 could not determine how long production would be halted and that Tom Williams, 6 senior tax and royalty counsel did not "even know how long it's going to take to 7 shut [Prudhoe Bay] down." According the The New York Times article, Daren 8 to 9 Beaudo, a BP spokesman, said that safety standards required at least 70 percent of 10 the steel walls of the oil transit pipe to be intact and that inspections found 11 12 corrosion had reduced wall thickness below that standard.

13 63. Also, on August 7, 2006, The Wall Street Journal reported that the 14 shutdown of the Prudhoe Bay oil field would "occur over several days" and result 15 16 in a "curtailment of an estimated 400,000 barrels a day." That curtailment

17 amounted to almost half of the total daily production from fields on the Alaskan 18 Northern Slope. The article noted that State and Federal regulators had launched 19 20 investigations into the corrosion along oil transit network including a criminal

21 probe by the Environmental Protection Agency. 22 64. On August 8, 2006, President of BP America, Inc., defendant Malone, 23 24 announced at a press conference that "it has been necessary to take this drastic

25 action of [a] shutdown of the Prudhoe Bay" and that BP has "taken the decision to 26 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 21 1 replace the main oil lines at Prudhoe Bay" in order to ensure "the integrity of the 2 field." 3 4 65. On August 8, 2006, The Wall Street Journal reported that the

5 shutdown of the Prudhoe Bay oil field facility would reduce production by about 6 400,000 barrels a day for BP, which operated the field, and its partners, including 7 Mobil 8 Corporation and ConocoPhillips. BP owns about 26% of the Prudhoe Bay

9 oil field facility. The Prudhoe Bay field is almost thirty years old and operates 10 with a network of pipelines designed to last only twenty-five years. The article 11 12 quoted Michael Bolkovatz, a production manager at Prudhoe Bay, as saying that 13 BP wanted to stretch the field's life by several more decades and that "the real goa 14 of our program is to make these pipes last another 50 years." The transit line 15 16 responsible for triggering the field shutdown runs between two processing plants in

17 the eastern portion of the field, and corrosion exceeding 30% of the pipes walls 18 was detected by a probe- called a "smart pig ." Phil Flynn, an analyst and trader at 19 20 Alaron Corp., a Chicago brokerage firm specializing in energy industry futures,

21 observed that the oil transit network was "under stress like it's never been before" 22 and that it "was never designed to do this much work." Representative John 23 24 Dingell, a Michigan Democrat, pushed for a Congressional hearing to investigate

25 the Prudhoe Bay shutdown and released a statement saying that it was "appalling 26 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 22 . ^

1 that BP let this critical pipeline deteriorate to the point that a major production 2 shutdown is necessary." 3 66. On August 2006 CNNMoney. 4 8, , com reported that the Prudhoe Bay

5 oil field shutdown was the first of its kind and its impact on consumer gas prices 6 and oil futures has pushed both to near-record highs. Oil analyst Peter Beutel, 7 8 president of Cameron Hanover, an energy risk management firm, was quoted as

9 saying that shutting down an oil field is an expensive and risky step that is only 10 taken in extreme circumstances, and that "once you shut it down, you don't know 11 12 what will happen when you come back." Beutel went on to say that the outage

13 accounts for "almost all Alaska" and that repairs "could drag on for months." 14 67. An Associated Press article published August 8, 2006 quoted Malone 15 16 as saying, regarding recent events at BP, "I'm not able to see a systemic issue...I

17 can say with comfort I'm seeing a high level of focus on safety and operation 18 integrity." 19 20 68. Malone appeared on the ABC Evening News on August 9, 2006. ABC

21 reporter Betsy Stark asked Malone "Were you ever warned about a serious 22 corrosion problem at Prudhoe Bay?" Malone replied, "Not that I'm aware of." 23 24 Stark asked again, "You were never warned by BP technicians or by any outside

25 source about a corrosion problem at Prudhoe Bay?" Malone responded, "Not that I 26 recall." 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 23 1 69. Even Defendants' post-shutdown announcement statements were 2 materially false and misleading because they did not fully disclose the depth of 3 known problems 4 regarding the condition of the Prudhoe Bay pipelines, the risks to

5 maintaining then-present levels of oil production, and the significant repairs and 6 downtime due to defendants' poor maintenance practices that could result in 7 8 reduced levels of production and distributions to investors. Indeed, Defendants

9 failed to disclose that BPXA was conducting "smart pig" testing that revealed the 10 severe corrosion only because it was required by the March 15th CAO, and that 11 12 faulty pipeline had not been pigged since approximately 1992.

13 70. Defendants also knew, no later than June 7, 2006, that BP had 14 concluded and failed to disclose that BPXA 's corrosion management program 15 16 would "not necessarily minimise the likelihood" of another spill.

17 Stock Purchases and Share Price 18 71. On August 4, 2006, the Friday before BP's Monday press release 19 announcing the shutdown of Prudhoe Bay, BP shares closed at $72.54 per share. 20 21 72. As a result of the August 6 and 7, 2006, disclosures of defendants'

22 wrongdoing, on August 8, 2006, the price of BP shares fell and closed at $69.32 23 per share. By one month later, on September 11, the price had declined to $64.89, 24 25 as a result of public disclosures concerning defendants' misconduct. 26 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 24 1 Post-shutdown Events 2 73. On August 7, 2006, The New York Times, reported that BP officials 3 could not determine how long production would be offline and that Tom Williams, 4 BP's senior tax and 5 royalty counsel, did not "even know how long it's going to

6 take to shut [Prudhoe Bay] down." According to the article, BP spokesman Daren 7 Beaudo said that safety standards required at least 70 percent of the steel walls of 8 9 the oil transit pipe to be intact and that inspections found corrosion had reduced

10 wall thickness below that standard. 11 74. On August 9, 2006, the Christian Science Monitor reported that 12 13 BPXA had relied on exterior ultrasonic testing of pipelines instead of a regular

14 pigging program. The article noted that "Mr. Marshall [president of BP Alaska] 15 now acknowledges that ultrasound is not a foolproof safety device." 16 17 75. On the same day, MSNBC. com reported that a criminal investigation

18 was underway to determine whether BP has "deliberately shortchanged 19 maintenance and falsified records to cover it up." In the article, Phil Flynn, an 20 21 energy analyst with Alaron Trading Corp., stated, "I think this was predictable and

22 preventable." 23 76. The MSNBCcom report quoted Thomas Barrett, administrator of the 24 25 DOT's Pipeline and Hazardous Materials Safety Administration ("PHMSA"), as

26 stating he was disappointed with BP's "failure to maintain these lines to an 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 25 accepted industry level of care." Federal regulators assessing the damage o 2 that the "'walls of the pipes were so corroded that they were almost paper thin." 3 4 77. An article published in the Financial Times on August 9, 2006, 5 an anonymous veteran worker as stating "If BP had a valve maintenance 6 programme, pipe maintenance repair and replacement programme, well repair 7 8 programme and a decent inspection programme for the last 15 years, we wouldn't

9 be in this condition; we wouldn't have to shut the entire Prudhoe Bay field." 10 Con ressional Hearing Regarding the Prudhoe Ba Shutdown 11 78. On September 7, 2006, several BP executives appeared before the 12 13 United States House of Representatives, at a hearing before the Subcommittee on

14 Oversight and Investigations of the Committee on Energy and Commerce, to 15 testify concerning the shutdown of Prudhoe Bay. 16 17 79. Richard C. Woollam, former manager of the CIC ("Corrosion

18 Inspection and Chemicals") program at BPXA, refused to testify under oath. He 19 invoked the Fifth Amendment and refused to answer questions: 20 21 Mr. Walden....Mr. Woollam, you were formerly in charge of the Corrosion Inspection and Chemicals Group 22 at BP Exploration Alaska, Incorporated . You were the decision-making manager and engineer responsible for 23 all operations related to corrosion control and monitoring of the pipelines operated by BP at Prudhoe Bay. The 24 subcommittee has learned from several sources that numerous red flags were raised about the integrity of the 25 Prudhoe Bay pipelines while you were in charge of the CIC growp including the 2000 final draft Coffman report. 26 Yet in 2002 you initiated and implemented a plan to reduce the manpower of a key pipeline corrosion 27 monitoring team by 25 percent. So my question, Mr. Woollam, when did you become aware of the 28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 26 pipeline integrity problems faced by the Prudhoe Bay Transmission lines including concerns about accelerated 2 localized corrosion, microbial corrosion and that the failure to send maintenance pigs or smartigs down the 3 transmission lines was placing those pipelines at high risk of failure. 4 MR. WOOLLAM. Mr. Chairman, based upon the advice 5 of counsel , I respectfully will not answer questions based u on my right under the Fifth Amendment of the U.S. 6 Constitution.

