On April 17, 2008, U.S. District Judge R. Gary Klausner appointed The City of Edinburgh Council as Administering Authority of the Lothian Pension Fund, Bankinter Gestion de Activos, S.G.I.I.C., Frankfurt Trust Investment-Gesellschaft mbH, Frankfurter-Service Kapitalanglage-Gesellschaft mbH, and Pipefitters Local Union #537 Trust Funds as Lead Plaintiffs and approved selection of Labaton Sucharow LLP to serve as Lead Counsel in Claude A. Reese v. John Brown and Robert A. Malone, No. 2:07-cv-07-7511-RGK (RCx)(C.D. Cal), a consolidated class action asserting claims under the Securities and Exchange Act of 1934 against Defendants BP p.l.c. (“BP” or the “Company”), BP America, Inc., BP Exploration Alaska, Inc. (“BPXA”), Steven Marshall (former head of BPXA), Maureen L. Johnson (spokeswoman for BPXA), John Browne (former BP Chief Executive), and Dr. Walter E. Massey (former outside director). Lead Plaintiffs represent a Class of all purchasers of BP ordinary shares and ADRs between March 31, 2005 and August 4, 2006.

On May 12, 2008, Lead Plaintiffs filed a Consolidated Amended Class Action Complaint. Plaintiffs allege violations of the federal securities laws against the Company arising out of the March 2, 2006 oil spill in Prudhoe Bay, Alaska and the subsequent shutdown of BP’s oil production activities on August 6, 2006 after another spill. The March 2, 2006 pipeline failure caused the spill of more than 200,000 gallons of crude oil over two acres. Plaintiffs further contend that Defendants made materially false and misleading statements and omissions since BP received repeated warnings from multiple sources and knew that its pipelines were severely corroded, repeatedly cut corrosion-inhibiting maintenance in order to reduce costs and improve profits, and failed for more than 14 years to inspect the inside of the pipelines with an in-line inspection tool that would have precisely identified the level and location of corrosion – a “smart pig.”

BP ordinary shares and ADRs suffered a price decline as a direct result of the nature and extent of materially false and misleading statements and omissions. By the time the market opened on August 7, 2006, BP had announced the shutdown of oil production at Prudhoe Bay due to the discovery of additional corrosion in more pipelines and an additional oil spill. As a result of this announcement, (i) BP ordinary shares fell 13.5 pence (from a closing price of 636 pence on August 4 to a closing price of 622.5 pence on August 7), or 2.1 percent on extraordinarily heavy volume of 94.5 million shares, and (ii) BP plc’s ADRs dropped $2.09 (from a closing price of $72.54 on August 4 to a closing price of $70.45 on August 7), or 2.8 percent, on volume of 6.1 million shares.

At Congressional hearings in September 2006 the Administrator from the Office of Pipeline Safety at the Department of Transportation, Vice Admiral Barrett, testified that BP’s failure to smart pig was “mystifying;” and that he had never encountered an operator at BP’s level that had-outright failed to smart pig its lines; and that BP should be held accountable for the spills and shutdown. On October 24, 2007, BP pled guilty to a criminal violation of the Clean Air Act for its conduct in relation with the 2006 Prudhoe Bay events. BP also paid a fine of $20 million and is subject to a 3-year probationary period.

The parties are in the process of obtaining Court approval to set a briefing schedule for Defendants’ upcoming motion to dismiss and Lead Plaintiffs’ opposition.