A deadly explosion at BP's (search) huge refinery near Galveston, Texas, will open up the world's second biggest oil company to liabilities that could run into the billions of dollars, experts said Thursday.

The blast at the 71-year-old refinery killed at least 15 people and severely damaged some refining equipment at the nation's third-largest oil refinery, raising the specter of litigation, regulatory problems and costly reconstruction bills.

"There will be worker's compensation issues for both lost time and medical costs," said Christopher Guidette, a vice president at ISO, which provides analysis and support to help insurers manage and assess risk.

Other risk analysis sources who declined to be identified said damage to the refinery and potential litigation could put the costs of the incident over the billion dollar mark, though no detailed damage assessments are not yet available.

BP officials said the explosion happened in an isomerization unit (search), which boosts octane content in gasoline. Sources with knowledge of the refinery, which can process 470,000 barrels per day of crude oil, said the explosion occurred near other units already shut for maintenance work.

BP Chief Executive Officer John Browne said the incident reduced gasoline production from the refinery by no more than five percent. The refinery accounts for three percent of U.S. gasoline output.

At least 15 people were confirmed dead as a result of the blast, all contract workers for JE Merit, a subsidiary of Jacobs Engineering Group Inc (search).

Insurance will cover some of damage, but it's too early to tell how much, according to insurance experts.