7 80. Also at the hearing, PHMSA Administrator Barrett testified regarding 8 BP's failure to properly maintain its pipelines: 9 It was a result of the pigging that we ordered that BP discovered the wall loss and the leaks on a line segment 10 in the eastern operating area that led to the production shutdown on 6 August. 11 12 [Operators ' management of the lines in the years leading 13 up to the March incident and their initial response to our orders was disappointing . Frankly, we do not understand 14 why BP did not more aggressively address the corrosion problems that led to these leaks. Given the multiple risk 15 factors for corrosion in the Prudhoe Bay environment and the low velocities on these lines , it is mystifying that BP 16 did not run cleaning pigs regularly on these transit lines. Most pipeline operators demonstrate a higher standard of 17 care than this regardless of whether they are federally regulated or not. 18 Until recently , BPXA has not moved as swiftly as we 19 would have expected to comply with key requirements of our orders - namely, the requirements to clean and smart 20 pig its low stress lines. We provided an extension in March to allow BPXA to collect more information, and a 21 second extension in April, pushing the first deadline to June 12 2006, more than three months after the spill. 22 Soon after we issued the order BPXA advised PHMSA 23 that it would not be able to comply with the requirements to "smart pig" the lines within the specified time period, 24 the critical step in meeting our objective of having the best possible understanding of the condition of the 25 pipelines. 26 On July 22, 2006, 37 days after the deadline established in our March order BPXA performed the smart pigging 27 ordered by PHMSA....

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 27 when that pig run came back, about 16 spots with significant wall loss, but if you looked alittle broader, 2 you would see, I think the number I saw was about 187 spots with wall loss approaching 50 percent. This 3 was not an isolated couple of spots. - This was a number of spots where you had a substantial problem, and 4 frankly they had no explanation. 5 the fundamental problem was, they were simply not running cleaning pigs, they were not running inline 6 inspection tools. 7 Frankly, the problems we see on these lines are not replicated elsewhere, even in Prudhoe Bay or elsewhere 8 in the industry... , typically up on the North Slope and generally in the industry, you would see maintenance 9 pigs every couple of weeks, certainly every couple of months, but not never on lines of this type. 10 81. Kevin Hostler, President and CEO of Alyeska Pipeline Service, 11 12 testified regarding BPXA's deviation from industry-wide pigging practice. His

13 testimony discussed the importance of pigging low-stress lines like the ones that 14 leaked at Prudhoe Bay, where oil moves slowly, giving sludge and attendant 15 16 bacteria an opportunity to form and grow:

17 MR. STEARNS. As a pipeline operator, would you expect to see regular pigging of low-stress lines where 18 the oil moves at a slower velocity? 19 MR. HOSTLER. In the low-stress lines, yes, sir. 20 MR. STEARNS . Okay. Are you aware of any crude oil pipeline that is not pigged as a part of a regular corrosion 21 maintenance program, leaving aside lines hat may not be piggable due to sharp turns in the line or other structural 22 obstacles? 23 MR. HOSTLER. Leaving aside those lines that have those types of problems, no, sir, I am not aware of any 24 that are not pigged as a routine maintenance program. 25 The Senate Hearin 26 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 28 82. On September 12, 2006, defendant Malone and Marshall appeared 2 before the United States Senate at a hearing before the Committee on Energy and 3 Natural 4 Resources.

5 83. At the hearing, PHMSA Administrator Barrett testified further 6 regarding BP's responsibility for the oil spills at Prudhoe Bay: 7 I think it happened because BP fundamentally didn't 8 understand the conditions of their lines , these low-stress lines on the North Slope, and didn ' t maintain them 9 properly. I think the operator is quite simply accountable or 10 what happened . And we do not see conditions like this replicated in other lines on the North Slope or typically on other lines in the national pipeline 11 transportation system. 12 84. In addition, President and CEO of Alyeska Pipeline Service Hostler 13 testified regarding Alyeska' s pigging program: "we run a maintenance or cleaning 14 15 pig every 7 to 14 days and we run an intelligent pig every 3 years." 16 85. In response to a question from Senator Domenici, Malone stated: 17 In retrospect, BPXA ' s program had a gap that allowed the corrosion in the oil transit lines to escape discovery 18 until it resulted in the leaks in March and August. BPXA's corrosion monitoring programs will, therefore, 19 be supplemented with additional use of cleaning and 20 intelligent pigs in the future. 21 86. In response to a question from Senator Thomas, Marshall stated: BPXA did not believe a pig nun of the Eastern Operating 22 Area was necessary. Even with this increased scrutiny, in retrospect, and in light of what we have learned from 23 this incident, we regret that we did not schedule a baseline pig run when BPXA assumed operations in 24 2001. 25 87. On October 31, 2006, The Wall Street Journal reported that "BP PLC 26 (BP) Tuesday announced that it was replacing the head of its troubled Alaska 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 29 1 division.... Under the shift, current BP Alaska president Steve Marshall will leave 2 the division.... Doug Suttles, currently leading BP's work in the Sakhalin Island in 3 Russia, will take 4 over as the president of BP Alaska." 5 BPXA Pleads Guilty to Criminal Negligence 6 88. BP Exploration Alaska pleaded guilty on November 29, 2007 to a 7 criminal violation of the federal Clean Water Act and agreed to pay a $20 million 8 9 fine in settlement of federal and state criminal violations in connection with the

10 March and August 2006 Prudhoe Bay oil spills. 11 89. According to the Nelson P. Cohen, the U.S. Attorney for the District 12 13 of Alaska, the two leaks "were the result of BPXA' s failure to heed many red flags

14 and warning signs of imminent internal corrosion that a reasonable operator should 15 have recognized." BP acknowledged deficient maintenance on field transit lines in 16 17 the plea agreement . "We submit that this is proof of negligence ," the U.S. 18 Attorney said. 19 90. Judge Ralph Beistline called the crime "serious" and exhorted BPXA 20 21 to pay more attention to environmental protection and less to the bottom line. "I

22 think we need to put a particular emphasis on the need to give high priority to 23 maintenance and maybe a little less priority to profits," Judge Beistline said. 24 25 26 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 30 1 V. DEFENDANTS' MATERIALLY FALSE AND MISLEADING STATEMENTS 2 91. BP Prudhoe Bay Royalty Trust (the "Royalty Trust"), a grantor trust, 3 4 was created as a Delaware business trust pursuant to the BP Prudhoe Bay Royalty

5 Trust Agreement dated February 28, 1989 (the "Trust Agreement") among The 6 Standard Oil Company ("Standard Oil"), BPXA, The Bank of New York, as 7 8 trustee (the "Trustee"), and F. James Hutchinson, co-trustee (The Bank of New

9 York (Delaware), successor co-trustee). The Trustee's corporate trust offices are 10 located in New York City. BPXA and Standard Oil are wholly owned subsidiaries 11 12 of BP.

13 92. BP and BPXA made numerous false and misleading statements about 14 their maintenance of the Prudhoe Bay oil pipeline through the public filings of the 15 16 Royalty Trust.

