Ban lifted, BP can resume work for U.S. in time for new Gulf oil leases
Under an agreement reached Thursday with the U.S. Environmental Protection Agency, more than two dozen BP entities and its Houston-based oil production and exploration arm can secure new government contracts.
The company had been suspended from performing any new government work since November 2012, after BP agreed to plead guilty and to pay a $4.5 billion fine for criminal charges involving the death of 11 workers and lying to Congress about how much oil was spilling into the Gulf of Mexico.
The temporary ban barred the oil company for 16 months from leasing more offshore oil and gas properties and renewing fuel contracts with the U.S. military. The decision comes just before the Department of Interior will offer more than 40 million acres for oil and gas exploration and development in the Gulf of Mexico in March lease sales.
For five years, BP will have to abide by a series of ethics, safety and other requirements. An independent auditor will also verify its compliance with the deal.
The company also agreed Thursday to drop its lawsuit challenging the suspension.
“Today’s agreement will allow America’s largest energy investor to compete again for federal contracts and leases,” said John Minge, chairman and president of BP America, Inc., in a statement.
The new chair of the Senate Energy Committee, Sen. Mary Landrieu, praised the agreement.
“BP has rightly been held responsible in a court of law and should continue to make whole the individuals and businesses that were impacted by the oil spill, but barring them from entering new contracts on top of that amounted to double jeopardy and set a terrible precedent that I hope will not be repeated,” said Landrieu, D-La. “The good news is that BP will now be able to participate in next week’s lease sale that will bring much-needed revenue to Louisiana and other oil-producing states along the Gulf Coast.”
Tyson Slocum, director of Public Citizen’s Energy Program, criticized the move for letting BP “off the hook.” The company “has failed to prove that it is a responsible contractor deserving of lucrative taxpayer deals,” he said.
The April 2010 spill occurred after BP’s Macondo well blew out, causing the Deepwater Horizon drilling rig to explode, killing 11 workers. Millions of gallons of oil spewed into the Gulf, with crude soiling shoreline and beaches from Louisiana to Florida.