BP faces temporary ban from new US contracts

BP has been temporarily suspended from new contracts with the US government, the Environmental Protection Agency (EPA) has said. While it is unclear how long the ban will last, it follows BP’s record fine earlier this month over the 2010 oil spill in the Gulf of Mexico.

The EPA said it was taking action due to BP’s “lack of business integrity” over its handling of the blowout. But BP said it had spent $14bn (£8.8bn) on its response to the spill.

“The BP suspension will temporarily prevent the company and the named affiliates from getting new federal government contracts, grants or other covered transactions until the company can provide sufficient evidence to EPA demonstrating that it meets federal business standards,” said the EPA in a statement.

“Suspensions are a standard practice when a responsibility question is raised by action in a criminal case.” The EPA and BP both said that the temporary ban would not affect existing agreements BP has with the government.

The oil giant added that the suspension may in fact be lifted quite soon. “The EPA has informed BP that it is preparing a proposed administrative agreement that, if agreed upon, would effectively resolve and lift this temporary suspension,” BP said.

“Over the past five years, BP has invested more than $52bn in the United States – more than any other oil and gas company, and more than it invests in any other country where it operates. On top of this business investment, BP has to date spent more than $14bn in operational response and clean-up costs.”

Since the Deepwater Horizon accident, the US has granted BP more than 50 new leases in the Gulf of Mexico, where the company has been drilling safely since the government moratorium was lifted.

For now, BP is to be excluded from the lease of new exploration fields in the Gulf of Mexico, including some 20 million acres that was auctioned on Wednesday.

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