17 93. In Exhibit 4.2 to the Royalty Trust's FY 2004 10-K filed on March 18 31, 2005 (the beginning of the Class Period), BPXA stated that it would "conduct 19 20 and carry on the development, exploration, production, maintenance and operation 21 of [the Trust' s Interests] with reasonable and prudent business judgment, in 22 accordance with... good oil and gas field practices, as a reasonable and prudent 23 24 operator. ..." (Overriding Royalty Conveyance , § 7.1). 25 94. However, at the time the FY 2004 10-K was filed, this statement was 26 materially false and misleading. Defendants failed to disclose to investors that: (i) 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 31 for years BPXA had failed to implement good oil and gas field practices in 2 maintaining the Prudhoe Bay pipelines; (ii) BPXA's gross recklessness in failing 3 maintain the pipelines created a material of 4 risk pipeline leaks, shutdowns, 5 environmental disasters and lower production ; (iii) BPXA had ignored numerous 6 warnings that its maintenance of the pipelines violated the Prudent Operator 7 8 Standard; (iv) BPXA's corrosion monitoring efforts had been reduced, delayed, or

9 eliminated due to severe budget constraints; and (v) BPXA knowingly ended 10 numerous practices that prudent operators and regulators in the industry 11 12 necessary to properly operate and maintain the pipeline. Defendants knew and

13 failed to disclose the following material facts: 14 • BPXA had discontinued smart pigging and maintenance 15 pigging in the Western Operating Area pipeline at Prudhoe Bay in 1998; 16 • The Eastern Operating Area pipeline at Prudhoe Bay had 17 not been smart pigged or maintenance pigged since 1992; 18 • BPXA did not have a regular internal inspection or maintenance pigging program for its pipelines; 19 • BPXA ' s corrosion strategy was developed in 1999 for the 20 Western side of Prudhoe Bay and had not been updated since then; no corrosion strategy was created or designed 21 for the Eastern half of Prudhoe Bay; 22 • BPXA was operating certain pipelines at decreased pressure because of known corrosion problems within 23 those pipelines; 24 • Following cost cuts implemented in 1999 and thereafter, BPXA cut 25 spending on a corrosion inhibitor in its Alaska pipelines; 26 • As of October 2001, BPXA internal documents indicated 27 that BPXA management was not adequately addressing

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 32 employee concerns re arding the integrity of the equipment at PrudhoeEsay; 2 • As early 2001, BPXA internal documents indicated 3 that BPBPXAXA management gave priority to budgetary guidelines over safety concerns ; critical safety systems 4 needed urgent maintenance or significant upgrades; and it was not addressing long-term ,[pipeline] integrity 5 concerns and preventative maintenance; 6 • As early as 2001 the Prudhoe Bay pipeline was experiencing leaks and spills due to excessive corrosion; 7 • In May 2003, a pipeline at Prudhoe Bay leaked 6,000 8 gallons of oil and oily water due to internal corrosion; 9 • In May 2004, a number of allegations regarding the management of BPXA ' s Corrosion, Inspection and 10 Chemicals Group ("CIC"), which was tasked with monitoring and preventing corrosion at Prudhoe Bay, 11 were brought to the attention of senior BPXA management and BP plc. Walter E. Massey, chairman of 12 the environment committee of BP plc's non-executive board, learned about workers ' concerns regarding health, 13 safety and environmental ("HSE") threats at Prudhoe Bay. Massey was informed that the employees and 14 workers "seek to see the corrosion problem addressed and corrective action undertaken without further delay...."; 15 • Prior to and during the Class Period, BPXA received 16 repeated warnings from its employees that cutbacks in routine pipeline maintenance and inspections had 17 increased the likelihood of accidents or oil spills; 18 • In 2004, an internal investigation conducted by outside counsel found that Richard C. Woollam ("Woollam"), 19 manager of CIC, had a managements le that had a chilling effect on the reporting^ of HSE concerns and 20 recommended a "thorough audit" of the corrosion program data systems; 21 • The report also found that Woollam ' s "overbearin 22 management style" resulted in managers "forcin the adoption" of Woollam ' s decisions , ` regardless oT their 23 reservations over them and line worker complaints about them."; and 24 • CIC was operating without key personnel . The CIC 25 Team Leader and the Senior Corrosion Engineer both left the company at the end of 2004 and had not been 26 replaced. The FY 2004 10-K also represented to investors that : "[BPXA] anticipates that net production 27 from current proved reserves.. .will exceed 90,000 barrels per day until the year 2013." 28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 33 1 95. The FY 2004 10-K also stated: 2 In general , BP Alaska' s oil and gas activities are subject to existing federal , state and local laws and regulations 3 relating to health, safety environmental quality and pollution control. BP A'aska believes that the equipment 4 and facilities currently being used in its operations generally comply with the applicable legislation and 5 regulations. 6 96. The foregoing statement was materially false and misleading because 7 Defendants knew that the improperly maintained pipelines at Prudhoe Bay and 8 BPXA' s violation of the Prudent Operator Standard created a material risk that 9 10 BPXA was in violation of local laws relating to health, safety, environmental 11 quality and pollution control, and in the event of an oil spill, BPXA would be 12 to a shutdown of the pipeline due to such environmental violations and 13 exposed 14 further, that such events could subject BPXA to criminal liability and further limit 15 production from Prudhoe Bay. 16 Trust's quarterly reports on Form 10-Q for the first 17 97. In the Royalty 18 three quarters of 2005, BPXA stated that it would "conduct and carry on the 19 development, exploration, production, maintenance and operation of [the Trust's 20 with... 21 Interests] with reasonable and prudent business judgment, in accordance

22 good oil and gas field practices, as a reasonable and prudent operator. ..." 23 (Overriding Royalty Conveyance , § 7.1). 24 25 98. The foregoing statement in these three 2005 quarterly reports was

26 materially false and misleading for the same reasons described in ¶ 94 above. 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 34 n

99. In response to numerous press reports regarding the March 6, 2006 2 spill, Defendants attempted to minimize the severity of corrosion problems. On 3 March 9, 2006, the Los Angeles Times reported that BP spokesman Beaudo had 4 5 stated, "We have a very aggressive, robust corrosion monitoring program." 6 100. On March 15, 2006, The New York Times reported that: 7 The oil company blamed for the North Slope's largest oil 8 spill said Tuesday its inspectors were aware of corrosion in a pipeline for months before it burst, but believed the 9 threat to be "manageable." 10 An inspection last fall revealed corrosion in the line and led officials to step up their schedule of inspections, said 11 Maureen Johnson, BP Exploration Alaska' s senior vice president of the Greater Prudhoe Bay Unit. 12 Johnson said corrosion was seen in the 34-inch oil transit 13 line in a September inspection but it appeared to be occurring at a "low manageable corrosion rate." 14 A leak was discovered March 2 and now covers two 15 acres of remote and frozen tundra on Alaska's north coast near the Beaufort Sea. As of Monday, crews had 16 recovered about 60,000 gallons of an estimated 201,000 to 267,000 gallons of spilled crude. 17 Spill investigators found significant damage-especially in 18 low spots ofthe pipe- that likely occurred within the last six to nine months. 19 Similar problems have not been found in other lines 20 downstream and elsewhere in Prudhoe Bay, and Johnson said it appears the highly corrosive conditions were 21 unique to that line. 22 "We can assure you we are taking action on all possible causes out there,` Johnson said. 23 with published May 14, 2006, 24 101. In an interview Petroleum News 25 Johnson stated that instead of pigging pipelines, BP had been monitoring Prudhoe 26 Bay oil transit lines for corrosion with exterior ultrasonic testing - which uses an 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 35 n

1 ultrasonic device to measure the thickness of the pipeline wall - and corrosion 2 coupons, which are small metal plates placed inside the pipeline and inspected for 3 corrosion every 90 days. The interview also stated that: 4 5 BP has committed to ratchet up its corrosion prevention program by running maintenance pigs through its oil 6 transit pipelines at regular intervals, by increasing the frequency of smart pigging and by injecting corrosion 7 inhibitors into the lines- in effect the company, will apply similar corrosion prevention measures to its oil transit 8 lines as it already applies to its water systems. 9 102. In a further effort to assuage the public, regulators and investors, 10 Johnson stated that in response to the March oil spill and the March 15th CAO, BP 11 taking series of steps to ensure that another pipeline leak did not occur, 12 was a 13 stating that, "We've looked at all of the oil transit lines...none other has the same 14 combination of factors...bacteria in the facility, low flow rate and low corrosion 15 we'll pig out oil transit lines on a regular 16 inhibitor carry over... .Going forward

17 basis and we'll look at our pigging practices on all our pipelines and say `Does this 18 make sense?"' 19 count on 20 103. Johnson also stated , regarding long term strategy, "You can

21 us to not only do the reactive things we've done already - the inspections, the 22 additional inhibitor, maintenance things, the smart pigging, the solids 23 24 removal ... (But) the response will be bigger and more connected than that."

