BP Oil Banned from New Government Contracts

The company has the 2010 oil spill in the Gulf of Mexico to thank for this

By on November 29th, 2012 07:48 GMT

News just broke that, in the aftermath of the 2010 oil spill in the Gulf of Mexico, BP Exploration and Production, Inc., BP PLC and named affiliated companies (BP) are to be banned from signing off new contracts with the US government.

This decision comes shortly after this multinational oil and gas company agreed to settle with the US government and pay a fine of $4.5 billion (€3.52 billion) in exchange for the damage caused to the American coastline when its Deepwater Horizon drilling rig exploded back in April 2010.

“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, as reflected by the filing of a criminal information,” reads the official website for the US Environmental Protection Agency.

More precisely, BP Oil is guilty of not having properly supervised the activities carried out at the Deepwater Horizon oil rig, and of failing to take appropriate measures to deal with the spill when the accident occurred.

Furthermore, the company's president of exploration for the Gulf of Mexico knowingly provided the US government with false information concerning the size of the spill, and this translated into BP losing its credibility.

As the Agency explains, this ban is not to affect the agreements BP already has with the US government. However, the company is no longer allowed to get any new contracts, grants or covered transactions.

Commenting on this ban, Republican Ed Markey explained the status quo in a straightforward manner: “When someone recklessly crashes a car, their license and keys are taken away.”

Needless to say, this means that BP can no longer bid for the 20 million acres of waters in the Gulf of Mexico the US Interior Department is planning to auction off.

Should the ban be in place for a longer period of time, it is quite likely that both BP's working agenda and its profits will be severely affected.

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