BP Banned from New Oil Contracts with US Government

Having pleaded guilty and agreed to pay $4.5 billion for criminal charges relating to the 2010 Deepwater Horizon oil spill, BP have now landed themselves in even more trouble.

The US Environmental Protection Agency (EPA) has followed standard practice and suspended BP from all federal contracts due to its ‘lack of business integrity’. This means that BP cannot bid for new lease contracts with the US government for exploration territory in the federal Gulf of Mexico, where around 20 million acres are due to be auctioned later today; although the ban does not affect any existing contracts and leases.

The EPA stated that, “Federal executive branch agencies take these actions to ensure the integrity of federal programs by conducting business only with responsible individuals or companies. Suspensions are a standard practice when a responsibility question is raised by action in a criminal case.”

Related Article: BP's Billion Dollar Settlement: Here's Where the Money Will Go

BP have remarked that they were aware of the potential that the US government might ban them from acquiring new contracts, however they were never advised that it was a certainty if they were to plead guilty to the criminal charges.

Brian Gilvary, BP’s Finance Director, told the company’s investors that they may now have to rethink their entire US business plan.

By. Joao Peixe of Oilprice.com