25 104. Johnson's and Beaudo's statements (1199-103) were materially 26 misleading . Significantly, Johnson ' s comments regarding BPXA' s purported new 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 36 1 efforts to improve maintenance simply misled investors regarding the existing 2 damage to pipelines from prior undisclosed maintenance failures and the fact that 3 would not necessarily prevent another spill, shutdown or reduced 4 new efforts 5 I production. 6 105. In contrast to Johnson's assurances, Deputy Secretary of 7 2006 letter to Congress, stated that the 8 Transportation Maria Cino, in a June 5, 9 department "has not received a reasonable explanation why BP has not 10 scraper-pigged these lines over an approximately 14-year period." The letter went 11 information, this length of time 12 on to state that "[i]n our opinion, based on current

13 does not represent sound management practices for internal corrosion control." 14 106. Even Defendants' post-shutdown announcement statements (¶¶ 67- 15 fully disclose the 16 68) were materially false and misleading because they did not

17 depth of known problems regarding the condition of the Prudhoe Bay pipelines, 18 risks to maintaining then-present levels of oil production, and the significant 19 20 repairs and downtime due to defendants' poor maintenance practices that could

21 result in reduced levels of production and distributions to investors. Indeed, 22 Defendants failed to disclose that BPXA was conducting "smart pig" testing that 23 24 revealed the severe corrosion only because it was required by the March 15th

25 CAO, and that the faulty pipeline had not been pigged since approximately 1992. 26 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 37 1 107. Defendants also knew, no later than June 7, 2006, that BP had 2 concluded and failed to disclose that BPXA' s corrosion management program 3 would "not necessarily minimise the likelihood" of another spill. 4 I 5 VI. CLASS ACTION ALLEGATIONS 6 108. Plaintiff brings this action as a class action pursuant to Federal Rule o 7 Civil Procedure 23(a) and (b)(3) on behalf of a Class, consisting of (as stated 8 all those who purchased or otherwise acquired shares of BP between 9 above) 10 March 31, 2005 and August 4, 2006, inclusive (the "Class Period") and who were 11 damaged thereby. Excluded from the Class are defendants, the officers and 12 Alaska, at all relevant times, 13 directors of BP and its subsidiaries, including BP

14 members of their immediate families and their legal representatives, heirs, 15 successors or assigns and any entity in which defendants have or had a controlling 16 17 interest.

18 109. The members of the Class are so numerous that joinder of all 19 members is impractical. Throughout the Class Period, BP shares were actively 20 21 traded on the NYSE. The exact number of Class members is unknown to plaintiff

22 at this time and can only be ascertained through appropriate discovery. Indeed, 23 during the Class Period, BP had more than three billion shares outstanding with an 24 25 average of over three million shares traded per day. Record owners and other

26 members of the Class may be identified from records maintained by BP or its 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 38 r-N

1 transfer agent and may be notified of the pendency of this action by mail, using the 2 form of notice similar to that customarily used in securities class actions. 3 110. There is a well-defined community of interest in the questions of law 4 5 I and fact involved in this case. Questions of law and/or fact common to the 6 I members of the Class which predominate over questions which may affect 7 individual Class members include: 8 9 (a) Whether the 1934 Act was violated by defendants; 10 (b) Whether defendants omitted and/or misrepresented material 11 facts; 12 (c) Whether defendants' statements omitted material facts 13 necessary to make the statements made, in light of 14 circumstances under which they were made, not misleading; 15 (d) Whether defendants knew or recklessly disregarded that their 16 statements were false and misleading; 17 (e) Whether the price of BP securities was artificially inflated as a 18 result of defendants' misrepresentations and/or omissions; and 19 (f) Whether disclosure of defendants' wrongdoing caused class 20 members to suffer damages. 21 111. Plaintiffs' claims are typical of those of the Class because Plaintiffs 22 and the Class sustained damages from Defendants' common course of wrongful 23 other public statements 24 conduct involving BP's SEC filings and defendants'

25 concerning the Pipeline. 26 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 39 n

1 112. Plaintiffs will adequately protect the interests of the Class and have 2 I retained counsel who are experienced in class action securities litigation. Plaintiffs ` 3 know of no interests they have which conflict with those of the Class. 4 5 113. A class action is superior to all other available methods for the fair 6 and efficient adjudication of this controversy since joinder of all members is 7 impracticable. Furthermore, as the damages suffered by individual Class members 8 9 may be relatively small, the expense and burden of individual litigation make it 10 impossible for members of the Class to individually redress the wrongs done to 11 action as class 12 them. There will be no difficulty in the management of this a

13 action. 14 VII. FRAUD ON THE MARKET 15 114. At all relevant times, the market for BP securities was an efficient 16 17 market for the following reasons, among others:

18 (a) BP securities met the requirements for listing, and was listed 19 and actively traded on the NYSE, a highly efficient market; 20 (b) On average BP traded millions of shares per day during the 21 class period; 22 (c) As a regulated issuer, BP filed periodic public reports with the 23 SEC and the NYSE; 24 (d) BP regularly communicated with public investors via 25 established market communication mechanisms, including 26 through regular disseminations of press releases on the national 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 40 I ,IN

1 circuits of major news services and through other wide-ranging 2 public disclosures, such as communications with the financial 3 press an other similar reporting services; and 4 (e) BP was followed by securities analysts employed by many 5 major brokerage firms who wrote reports which were 6 distributed to the sales force and certain customers of their 7 respective brokerage firms. Each of these reports was publicly 8 available and entered the public marketplace. 9 115. As a result of the foregoing, the market for BP securities promptly 10 digested current information regarding BP from all publicly available sources and 11 reflected such information in BP's share price. Under these circumstances, all 12 purchasers of BP securities during the Class Period suffered similar injury through 13 their purchase of BP securities at artificially inflated prices, and a presumption of 14 reliance applies. . 15 VIII. SCIENTER 16 116. Each of the Defendants had actual knowledge of the 17 misrepresentations and omissions of material facts set forth herein, or acted with 18 reckless disregard for the truth in that they failed to ascertain and to disclose such 19 20 facts, even though such facts were available to them. Defendants' material 21 representations and/or omissions were done knowingly or recklessly and for the 22 concealing BP's operations and business affairs from the 23 purpose and effect of 24 investing public, thereby supporting the artificially inflated price of BP securities, 25 As demonstrated by defendants' statements throughout the Class Period, if they 26 they 27 not have actual knowledge of the misrepresentations and omissions alleged,

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 41 1 I were reckless in failing to obtain such knowledge by deliberately refraining from 2 I taking those steps necessary to discover whether those statements were false or 3 misleading. 4 I 5 117. In particular, Defendants failed to disclose to investors that: (i) for 6 years BPXA had failed to implement good oil and gas field practices in 7 maintaining the Prudhoe Bay pipelines ; (ii) BPXA' s gross recklessness in failing 8 9 maintain the pipelines created a material risk of pipeline leaks, shutdowns, 10 environmental disasters and lower production; (iii) BPXA had ignored numerous 11 violated the Prudent Operator 12 warnings that its maintenance of the pipelines

13 Standard ; (iv) BPXA' s corrosion monitoring efforts had been reduced, delayed, or 14 eliminated due to severe budget constraints ; and (v) BPXA knowingly ended 15 16 numerous practices that prudent operators and regulators in the industry consi

17 necessary to properly operate and maintain the pipeline. Defendants knew and 18 failed to disclose the following material facts: 19 • BPXA had discontinued smart pigging and maintenance 20 pigging in the Western Operating Area pipeline at 21 Prudhoe Bay in 1998; • The Eastern Operating Area Pipeline at Prudhoe Bay had 22 not been smart pigged or maintenance pigged since 1992; 23 • BPXA did not have a regular internal inspection or 24 maintenance pigging program for its pipelines; • BPXA' s corrosion strategy was developed in 1999 and 25 thereafter, BPXA cut spending on a corrosion inhibitor in 26 its Alaska pipelines; 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 42 I-

• Following cost cuts implemented in 1999 and thereafter, BPXA cut spending on corrosion problems within those 2 pipelines; 3 • As of October 2001 , BPXA internal documents indicated that BPXA management gave priority to budgetary 4 guidelines over safety concerns ; critical safety systems needed urgent maintenance or significant upgrades; and it 5 was not addressing long-term ,[pipeline] integrity concerns and preventative maintenance; 6 • As early as 2001 the Prudhoe Bay pipeline was 7 experiencing leaks and spills- due to excessive corrosion; 8 • In May 2003, a pipeline at Prudhoe Bay leaked 6,000 gallons of oil and oily water due to internal corrosion; 9 • In May 2004 , a number of allegations regarding the 10 management of BPXA' s Corrosion Inspection and Chemicals Group ("CIC"), which was tasked with 11 monitoring and preventing corrosion at Prudhoe Bay, were brought to the attention of senior BPXA 12 management and BP. Walter E. Massey, chairman of the environment committee of BP ' s non-executive board 13 learned about workers' concerns regarding health, sa'ety, and environmental ("HSE") threats at Prudhoe Bay. 14 Massey was informed that the employees and workers "seek to see the corrosion problem addressed and 15 corrective action undertaken without further delay...."; 16 • Prior to and during the Class Period , BPXA received repeated warning from its employees that cutbacks in 17 routine pipeline maintenance and inspection had increased the likelihood of accidents or oil spills; 18 • In 2004 , an internal investigation conducted by outside 19 counsel found that Richard C. Woollam ("Woollam"), manager of CIC, had a management style that had a 20 chilling effect on the reportin of HSE concerns and recommended a "thorough audit" of the corrosion 21 program data systems; 22 • The report also found that Woollam ' s "overbearing management style" resulted in managers "forcing the 23 adoption" of Woollam' s decisions, `regardless otheir reservations over them and line worker complaints about 24 them"; and 25 • CIC was operating without key personnel . The CIC Team Leader and the Senior Corrosion Engineer both left 26 the company at the end of 2004 and had not been replaced. 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 43 n

