BP will pay a record $373 million (£187 million) in fines and penalties after agreeing a peace deal with the US Department of Justice (DoJ) over investigations into the Texas City refinery blast, pipeline leaks and price fixing.

In an move BP will hope draws a line under a turbulent two years in the US, the oil giant admitted its guilt for failing to have adequate procedures in place for maintaining process equipment at Texas City, where 15 staff were killed and 180 injured in an explosion in March 2005.

The company has agreed to pay a $50 million fine in relation to the Texas City blast - the largest criminal fine ever levied by the DoJ - and $20 million for the pipeline leak at Prudhoe Bay oil field in Alaska last year.

BP will also pay a $303 million fine for manipulation of the propane market in 2004 - as reported by The Times yesterday - under a deferred prosecution agreement.

Four former BP employees were indicted by a federal grand jury in Chicago today on 20 counts of mail and wire fraud charges connected to the price-fixing scheme.

Bob Malone, BP America chairman and president, said: "These agreements are an admission that, in these instances, our operations failed to meet our own standards and the requirements of the law. For that, we apologise.

"They represent an absolute commitment to work with the government as we continue our efforts to prevent another tragedy like Texas City, to make our Prudhoe Bay pipeline corrosion programme more responsive to changing operations and to ensure that our participation in the nation's energy markets is always appropriate."

He said that BP would continue to work with the government's ongoing investigation into the circumstances leading up to the Texas City blast, but added that under a plea agreement no more criminal charges would be brought.

"If our approach to process safety and risk management had been more disciplined and comprehensive, this tragedy could have been prevented," he said.

BP's Exploration Alaska business will pay a $12 million fine over the oil spill at Prudhoe Bay, where 4,800 barrels of oil leaked out through a corroded pipe. Two separate payments of $4 million will go to the State of Alaska and the National Fish and Wildlife Foundation for Arctic enviromental research.

Mr Malone said: "This leak, and the spill that resulted from it, revealed a significant gap in our corrosion management programme - a gap that existed because our approach to assessing and managing corrosion risk in these lines was not robust or systematic enough."

BP has endured one of the worst periods of its history in the past two years with the continuing fallout from the Texas City blast and other investigations in the US threatening to engulf the business.

Third quarter profits earlier this week revealed a 27 per cent fall in underlying profits, in part because of the capacity cutbacks at its US refineries.

Tony Hayward took over as chief executive after the shock resignation of Lord Browne of Madingley in May.

Earlier this month Mr Hayward outlined a restructuring plan designed to create a "fundamental shift" in the way BP works around the world. Thousands of jobs are expected to go over the next two years as BP culls up to four layers of management to devote more resource to front-line positions.

BP yesterday announced plans to axe 350 jobs in its North Sea headquarters in Aberdeen - just over 10 per cent of its total North Sea onshore and offshore workforce.

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