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Permian Discount Could Rise To $20 Per Barrel

Permian Discount Could Rise To $20 Per Barrel

Midstream constraints plaguing Permian drillers…

BP Not Going Down Without a Fight – Set to Sue the Federal Government

On Monday BP filed a case against the US Federal Government, citing the decision to block BP from bidding on and securing new lucrative contracts to supply fuel and other services. In relation to the 2010 Gulf of Mexico oil spill, BP has pleaded guilty, admitting to charges of manslaughter and obstruction of justice, and based on this the Environmental Protection Agency (EPA) decided to prevent the company from winning any new contracts.

BP claims that this is abuse of the EPAs power.

BP has asked a judge at the US District Court in Huston to lift the suspension and allow them to bid on the new contracts, claiming that they have already missed out on potentially billions of dollars of business with the government.

BP was in the midst of negotiating an agreement with the EPA for its involvement in the Deepwater Horizon spill, when the suspension was placed upon them last November, preventing them from bidding on new contracts worth as much as $1.9 billion dollars.

Related article: Junior Time in the Gulf of Mexico Shelf

The contracts were with the Defense Logistics Agency, a support unit that provides the Navy, Air Force, Marines Crops, and other federal agencies with logistical and technical services.

BP has been a major supplier of fuel to the US military for many years, holding contracts with the government that are worth more than $1.34 billion, and through which it supplies jet fuel, marine diesel fuel, aviation fuel, commercial airport refuelling services, bulk fuel storage, lubricants, and natural gas.

On the 29th of January BP pleaded guilty to charges of manslaughter, obstruction of Congress, and other criminal charges, and agreed to pay a $4 billion penalty charge to the Justice Department. The EPA has said that until BP can settle an administrative agreement, the suspension will continue in affect, although in this recent case filing, BP claim that the suspension should have ended with the end of the criminal case.

In March the Interior Department told BP that it may bid in a Gulf of Mexico lease sale, however if successful and still considered under the power of the EPA suspension, the lease would have to be disqualified.

By. James Burgess of Oilprice.com



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