Oil Spill Could Mess Up BP’s Plans for Many Years : Energy: Environmental concerns may hold up further exploration in Alaska and bring about tighter regulation of tankers.

The oil spill that fouled waters off Huntington Beach Wednesday night could also darken the long-term plans of British Petroleum, the oil industry titan that chartered the ill-fated tanker.

Since BP--the world’s third-largest private oil company--only chartered the tanker that spilled oil, it won’t have to assume direct costs for the cleanup and can expect to avoid the billions of dollars in losses that Exxon Corp. is incurring in connection with the spill from the Exxon Valdez in Alaska almost a year ago.

But BP may pay in other, less tangible, ways. The spill, coming amid heightened concern about the oil industry’s environmental record, could further foreclose areas of potential oil exploration in Alaska. BP is already the largest producer of Alaskan oil, the owner of a half interest in production from the massive Prudhoe Bay field on the North Slope and half owner of the Trans-Alaska pipeline.

In addition, the spill could add momentum to efforts to regulate oil tankers--and that could add significant costs to BP, which is already the largest shipper of Alaskan crude off the California coast.

The spill may also increase awareness of the company’s name in the wrong way, just as BP is converting the 8,000 service stations nationwide that it has acquired over the years--many still carrying Mobil, Sohio and Gulf logos--into green and yellow BP stations.

“An incident like this, particularly after the Exxon Valdez, strengthens environmental resistance to opening offshore and frontier areas in Alaska, where probably the best potential for future activities exists,” said George Friesen, an energy analyst with Deutsche Bank Group in New York. “BP had ambitious plans for Alaska, and clearly they will be hurt by this.”

British Petroleum operates in the United States as BP America Inc., the subsidiary created in 1987 from the old Standard Oil Co. of Ohio, part of the oil trust founded by John D. Rockefeller Sr.

In 1987, BP bought the 45% of Sohio that it did not already own, acquiring as part of the deal Sohio’s assets in Alaska.

Worldwide, BP has been undergoing a major restructuring and management upheaval:

* It has sold off coal mines, mineral operations and other assets unrelated to its core oil, gas and chemical businesses in the last year, including $4.3-billion in mining operations.

* It has sold stakes in its prime producing properties in Alaska and the North Sea, and in September said it would sell $1.3 billion worth of North Sea properties to Oryx Energy Co. of Dallas.

* It spent $4.2 billion to buy back stock acquired by the Kuwaitis.

* It is embarking on an ambitious exploration program in East Asia and other relatively unexplored areas around the world to diversify beyond Alaska and the North Sea. Critics have pointed to BP’s over-reliance on such oil as making it a “two-pipeline” firm.

* In March, aggressive Deputy Chairman Robert Horton will take over as chairman and chief executive, replacing Sir Peter Walters, who is retiring. Horton, known for a love of deal making, is expected to continue BP’s streamlining.

BP--which is not scheduled to report 1989 fourth-quarter earnings until next week--reported net income of $1.69 billion and revenue of $35.8 billion in the first nine months of 1989, compared to income of $2.02 billion and revenue of $34.80 billion a year earlier.

Exxon reported charges of $1.38 billion in 1989 to cover the cost of its cleanup. The Exxon Valdez accident also cost BP money indirectly: BP spent an additional $100 million in Alaska state taxes after the repeal of a tax break for oil producers, and new environmental safeguards have added about $50 million to BP’s production costs.

But BP may escape massive costs from its own spill Wednesday night because it did not own the tanker that was carrying its crude to market. Federal law prevents foreign-flag tankers from operating between U.S. ports and prevents foreign companies such as BP from owning U.S.-flag tankers.

As a result, the tanker’s owner, American Trading Transportation Co., has accepted financial responsibility for the spill, said BP America spokesman Nigel Muir in Cleveland.

It is ironic that BP is thus insulated from major liability, because it moves more crude from Alaska than any other carrier: 800,000 barrels a day, an average of five tankers every two days, Muir said. BP’s worldwide oil production was about 1.4 million barrels a day in 1989, said Bernard J. Picchi, an analyst with Salomon Bros. in New York.

BP spreads its charter business among eight shippers--including the No. 2 North Slope crude producer, Atlantic Richfield Co., which dedicates two of its tankers to carry BP oil.

It is not clear what effect the spill will have on BP’s plans to expand its presence along the West Coast. Analysts have speculated for months that BP was eyeing refinery or marketing assets, particularly those of Unocal Corp. and Chevron Corp., which would give BP a place to use its Alaskan oil.

Unocal and Chevron have insisted they are not interested in selling to BP, which has played down any suggestion that it is interested in a major acquisition.

In any case, said analyst Friesen, “I think the public has short memories, and BP has long-term plans. Maybe by the time BP acts on any plans to expand in refining and marketing on the West Coast, memories of this oil spill will have receded.”

Although BP does not own the tankers that it operates along U.S. coasts, it does have a fleet of 24 tankers that ply foreign seas, said Arthur McKenzie, director of the Tanker Advisory Center in New York.

Those tankers--averaging about 127,000 tons dead weight and 14 years old--have a relatively good record of operation, he said. The two most notable incidents in the past 15 years, he said, were these: In August, 1975, a BP tanker hit a bridge as it left Antwerp, Belgium, putting a hole in its hull and spilling an undetermined amount of oil. In February, 1989, the same tanker ran into a fishing boat off Holland, sinking it, with the loss of its five-member crew, but spilling no oil.

PROBLEMS FOR SHIPPER: American Trading Transportation Co., owner of the vessel that spilled 300,000 gallons of oil off Huntington Beach, has had its share of problems.

BP AT A GLANCE

British Petroleum is a major oil, gas and chemical company with oil production primarily in the North Sea and on the Alaskan North Slope. It is half-owner of production interests on the North Slope and of the Trans-Alaska pipeline.

9 mos. ended Sept. 30

1989 1988 Revenue $35.8 billion $34.8 billion Net income 1.7 billion 2.0 billion Earnings per ADR* 3.67 3.99

12 mos. ended Dec. 31

1988 1987 Revenue $46.1 billion $46.5 billion Net income 2.6 billion 2.1 billion Earnings per ADR* 5.06 4.61

Total assets (1988): $53.075 billion

World headquarters: London

U.S. headquarters: Cleveland

Employees: 140,000

* ADR is an American Depositary Receipt, equal to 12 ordinary shares of BP stock. ADRs are the units in which foreign stocks trade on U.S. stock exchanges.

Source: BP America

Los Angeles Times