118. On March 20, 2006, The New York Times reported that, according to 2 BPXA employee, BPXA was repeatedly warned of the likelihood of an oil spill 3 due to improper pipeline maintenance: 4 5 [Ol ne of the company ' s longtime employees, a mechanic and local union official who has participated in the spill 6 cleanup , said in a telephone interview that he and his colleagues had repeatedly warned their superiors that 7 cutbacks in routine maintenance and inspection had increased the chances of accidents or spills. 8 In the interview, Marc Kovac, who is an official of the 9 United Steelworkers union, which represents workers at the BP facility, said he had seen little change in BP's 10 approach despite the warnings. 11 119. The Financial Times reported on August 7, 2006, "BP given earlier 12 warning of corrosion": 13 On May 22, 2004, Chuck Hamel, and advocate for BP workers in Alaska, took the charges directly to 14 Dr. Walter E. Massey, chairman of the environment committee of BP's non-executive board of directors. 15 In the letter, Mr. Hamel told Dr. Massey that in the 16 previous four years BP employees and contract workers had brought to him concerns about safety, health and 17 threats to the environment at Prudhoe Bay, Alaska. 18 "They seek to see the corrosion problem addressed and corrective action undertaken without further delay...," he 19 wrote in the letter.... 20 Mr. Hamel warned Dr. Massey that, as a board member, he owed it to shareholders to investigate...." 21 120. Similarly, MSNBC. com reported on BPXA's prior knowledge of 22 corrosion issues in an article published on the same day: 23 BP now admits that senior company officials were 24 warned three years ago about serious corrosion problems in the pipeline being shut down this week. 25 The warnings were laid out in correspondence.. .between 26 Chuck Hamel, and advocate for oil workers, and senior BP officials. 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 44 1 Hamel writes that BP workers had come to him predicting a "major catastrophic event" and warning that 2 `cost cutting" had caused "serious corrosion damage to 3 flow lines systems." 4 In the last few months , a number of BP workers have told the FBI that beginning in 1999, supervisors ordered them 5 to cut back on a key chemical - known as corrosion inhibitor - put into the system to protect pipes. 6 121. On August 9, 2006, in a CNNMoney. com article, Art Smith, chief 7 8 executive of John S. Herold, a Houston-based energy consulting firm, was quoted

9 as stating that the corrosion should have been caught sooner." Charles Clusen, 10 Director of the Alaska project for the Natural Resources Defense Council, is 11 12 quoted as saying the Prudhoe Bay shutdown "was almost guaranteed to happen"

13 because oil companies "have not been putting money into the infrastructure" in 14 Alaska. 15 16 122. A Bloomberg article published on August 9, 2006 reported, "BP Plc

17 was alerted by employees and contractors in a February 2004 survey that its 18 Prudhoe Bay, Alaska, pipeline network probably wasn't being adequately 19 20 monitored for corrosion."

21 123. The article also stated that BP ' s survey respondents referenced the 22 Company's cost-cutting program as possibly compromising safety at the pipeline. 23 24 Cost cuts in 1999 created "anxiety in the workforce, and that impacts safety," a 25 contractor and supplier said in the report. The article went on to state that 26 "[c]ontractors, suppliers and the conversion community were concerned about 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 45 1 BP's purported drive to support the highest standards, yet push for reduced costs inI 2 its operations." According to employees, BP also "pared spending on a corrosion 3 inhibitor in its Alaskan pipelines following the cost cuts." 4 5 124. The Bloomberg article quoted DOT PHMSA Administrator Barrett as 6 saying that "[t]he typical standard of care is far above what we saw from BP's 7 practices over the past dozen years leading up to the 2 March spill." 8 maintenance 9 125. On August 10, 2006, the Houston Chronicle reported that "BP also 10 said it takes full responsibility for the lack of upkeep that led to the severe 11 12 corrosion and shutdown." 13 126. On the same day, United States Representative Joe Barton wrote a 14 letter to then-president of BP John Browne: 15 BP has repeatedly assured the Committee that the 16 condition of the pipeline that failed in March was an anomaly, and that BP's corrosion control program was an 17 effective means to monitor and maintain pipelines and 18 infrastructure on Alaska's North Slope. News that BP production of roughly 400,000 barrels per 19 day of crude oil at Prudhoe Bay has been shut down due to excessive corrosion of its oil transit pipelines 20 contradicts everything the Committee has been told. The fact that BP ' s consistent assurances were not well 21 grounded is troubling and requires further examination. 22 Among the questions ... are: 23 Why did BP wait for the U. S. Department of Transportation to issue a corrective action order against it 24 before taking steps to adequately inspect the corroded 25 pipeline? 26 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 46 r-,,

127. On August 14, 2006 USATODAY com reported that Kemp Copeland, 2 BP's greater Prudhoe Bay field manager, stated "If we had to do it over again, we 3 would have been maintenance-pigging the lines." 4 5 128. Also on August 14, 2006, the Financial Times reported that, 6 according to oil and gas industry experts, BPXA should have been aware of the 7 corrosion caused bacteria: .8 risk of by 9 [I]ndustry experts argue that for BP to say it did not suspect microbial bacteria in its transit lines is just not 10 credible. Microbiologic influenced corrosion, or MIC as it is known in the industry, has been something 11 companies have guarded against for decades. 12 "Any prudent operator is going to be sure it does not have MIC and is going to periodically run cleaning pigs 13 to sweep out colonies if they do form," says Rick Kuprewicz, president of Accufact, a pipeline consulting 14 firm.... 15 He notes that the oil transit lines are like the main arterials on an oilfield: "If you're not looking at this 16 stuff, what's going on here?" 17 129. On August 21, 2006 , the Financial Times reported on an interview 18 with a contract worker for BPXA: 19 BP workers have taken to the federal investigators accusations that the com any skewed findings by 20 inspectin more areas of known good pipe than bad, creating blended data that left the impression that the 21 pipeline was in better shape than it was. 22 The company said it did blend data, not to determine if action needed to be taken on the pipeline but rather to 23 determine concentration levels of chemical inhibitors. 24 The veteran worker said that, starting in the late 1990s, BP reduced corrosion chemical injection, or even stopped 25 injection altogether during the final months of the year, to enable it to meet budget figures. Ronnie Chappell, a 26 BP spokesman, said it was dfficult for BP to investigate this claim because "the 1990s started 16 years ago. The 27 people and the programmt e have changed. The chemicals Ot1^ l+^011 CT 0l^ A 77TP tkP 167.li!Q [77P 77CP fham,, 28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 47 The worker said BP started using digital radiography film, which does not show the detail-that ordinary film 2 would show. 3 Digital was cheaper and while the quality has since improved the early corrosion problems were hidden, the 4 worker said. 5 6 In addition, he insisted that BP had stopped using high-technology pigging equipment to clean and 7 maintain its oil transit lines because management did not want to pay for the pigging, given a managerial 8 environment in which production was everything". 9 "The responsibility was left for the next management group, which would have come in every three to four 10 years . Then the next management would do the same thing," the worker said. 11 130. On April 30, 2007, Representatives John D. Dingell and Bart Stupak, 12 13 of the U.S. House of Representatives Committee on Energy and Commerce, sent a

14 letter to Defendant Malone expressing their concerns regarding documents that 15 emphasized budget pressures at BPXA: 16 17 The documents suggest that budget pressures were severe enough that some BP field managers were considering 18 measures as draconian as reducing corrosion inhibitor to save money. BP provided e-mails that detail proposals to 19 cut funding for corrosion inhibitor during at least two different years and in two different locations ....lf senior 20 BP managers were willing to consider turning off inhibitor at these locations, it suggests a budgetary 21 environment in which other corrosion management activities may have been eliminated or reduced to a 22 degree that may have directly affected corrosion of the portions of the oil transit lines (OTL) that experienced 23 leaks last year. 24 Similarly, the documents suggest that corrosion-monitoring efforts such as smart pig mg, 25 coupon pulling, and digging up road crossings for visual inspection, were either reduced, put on hold, or 26 squeezed in some cases due to budget constraints. In other words , important action items related to health, 27 safety , and the environment , were being delayed, or cut

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 48 1 altogether, and that this was related to tight budgets possibly in an effort to maintain "flat lifting costs." 2 131. A Reuters article regarding the April 30 , 2007 letter, and published on 3 4 the same day, reported that a committee aide stated that "the documents suggest

5 Alaska operations were operating under a culture similar to the unsafe cost cutting 6 culture criticized by the [U.S. Chemical Safety Board] at Texas City," where an 7 8 explosion at a BP refinery killed fifteen workers.

