U.S. judge mulls challenge to BP refinery blast plea

By Erwin Seba

HOUSTON (Reuters) - A U.S. judge said on Wednesday she will consider a victims' challenge to a proposed $50 million (25 million pound) fine and other elements of BP's (BP.L) plea agreement to resolve criminal liability in a deadly 2005 blast that killed 15 people at a Texas refinery.

U.S. District Court Judge Lee Rosenthal said she wants more information on victims' claims that BP has failed to follow conditions set down by U.S. safety regulators. Victims also have criticized the proposed $50 million criminal fine against the London-based energy giant as too low.

"The victims have raised a challenge and it is my responsibility to consider that challenge," Rosenthal said at a hearing, addressing federal prosecutors and BP attorneys who hammered out the agreement behind closed doors.

A ruling on BP's plea agreement will not come until October or later, Rosenthal said.

Rosenthal's ruling continues a legal battle that began in October when federal prosecutors unveiled the deal reached in secret with BP. Victims who were injured in the blast and survivors of those who died claim their rights were violated because they were not consulted.

The $50 million criminal penalty - which would be the biggest levied under the Clean Air Act - is part of a $373 million package of fines BP agreed to pay in October to settle a raft of charges, including a 2006 Alaska oil spill and allegations it manipulated the U.S. propane market in 2004.

Analysts said the $50 million fine pales in comparison to the $17.29 billion the company earned in 2007.

"To you and me $50 million is a lot, but on a basis that's meaningful to BP, it wouldn't even count," said analyst Bill Ferrer of W.H. Reaves & Co, a New Jersey investment firm.