The troubled company’s subsidiary, BP Australia, is also reportedly in the red after yesterday confirming it failed to secure government consent before importing million of litres of Iraqi oil in a potential breach of UN oil-for-food sanctions.

The 2005 explosion happened when a distillation tower at the Texas City plant was overfilled, triggering the emergency release of flammable liquid into a blowdown drum.

The 1950s-era drum overflowed, sending a liquid geyser-like release into the atmosphere where it ignited, causing the worst US industrial accident in more than 10 years, Reuters reported.

US Chemical Safety Board chairman Carolyn Merritt yesterday blamed the explosion on “aging infrastructure, overzealous cost-cutting, inadequate design and risk-blindness”.

A preliminary report by the CSB board, released on Monday, said BP executives had been aware Texas operations were “unsafe” and “antiquated” long before the refinery blast.

It recommended refineries stop using blowdown drums to contain liquid and vapour produced during operational setbacks and use flare systems to burn excess vapours.

Merritt warned that the problems uncovered at BP are common industry-wide and suggested all companies update their safety practices to prevent similar disasters.

“The experience of BP should serve as a cautionary tale to every oil and chemical company,” AFP quoted Merritt as saying.

“No corporation should believe it is immune from what happened to BP.”

The company has said it would eliminate blowdown drum units like the one in Texas City from all refineries by 2008 and will also relocate over 200 trailers, which house workers, away from refinery processing equipment.

BP has allocated $US1 billion ($A1.3 billion) to refurbish the Texas City refinery over the next five years.

A BP spokesman on Monday reportedly blamed the blast on workers not following correct procedures.

“We agree with the CSB that ultimately the explosion was a preventable tragedy, but we do not understand some of the comments issued by the CSB,” AFP quoted him saying.

“We will not comment publicly until the CSB issues its final report. We carried out a thorough investigation. We shared our findings with the CSB.”

But the CSB found there had been eight serious incidents between 1994 and 2004 involving the same type of unit that eventually blew up, setting the plant alight.

The CSB is due to release a final report on its findings next year.

BP becomes entangled in oil-for-food scandal

Meanwhile, BP Australia this week acknowledged that it did not have government approval before importing million of litres of Iraqi oil in a potential breach of UN oil-for-food sanctions.

The Australian Federal Police yesterday reportedly said it was investigating seven possible breaches of UN sanctions by Australian companies, including BP Australia, which blamed the error on an “operational oversight.”

The BP subsidiary last night confirmed it was aware of a breach that was resolved with the Department of Foreign Affairs and Trade, but said it was unsure if it was being investigated by AFP, The Australian newspaper reported.

The allegations relating to BP Australia concern a shipment of 90,0000 litres of Iraqi oil that docked in Fremantle in October 2000, on board the Poul Spirit.