9 132. Indeed, BPXA employees are reported to have repeatedly voiced 10 concerns regarding BPXA' s practice of minimizing spending on necessary pipeli 11 12 safety and corrosion prevention. Defendants' actions throughout the Class Period

13 allowed it to meet certain budgetary goals, permitting it to continue operation of 14 Prudhoe Bay at certain profit levels at the expense of safety and maintenance. 15 16 FIRST CLAIM FOR RELIEF 17 Violation of §_10(b) of the 1934 Act And Rule 10b-5 Promulgated Thereunder 18 On Behalf of the Class Against All Defendants 19 133. Plaintiffs repeat and reallege the preceding allegations as if fully set 20 forth herein. 21 134. During the Class Period, Defendants, and each of them, carried out a 22 23 plan, scheme and course of conduct which was intended to and, throughout the 24 Class Period, did: (i) deceive the investing public, including Plaintiffs and the 25 Class; (ii) artificially inflate and maintain the market price of BP's securities; and 26 27 (iii) caused plaintiff and the Class to purchase or otherwise acquire BP securities at

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 49 r-%

1 inflated prices. In furtherance of this unlawful scheme, plan and course of 2 conduct, defendants took the actions set forth herein. 3 135. Defendants: (a) employed devices, schemes, and artifices to defraud; 4 5 (b) made untrue statements of material fact and/or omitted to state material facts 6 necessary to make the statements made not misleading; and/or (c) engaged in acts, 7 and course of business which operated as a fraud and deceit upon the 8 practices, a 9 purchasers and/or acquirers of BP securities and which maintained artificially high 10 market prices for BP securities in violation of § 10(b) of the 1934 Act, 15 U.S.C. 11 12 78j(b), and rule IOb- 5 promulgated thereunder, 17 C.F.R. 240.1Ob- 5. Defendants

13 are sued either as primary participants in the wrongful and illegal conduct charged 14 herein or as controlling persons as alleged below. 15 16 136. In addition to the duties of full disclosure imposed on Defendants as a

17 result of their making of affirmative statements and reports, or participation in the 18 making of affirmative statements and reports to the investing public, they had a 19 20 duty to promptly disseminate truthful information that would be material to

21 investors, in compliance with the integrated disclosure provisions of the SEC as 22 embodied in SEC Regulations S-X (17 C.F.R. § 210.01 et. seq.) and S-K 23 24 (17 C.F.R. § 229.01 et seq.) and other SEC regulations, including truthful,

25 complete, and accurate information with respect to, inter alia, the condition of the 26 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 50 rte. ^

1 Pipeline, so that the market price of BP securities would be based on truthful, 2 complete and accurate information. 3 137. Defendants, individually and in concert, directly and indirectly, by 4 5 of means and instrumentalities of interstate commerce of the mails, engaged and 6 participated in a continuous course of conduct to conceal adverse material 7 information about BP's operations, including the operation and production outlook 8 9 of Prudhoe Bay and in particular about the condition and maintenance of the 10 Pipeline. Defendants employed devices, schemes, and artifices to defraud, while it 11 information and engaged in acts, 12 possession of material adverse non-public

13 practices, and a course of conduct as alleged herein, in an effort to assure investors 14 of the value of BP securities. This included the making of, or the participation in 15 16 the making of, untrue statements of material facts and omitting to state material

17 facts necessary in order to make statements made about BP's operations, in the 18 light of the circumstances under which they were made, not misleading, as set 19 20 more particularly herein, and engaged in transactions, practices, and a course of

21 business which operated as a fraud and deceit upon the purchasers and acquirers of 22 BP securities during the Class period. 23 24 138. As detailed above, BP's 2005 annual report, filed with the SEC;

25 that "On March 2, 2006, a transit pipeline in the Prudhoe Bay field was discovered 26 to have spilled an estimated 4,200 to 4,800 bbls of crude oil over approximately 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 51 1 two acres." The annual report went on to assure that "The processing facility that 2 feeds into the transit line was immediately shut down. An investigation team had 3 determined that the leak was caused by internal corrosion. Spill clean-up is 4 5 complete and business operations have resumed using a separate bypass line." 6 However, neither the annual report nor any other public statement by BP disclosed I 7 BP had an inadequate pipeline maintenance and corrosion inspection program, 8 that 9 and the BP had been aware for years that Pipeline corrosion was a serious issue 10 with potentially grave consequences. The disclosure of a relatively minor 11 of the fact that the Pipeline was 12 corrosion incident without disclosure

13 under-inspected, under-maintained, and subject to a severe risk of corrosion related 14 failure constituted a material omission by Defendants that was misleading to the 15 16 investing public.

17 139. With respect to Defendants ' misstatements and omissions , Plaintiffs 18 rely upon the group pleading doctrine that creates the "presumption that statements 19 20 in prospectuses, registration statements, annual reports, press releases, or other

21 group-published information are the collective work of those individuals with 22 direct involvement in the everyday business of the company." In re Oxford Health 23 24 Plans, Inc., 187 F.R.D. 133, 142 (S.D.N.Y. 1999). Thus, all of the misstatements

25 and omissions made by BP are attributable to the Defendants. 26 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 52 01-11 "IN

1 140. As a result of the dissemination of the materially false and misleading 2 information and failure to disclose material facts, as set forth herein, the market 3 price of BP securities was artificially inflated during the Class Period. In 4 5 ignorance of the fact that market prices of BP securities were artificially inflated, 6 and relying directly or indirectly on the false and misleading statements made by 7 Defendants, or upon the integrity of the market in which the securities trade, and 8 9 the truth of any representations made to appropriate agencies as to the investing 10 public, at the times at which any statements were made, on the absence of material 11 by Defendants 12 adverse information that was known to or recklessly disregarded

13 not disclosed in public statements by such defendants during the Class Period, 14 Plaintiffs and the Class purchased or otherwise acquired for value BP securities 15 16 during the Class Period at artificially high prices and were damaged thereby when

17 the shares declined in price in reaction to the corrective disclosures. 18 141. At the time of such misstatements and omission, Plaintiffs and the 19 20 Class were ignorant of their falsity, and believed them to be true. Had Plaintiffs

21 and the Class and the marketplace known of the true financial condition of BP, 22 including the production outlook for Prudhoe Bay and in particular the condition 23 24 of, and state of, maintenance of, the Pipeline, all of which were not disclosed by

25 defendants, Plaintiffs and the Class would not have purchased or otherwise 26 acquired their BP securities during the Class Period, or if they had purchased or 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 53 1 otherwise acquired such securities during the Class Period, they would not have 2 done so at the artificially inflated prices which they paid. 3 142. By virtue of the foregoing, Defendants have violated § 10(b) of the 4 5 1934 Act, and Rule I Ob-5 promulgated thereunder. 6 143. As a direct and proximate result of the defendants ' wrongful conduct, 7 plaintiff and the Class suffered damages. 8 9 SECOND CLAIM FOR RELIEF 10 Control Person Liability Under § 20(a) of the 1934 Act Against All Defendai 11 144. Plaintiffs repeat and reallege the preceding allegations as if fully set 12 forth herein. 13 company and a control person of BP 14 145. Defendant BP was the parent

15 America and BPXA at all relevant times. 16 17 18 146. Defendant Malone was Chairman and President of BP America and a

19 control person of BP America and BPXA at all relevant times. 20 147. Defendant Browne was Chief Executive of BP and a control person of 21 22 BP, BP America, and BPXA at all relevant times.

