Sat, Mar 15, 2014 - Page 15 News List

US signs five-year deal to allow BP to pick up contracts


The US announced on Thursday an end to its ban on BP PLC obtaining US government contracts following the 2010 Deepwater Horizon disaster in the Gulf of Mexico.

The US Environmental Protection Agency (EPA) said that BP “agreed to safety and ethics improvements” in exchange for removing the ban, which had hurt the British company’s ability to do business in the US.

The five-year deal with the EPA will allow BP to pursue new oil exploration leases in deepwater tracts in the Gulf of Mexico, which still bears many traces of the massive 2010 spill, the worst in US history.

“After a lengthy negotiation, BP is pleased to have reached this resolution, which we believe to be fair and reasonable,” BP America chairman and president John Minge said.

“Today’s agreement will allow America’s largest energy investor to compete again for federal contracts and leases,” he said.


Under the deal, BP must add and expand efforts in corporate ethics and compliance, enforce a detailed code of conduct, and meet EPA audit requirements.

It also must protect company employees who report violations and incentivize employees to pursue safety and compliance standards in their compensation agreements.

In return, BP will withdraw its own lawsuit in August against the EPA that contested the agency’s authority to apply the sweeping ban.

Craig Hooks, assistant administrator for the EPA’s Office of Administration and Resources Management, hailed the “fair agreement that requires BP to improve its practices in order to meet the terms we’ve outlined together.”

The EPA set the ban on BP getting government contracts on Nov. 28, 2012, citing the oil giant’s “lack of business integrity” in the spill and its aftermath.

Eleven people were killed and about 4.9 million barrels of oil flooded into the gulf after the Deepwater Horizon drilling rig exploded and sank.

In pleading guilty over the spill, BP agreed to pay the government US$4.5 billion to settle criminal charges in the case.

It also agreed earlier in 2012 to settle damage claims by businesses and individuals for about US$7.8 billion.


BP is the Pentagon’s main supplier of fuel in the US and abroad.

Current contracts were not affected by the EPA’s decision, but the exclusion of federal contracts prevented BP from obtaining new oil exploration leases from the government in the Gulf of Mexico.

BP’s US activities account for 30 percent of its pre-tax earnings, and the US is responsible for a fifth of its global oil and gas production.

The spill hit the oil group’s earnings for several quarters despite reserves set aside to respond to numerous claims for damages, including a US$7.8 billion deal reached with thousands of people affected by the 2010 incident.

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