Oct 11 BP Plc on Tuesday said it would
vigorously defend itself against a federal civil suit by
Marathon Petroleum Corp alleging that it had failed to
deliver a Texas oil refinery and three products terminals in the
condition promised under a $2.4-billion sales agreement signed
"This suit is nothing more than an attempt by Marathon to
renegotiate the terms of the Texas City refinery purchase of
almost four years ago," Geoff Morrell, BP's senior vice
president of U.S. communications and external affairs, said in
an emailed statement.
Marathon took over the 459,000 barrel-per-day (bpd) refinery
in Texas City, Texas, and terminals when the transaction closed
on Feb. 1, 2013, and began finding problems that breached the
sale agreement, according to the lawsuit filed on Monday.
When sold in 2013, the Texas City refinery fulfilled the
terms of the sale agreement and met all commitments BP had made
to federal regulators, Morrell said, adding BP tried to resolve
Marathon's complaints through mediation.
"It is disappointing that immediately following the first
mediation session, Marathon chose to go to court."
Marathon also alleged BP planned to carry out an overhaul of
an aromatics recovery unit prior to the sale being complete, but
did not do so after signing the sale agreement, according to the
However, BP said it spent billions of dollars in the years
before the sale to upgrade the Texas City refinery.
"Marathon insisted on and received a discounted sales price
so it could make some additional capital investments," Morrell
said. "Marathon conducted extensive due diligence and was given
virtually unrestricted access to documents and equipment at the
The BP Texas City refinery was the site of a March 23, 2005,
explosion that killed 15 workers and injured 180 others. BP was
fined $84.6 million by the U.S. Occupational Safety and Health
Administration between 2005 and 2012 for safety rules violations
found at the refinery in investigations following the blast.
BP pleaded guilty to a federal environmental law violation
and paid $50 million to the U.S. Justice Department in 2009. BP
also paid more than $2 billion to settle lawsuits stemming from
the 2005 explosion.
Monday's lawsuit was filed in the U.S. District Court for
Southern Texas in Galveston, Texas by Marathon subsidiary
Marathon Petroleum Co LLC against BP subsidiaries BP Products
North America Inc and BP Pipelines (North America) Inc.
(Reporting by Erwin Seba in Houston and Vijaykumar Vedala in