23 148. Defendant Marshall was President of BPXA and a control person of 24 BPXA at all relevant times. 25 26 149. Defendant Johnson was BPXA's Senior Vice President of the Greater

27 Prudhoe Bay Unit and a control person of BPXA at all relevant times.

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 54 rO ^ ,ON

1 150. The Defendants acted as controlling persons of BP, BP America 2 I and/or BPXA within the meaning of the 1934 Act, as alleged herein. By virtue of 3 executive positions each had the power to influence and control and did 4 their 5 influence and control, directly or indirectly, the statements of the corporations, 6 including the content and dissemination of the various statements which Plaintiffs 7 contend are false and misleading . The Defendants were provided with or had 8 I 9 unlimited access to copies of the corporations ' internal reports, press releases, 10 public filings, and other statements alleged by Plaintiffs to be misleading prior to 11 statements were issued and had the ability to prevent the 12 and shortly after these

13 issuance of the statements or cause the statements to be corrected. 14 151. The Defendants' primary liability and controlling person liability ari 15 high-level executives of the corporations 16 from the following facts: (i) they were

17 during the Class Period and were members of the corporations' management team; 18 (ii) by virtue of their responsibilities and activities as senior officers of the 19 20 corporations, they were privy to and participated in the drafting, reviewing,

21 approving the misleading statements, releases, reports, and other public 22 representations of and about the corporations' business and operations, and in 23 24 particular about the operation and outlook of Prudhoe Bay and the condition and

25 maintenance of the Pipeline, and signed the corporations' public filings with the 26 SEC, which public filings contained the materially misleading statements; (iii) 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 55 1 knew or had access to the material adverse non-public information about the 2 corporations' business and operations, including the operations and production 3 outlook of Prudhoe Bay and in particular about the condition and maintenance of 4 5 the Pipeline; and (iv) they were aware of the corporations ' dissemination of 6 information to the investing public which they knew or recklessly disregarded was I 7 materially false of misleading. 8 9 152. In particular, each of the Defendants had direct involvement in the 10 day-to-day operations of the corporations and therefore, is presumed to have had 11 particular transaction giving rise to the 12 the power to control or influence the 13 securities violations as alleged herein, especially by virtue of their senior positions, 14 and exercised the same. 15 violated § 10(b) of the 1934 Act and 16 153. As set forth above, Defendants

17 Rule I Ob-5 by their acts And omissions as alleged-herein. By virtue of their 18 positions as controlling persons of BP or its American subsidiaries, each ofthe 19 20 defendants is liable pursuant to §20(a) of the 1934 Act. As a direct and proximate 21 result of the Defendants' conduct, Plaintiffs and the Class suffered damages. 22 IX. JURY DEMAND 23 Plaintiffs hereby demand a trial by jury as to all issues. 24 25 WHEREFORE, Plaintiffs respectfully request that the Court enter judgment

26 in favor of the plaintiff and the Class as follows: 27

28 1 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 56 I n 10-N

1 A. Determining that the instant action is a proper class action 2 maintainable under Rule 23 of the Federal Rules of Civil Procedure; 3 D. Awarding compensatory damage, jointly and severally against all 4 defendants; 5 C. Awarding interest on the foregoing amounts as allowed by law; 6 D. Awarding attorneys' fees and the costs and disbursements of this 7 action; and 8 E. Granting such other and further relief as the court may deem just and 9 proper. 10 Dated: February 29, 2008 GLANCY BINKOW & GOLDBERG LLP 11 12 By: Lionel Z. Glancy (# 134180) - 13 Peter A. Binkow (# 17384 14 Michael M. Goldberg (#188669) 1801 Avenue of the Stars, Suite 311 15 Los Angeles , CA 90067 16 Telephone : (310) 201-9150 Facsimile : (310) 201-9160 17 Email: [email protected] 18 19 LABATON SUCHAROW LLP Christopher J. Keller 20 Eric J. Belfi 21 Javier Bleichmar (pro hac vice pending) 22 140 Broadway New York, NY 10005 23 Telephone : (212) 907-0700 (212) 818-0477 24 Facsimilie : Email: [email protected] 25 Counselfor Plaintiffs Bankinter Gestion de 26 Activos, S. G.I.I. C. on behalfofBK Dividendo, the City ofEdinburgh Council 27 on behalfof the Lothian Pension Fund,

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 57 1 mbH, Frankfurter-Service Ka italanlage- GesellschaftmbH, and Piperfitters Local 2 Union #537 Trust Funds 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27

28 COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 58 CERTIFICATION

I, Charles Hannaford, Fund Administrator for the Pipefitters Local Union #537

Trust Funds ("Pipefitters") hereby certify as follows:

1. I am fully authorized to enter into and execute this Certification on behalf of

Pipefitters. I have reviewed a complaint prepared against British Petroleum plc. {`BP") alleging violations of the federal securities laws;

2. Pipefitters did not purchase securities of BP at the direction of counsel or in order

to participate in any private action under the federal securities laws;

3. Pipefitters is willing to serve as a lead plaintiff in this matter, including providing

testimony at deposition and trial, if necessary;

4. Pipefitters's transactions in the securities of BP during the class period as reflected in

Exhibit A, are attached hereto;

5. Pipefitters has not sought to serve as a representative party in a class action under the federal securities laws during the last three years, except for the following:

City ofLivonia Employees' Retirement System v. Essner et al, No. 1:07-ev-10329-RJS (S.D.N.Y.)

6. Beyond its pro rata share of any recovery , Pipefitters will not accept payment for serving as a lead plaintiff on behalf of the class, except the reimbursement of such reasonable costs and expenses (including lost wages) as ordered or approved by the Court. n

I declare under penalty of perjury, under the laws of the United States, that the foregoing is true and correct this f day ofJanuary, 2009.

Charles Hannaford Fund Administrator Pipefate Lora! Union #537 Trust Funds Exhibit A Pipefitters Local # 537

Class Period: 3/31/2005 to 8/4/2006

HP PLC SPONSORED ADR Ticker CUSIP SEDOL ISIN BP 55622104 2142621 US0556221044

Trade Settle Price Per Trans Type Date Date Shares Share Cost/ Proceeds Sale 06/13/05 06/16/05 -1,500.00 $ 62.45 $ 93,671.00 Sale 06/28/05 07/01/05 -1,100.00 $ 64.18 $ 70,540.04 Sale 07/18/05 07/21/05 -500.00 $ 65.37 $ 32,685.78 Sale 07/22/05 07/27/05 -800.00 $ 65.24 $ 52,189.81 Sale 09/30/05 10/05/05 -4,000.00 $ 71.52 $ 285,848.44 Purchase 02/03/06 02/08/06 5,000.00 $ 69.27 $ (346,600.00) CERTIFICATION

I, Geik Drever, Head of Investments & Pensions of The City of Edinburgh Council on behalf of The Lothian Pension Fund ("Lothian") hereby certify as follows:

1. I am fully authorized to enter into and execute this Certification on behalf of

Lothian. I have reviewed a complaint prepared against British Petroleum p.l.c. (LBP") alleging violations of the federal securities laws;

2. Lothian did not purchase securities of BP at the direction of counsel or in order to participate in any private action under the federal securities laws;

3. Lothian is willing to serve as a lead plaintiff in this matter, including providing testimony at deposition and trial, if necessary;

4. Lothian's transactions in the securities of BP during the class period as reflected in

Exhibit A, are attached hereto;

5. Lothian has not sought to serve as a representative party in a class action under the federal securities laws during the last three years, except for the following:

Smith et al v. Eli Lilly and Company, et al., No. 1:07-cv-01310JBW (E.D.N.Y.) Connecticut Retirement v. Amgen Inc et al, No. 2:07-cv-02536-PSG-PLA (C.D. Cal.) Steinberg v. Ericsson LM Tel. Co., No. 1:07-cv-09615-RPP (S.D.N.Y.) The City ofEdinburgh Council on Behalfofthe Lothian Pension Fund v. Vodafone Grvrrp Public Lid. Co., No. 1:07-cv-09921-PKC (S.D.N.Y.) The City of Taylor General Employees Retirement System v. SanofiAventis, No. 1:07-cv-10279-GBD (S.D.N.Y.)

6. Beyond its pro rata share of any recovery, Lothian will not accept payment for serving as a lead plaintiff on behalf of the class, except the reimbursement of such reasonable costs and expenses (including lost wages) as ordered or approved by the Court. 1 declare wider penalty of perjury, under the laws of the United States, that the foregoing is true and correct rfvsa day ofJanuary, 2008.

