ALASKA was the scene of the biggest oil spill in American history. When the oil tanker Exxon Valdez struck a reef in Prince William Sound in 1989, the stricken vessel spewed out 11m gallons of crude oil on the coast. Some 250,000 sea birds were killed and the local fishing industry was devastated.

The latest Alaskan oil spill, at just five barrels of oil, was tiny in comparison. But the 200-gallon leak at Prudhoe Bay last week has had big consequences for the British oil giant BP.

The emergency shutdown of the largest oilfield in North America, which accounts for about 8% of total US oil production, sent the price of crude soaring to a new peak. It was also the latest blow for BP’s troubled American operations, which have lurched from one crisis to another in recent months.

In March 200,000 gallons of crude oil poured out of a BP pipeline in another part of the Prudhoe Bay field, and BP was accused of having neglected long-standing problems. But the spillage finally spurred the company into action. It accelerated its programme of pipeline inspections in the sprawling Alaskan field, which produces 400,000 barrels of oil a day.

The western side of Prudhoe Bay — site of the March leak — was inspected first. Robots known as pigs, so called because of the squealing noise they make, were passed through the pipes. BP then turned its attention to the eastern side of the field.

The results of the tests on the eastern side came in last week just as Lord Browne, BP’s chief executive, visited Prudhoe Bay to show local media that the field was well maintained. The tests revealed the latest leak and “16 anomalies in 12 locations in an oil transit line” — corrosion in BP pipes feeding the main 800-mile Trans-Alaska Pipeline System that snakes from Prudhoe Bay in the north to the Valdez marine terminal in the south. Worryingly, the problems were found in unexpected places.

With a grand jury probing the March spillage, and a stream of bad news continuing to pour out of the American operation, BP decided to shut down the entire field. A day later, the company announced it would be replacing 16 miles of rotting pipeline. Late on Friday, the company said it would continue production from the western side of the field, and would ramp up production there to 200,000 barrels a day, about half the field’s total capacity.

Browne built up BP’s American arm in the 1990s with the acquisition of the American companies Arco and Amoco when the oil price was low. As well as bolstering the operations, which now account for about 40% of BP’s staff, revenue and investment, the canny acquisitions meant BP was viewed as an American firm on American turf.

But in the past 18 months, its reputation there has suffered repeated knocks. One leading analyst said: “The US operation has had most of the accidents and problems.”

Last year a fire at BP’s Texas City refinery killed 15 people and injured 500 more. The company has already set aside more than $1 billion (£528m) to settle compensation claims.

Then last month BP was hit with a lawsuit alleging it had cornered the American market in propane fuel. The suit was filed by the Commodity Futures Trading Commission. It charged that in 2004 BP traders — with the consent of senior management — “purchased enormous quantities of propane to establish a dominant position” in the market and force up prices.

Along with the civil suit over propane, BP faces a criminal investigation by the US Justice Department and class-action lawsuits brought by lawyers representing consumers. BP denied any wrongdoing and said it was prepared to fight the case in court.

Phil Flynn, energy analyst at Alaron Trading in Chicago, said: “It makes you wonder what the oversight is like at BP. Maybe the company is just too big.”

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax