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BP Plc, the world's second-largest publicly traded oil company, said a U.S. federal grand jury is investigating a
March oil spill in Alaska, damaging a reputation already suffering from a refinery blast last year.

BP Alaska President Steve Marshall sent an e-mail to employees May 30 telling them to cooperate with
investigators after the company got a grand jury subpoena April 26, David Nicholas, a BP spokesman in
London, said today.

The leak of about 6,400 barrels of crude oil from a pipeline in Prudhoe Bay, Alaska, was discovered on March
2, almost a year after BP suffered an explosion at a refinery in Texas City, Texas, that killed 15 workers and led
to the biggest-ever fine by U.S. refinery safety regulators.

``It's another problem for BP on the safety and environmental side,'' said Peter Hitchens, an analyst at Teather &
Greenwood Ltd. in London who has a ``buy'' rating on BP. ``They may get a fine, but for a company of BP's
size, it's not the end of the world.''

A federal grand jury has the power to evaluate and issue criminal charges against a company or individual,
which may ultimately lead to fines or prison time at a subsequent trial.

BP Chief Executive Officer John Browne was paid a lower performance bonus in 2005, partly because BP's
safety performance was ``impaired.'' Browne still got 1.75 million pounds ($3.2 million) in his performance
bonus last year, down from 2.28 million pounds in 2004. The March 2005 Texas City explosion led to a fine of
$21.4 million.

Corroded Pipe

The Alaskan leak was caused by internal pipeline corrosion, spilling oil over 1.9 acres of tundra and frozen lake
surface, according to a joint investigation team that included Alaska's environmental conservation department.
The 6,400 barrels, or 270,000 gallons, of spilled crude oil would be enough to fill the fuel tanks of 12,000 Ford
Explorer cars.

The worst oil spill in U.S. history was the 1989 grounding of the Exxon Valdez tanker in Alaska's Prince
William Sound. It dumped 11 million gallons of crude, for which Exxon Mobil Corp. paid $900 million in fines.

Nicholas said BP expects any investigation will show it acted properly. The inquiry was reported earlier by the
Financial Times.

BP shares fell 3.4 percent to 603 pence in London today. The stock is up 7.3 percent in the past 12 months.