G ' Drever Hea f In r tments & Pensions The Cry ofEdiabingb Com,cil on behalf of The Lothia,, Pe asiou Fimd Exhibit A The City of Edinburgh Council on behalf of The Lothian Pension Fund

Class Period: 3/31/05 - 8/4/06

British Petroleum

Price Per Account Trade Type Trade Date Shares Share Currency LRC6 Purchase 26-Sep-05 155,000 6.5778 GBP LRC6 Purchase 17-Nor-05 225,000 6.4066 GDP LRC6 Purchase 22-Nov-05 131,000 6 .6330 GBP LRC6 Sale 12Jut-06 (1,891,337) 6.3984 GBP LRCA Purchase * 1-Apr-05 37,910 5.5973 GBP LRCA Sale 11-Apr-05 (21,500) 5.5955 GBP LRCA Purchase 12-May- 05 11 ,130 5.3950 GI3P LRCA Purchase* 22Jua-05 37,031 5.6326 GBP LRCA Sale 20Jul-05 (261-103) 6.3525 GBP LRCA Purchase 1-Sep -0 5 286,995 6.3939 GBP LRCA Purchase 9Jan-06 38,783 6,4403 GBP LRCA Purchase'' 13-Mar-06 39,235 6.4684 GBP LRCA Purchase* 30Jun-06 39,735 6.3939 GBP LRCA Sale 12Jul-o6 (1,072,774) 6.3984 GBP

*Purchaseis a dividend reinvestment. CERTIFICATION

We, Karl Stacker and Caroline Spccht, in the name and on behalf of f=rankfurter Service Kapitalaniage- Gesellschaft rnbH ("FSKAG") and of its funds, hereby certify as follows: 1. We are authorized signatories of FSKAG, which is a mutual fund company established pursuant to German law. FSKAG has fitll and complete authority and discretion to purchase and sell securities for its Funds, and to act as attorncy-in-Fact for the Funds with full power to bring suit for their investment losses, including serving as lead plaintiff in this action. 2. We have reviewed a complaint alleging violations of the federal securities laws prepared against British Petroleum p.l.c. ("BP"); 3. FSKAG, through its Funds, purchased BP securities during the relevant class period, but not at the direction of counsel or in order to participate in any private action under the federal securities laws-- 4. FSKAG is willing to serve as a lead plaintiff in this matter, including providing testimony at deposition and trial, if necessary; 5. FSKAG's transactions in BP securities during the class period are reflected in the attached Exhibit A; 6 FSKAG has not soughl to serve as a lead plaintiff in any class actions under the federal securities laws during the last three years. 7 Beyond the pro rata share olany recovery, FSKAG will not accept payment for serving as a lead plaintiff on behalf of the class, except the reimbursetnent atsuch reasonable costs and expenses (including lost wages) as ordered or approved by the Court. 8. We declare under penalty of peijury, under the laws of the United States of America, that the foregoing is true and correct.

Executed this 18'b clay or January, 2008.

Service te-Gesellschaft mbH

C . 6ecw I Stucker Caroline.S echt ber ofthe Supervisory Board Legal Counsel Exhibit A Frankfurter Service Kapitalanlage - Ge sells c haft mbH

Class Pertod: 3/31/U5 - 8/4/46

British Petroleum 131 PLC SI TARE_iti DI, -,50

Trade Price Per Account Type Trade Date Shares Share Currency 1311 '-I3a1 Purchase 28-Mar-06 122,300 6.67 G13P 1311W-13al Purchase 29,Jun-06 7,700 6.16 G13P I3I [^`'-13a1 Purchase 4-Jul-06 20,319 6.34 GI3P CERTIFICATION -

We, Karl Stacker and Caroline Specht, in the name and on behalfofFRANKFURT-TRUST Investment- Gesellschaie mbl' ]("FT") and of its Funds, hereby certify as follows: I . We are authorized signatories of FT, which is a mutual fiord company established pursuant to German law. FT has full and complete authority and discretion to purchase and sell securities for its Funds, and to act as attorney-in-fact for the Funds with full power to bring suit for their investment losses, including serving as lead plaintiff in this action. 2. We have reviewed a complaint alleging violations of the federal securities laws prepared against British Petroleum p.l.c. ("13P"); 3. FT, through its Funds, purchased 13P securities during the relevant class period, but not at the direction of counsel or in order to participate in any private action under the Federal securities Iaws; 4. FT is willing to serve as a lead plaintiff in this matter, including providing testimony at deposition and trial, if necessary; 5. FT's transactions in t3P securities during the class period are reflected in the attached Exhibit A; 6. Fl has not sought to serve as a lead plaintiff in any class actions under the Federal securities laws during the last three years, except the following: In re Inspire Pharmaceuticals Inc. Sec. Litig., No. 1:06-cv-0020I-WLO-RAE (M.D.N.C.) and in re Life Enrichment Poundarian v. Merrill Lynch & Co„ Inc., No. 1:07-ev-09633-1.BS (S.D.N.Y.). 7. Beyond the pro rata share of any recovery, F"1 will not accept payment for serving as a lead plaintiff on behalf of the class, except the reiniburseinent of such reasonable costs and expenses (including lost wages) as ordered or approved by the Court. 8. We declare under penalty of peijury, under the laws of the United States of America, that the foregoing is true and correct.

Executed this 18'x` day of January; 2008.

FRANKFURT-TRUST Inv stment-CieselIsehaft mbH

^ CL %e -C A2 Stacker Caroline pecht ral Manager Legal Counsel Exhibit A FRANKFURT-TRUST Investment-Gesellschaft m bH

Class Period : 3/31/05 - 8/4/06

British Petroleum 131) PLC; SH.IRF.S DI, -,50

Trade Price Per Account Type Trade Date Shares Share Curren 131111 Purchase 19-0ct-05 511,000 6,34 (1131, 131113 Sale 8-Feb-06 28,-I.I5 6.66 (..;13P 13III3 Purchase 28-Apr-06 21,697 6,87 (:13P 13'1'P Sale 23-Aug-05 ^,^i(}111 6.30 (:13P 1S'1'P Purchase I9-Oct-05 5,000 6.22 G13P 13'7'P Sale 21-Ocr-05 !'6,000) 6.11) G lip BTP Sale 21-Feb-06 3.3O(Y; 9.68 T LUR WIT Sale 5-Jul-06 ' I t),uWs 0.34 C13P Sale 6-May-O3 1,170{1l 3.43 GIlP E DI" Purchase 11Aug-05 93,000 6.61 GI1P FDF Sale 18-Nov-05) i90,)[ 0% 6 .21 CBI, 11113 Purchase 1-Apr-05 18,500 532 G131) 1113 Sale 7-ful-OS ^^UO 6.20 ClIP 11,113 Sale 25-Apr-06 (ne) {JO(F; 7.03 C;IIP FIB Purchase 28- ul-O6 30,OO0 6,40 (113P GOL Sale 12-Ocr-OS 60,2.00) 6.33 C.;BP GOI? Purchase 16-Jan-06 2,700 6.45 G131') GO1 Sale 20-Apr-06 7.02 (HIP A..H.. Purchase 30-May-06 13,00() 6.42 G13P bankinter. Javier Bollain RenWa Gestitin de Activos Director General

CERTIFICATION

I, Javier Bonain, CEO of Bankinter CGesticin de Activos, S G.I.I.C. on behalf of BK

Dividcndo ("BK Dividendo") hereby certify as follows;

1. I am fully authorized to enter into and execute this Certification on behalf oFBK

Dividendo. I have reviewed a complaint prepared against British Petroleum p.l.c. ("BP') alleging violations of the federal securities laws;

2. BK Dividendo did nor purchase securities of BP at the direction of counsel or in order to participate in any private action under the federal securities laws;

3. BK Dividcndo is willing to serve as a lead plaintiff in this matter, including providing testimony at deposition and trial, if necessary;

4. BK Dividendo's transactions in the securities of BP during the class period as reflected in Exhibit A, are attached hereto;

5. BK Dividendo has not sought to serve as a representative parry in a class action

under the federal securities laws during the last three years.

6. Beyond its pro rata share of any recovery, BK Dividendo will not accept payment for

serving as a lead plaintiff on behalf of the class , except the reimbursement of such reasonable costs and expenses (including lost wages) as ordered or approved by the Court.

I declare under penalty of perjury, under the laws of the United States, that the foregoing is true and correct this Z A day of J anuary, 2008.

a r Bollain CEO BaekintcrGevidn deAaires, S.G.I.I.C. bankinter Gestibn de Activos

Exhibit A BK Dividcndo

Class Period: 3/31/05 - 8/4/06

British Petroleum

Price Per Account Trade Type T rade Date Shales Share Cu rrency BK Dividcndo Purchasc 13Jan-06 1,500,000 6.51 GBP

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