BP Shuts a Quarter of Prudhoe Bay Output Due to Water Leak

BP shut down a quarter of its 400,000 barrels-per-day Prudhoe Bay oil field in Alaska after finding a leaky water pipe Monday, a company spokesman said.

BP workers shut down about 100,000 bpd of the field's production after finding water leaking from a 12-inch pipeline inside a processing facility that separates water from crude oil, said BP spokesman Ronnie Chappell.

Fewer than 20 barrels of water were spilled and never escaped the facility, Chappell said.

"We expect the facility to be down a few days while repairs are made," he said.

U.S. Rep. Bart Stupak, who heads the investigations arm of the House Energy and Commerce Committee, said the spill was a further sign that BP cost cutting was to blame for the poor state of infrastructure at Prudhoe Bay.

Stupak's subcommittee is probing a March 2006 oil spill at Prudhoe Bay, the biggest U.S. oil field. Internal corrosion in a pipeline that had been poorly maintained by BP was blamed for the spill, which dumped at least 200,000 gallons of crude oil onto the tundra.

A criminal investigation into the spill has been under way since last year. No charges have been laid.

Stupak has said that budget cuts at the London-based energy giant were to blame for past incidents, and said he will continue to investigate.

"While I have not seen all the facts on this most recent leak, it appears to be yet further evidence that BP's cost-cutting culture has put our nation's economy at risk," he said.

At a hearing last week, BP America Chief Executive Bob Malone conceded that "there were extreme budget pressures at Prudhoe Bay," which affected maintenance work.

BP operates Prudhoe Bay on behalf of its partners ConocoPhillips and ExxonMobil .

In the Senate, New York Democrat Chuck Schumer questioned whether BP is investing enough of its profits - which came to more than $106 billion between 1999 and 2006 - in upkeep.

"Over the last few years BP has had a bad run when it comes to maintaining its pipelines, protecting consumers, and keeping oil supplies flowing," Schumer said in a statement.

The Joint Economic Committee, chaired by Schumer, plans a hearing on Wednesday on oil industry consolidation.

© 2009 CNBC.com