US Suspends Oil Giant BP From New Federal Bids

Posted November 28th, 2012 at 7:50 pm (UTC-5)
Leave a comment

The United States has suspended British oil giant BP from bidding on any new federal contracts, in response to the company's performance during the deadly 2010 drilling catastrophe in the Gulf of Mexico.

In a statement Wednesday, the U.S. Environmental Protection Agency said it took the action “due to BP's lack of business integrity as demonstrated by the company's conduct with regard to the Deepwater Horizon blowout, explosion, oil spill and response.” The ban does not affect existing BP contracts.

The EPA said the ban could be lifted when the company can “provide sufficient evidence …demonstrating that it meets federal business standards.” BP said in a statement that it is working with the EPA to demonstrate “present responsibility.”

Eleven workers died when the oil platform exploded in April 2010, causing the worst ecological disaster in U.S. history. The platform then sank, spewing nearly five million barrels of oil into the Gulf over the next 87 days.

Wednesday's ban was announced the same day the U.S. Interior Department held a sale on eight million hectares of offshore oil and gas prospects in the western Gulf of Mexico. The department said the sale drew $133 million in bids. BP did not participate.

The ban comes two weeks after BP agreed to pay $4.5 billion to settle criminal charges in the case. Under that deal, BP will plead guilty to 11 felony counts of misconduct in the deaths of the 11 workers. Two senior BP platform managers also face manslaughter charges for allegedly ignoring warning signs in the runup to the blast. Both men entered pleas of not guilty in federal court Wednesday. Additionally, a former BP executive pleaded not guilty to charges of lying to Congress.

BP also faces a spate of civil lawsuits that could result in billions of dollars in further payouts if gross negligence is found. Some analysts have suggested the bidding ban may be part of a U.S. strategy to encourage BP to reach pre-trial settlements in those suits.