Fri, Nov 30, 2012 - Page 15 News List

BP banned from further US government contracts

STANDARDS LACKING:Following financial settlement of criminal charges related to the 2010 Deepwater Horizon blowout, BP was accused of lacking business integrity


British oil giant BP was temporarily banned from winning new US government contracts on Wednesday after agreeing to plead guilty to criminal charges over the deadly 2010 Gulf of Mexico oil spill disaster.

Two weeks after BP agreed to pay US$4.5 billion to settle criminal charges in the case, the US Environmental Protection Agency (EPA) said the firm was barred from obtaining new contracts until it can prove it meets US government business standards.

“The EPA is taking this 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 agency said in a statement.

The EPA cited BP’s admission of guilt on Nov. 15, to 11 counts of manslaughter, one count of felony obstruction of the US Congress and two environmental violations arising from the April 20, 2010, well blowout, which caused the worst ecological disaster in US history.

The blowout and sinking of the Deepwater Horizon drilling platform left 11 people dead and spewed 4.9 million barrels of oil into the Gulf of Mexico over 87 days, blackening beaches in five US states.

The EPA said the ban on BP and its affiliates from receiving federal contracts will continue “until the company can provide sufficient evidence to EPA demonstrating that it meets federal business standards.”

The order does not affect existing contracts.

BP said in a statement that it hopes to have the ban lifted as quickly as possible and has been working with the EPA to prove it can meet US federal standards.

However, BP’s legal woes are far from over. It must still resolve a civil case over environmental fines which could amount to as much as US$18 billion if gross negligence is found. It also remains on the hook for economic damages, including the cost of environmental recovery.

Earlier this year, BP reached an agreement to settle claims from fishermen and others affected by the disaster for US$7.8 billion, but the agreement must still be approved by a US federal judge.

BP has signaled it will continue to aggressively pursue damages from rig operator Transocean and well operations subcontractor Halliburton, which BP blames for faulty work leading up to the blowout.

In New Orleans, Robert Kaluza, 62, and Donald Vidrine, 65 — the highest-ranking BP supervisors onboard the Deepwater Horizon platform at the time of the deadly blast — pleaded not guilty on Wednesday to felony manslaughter charges.

Prosecutors said the men had ignored “glaring red flags that the well was not secure” and failed to take “appropriate action” to prevent the blowout, but their defense lawyers said they are being used as scapegoats.

“The problem with this is that Congress and others demand human flesh to pay for terrible casualties like this,” Kaluza’s lawyer, Bob Habans, told reporters on the courthouse steps.

“This time they chose Donald Vidrine and Bob Kaluza as the scapegoats,” he said.

Kaluza and Vidrine face up to 10 years in prison on each of 11 counts of seaman’s manslaughter and eight years in prison on each of 11 counts of involuntary manslaughter.

Former senior BP executive David Rainey was charged in a separate indictment with obstructing a congressional investigation, making false statements to law enforcement officials and for allegedly downplaying the extent of the spill.

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