BP suspended from new federal government contracts

Staff/wire report


The Obama administration put a temporary stop to new federal contracts with British oil company BP on Wednesday, citing the company’s “lack of business integrity” and criminal proceedings stemming from the Deepwater Horizon disaster in 2010.

The action by the Environmental Protection Agency bars BP and its affiliates from new government contracts for an indefinite period but won’t affect existing contracts.

In a further blow to the company, BP will be disqualified from winning new leases to drill for oil or gas on taxpayer-owned land until the suspension is lifted. The federal government planned a sale Wednesday of more than 20 million acres of offshore land in the Gulf of Mexico. BP was not eligible for that sale, the Interior Department said. An EPA official said BP was not informed about the suspension until Wednesday morning.

The decision by the federal government will not affect BP’s ability to receive permits and operate within Ohio, with the exception of new leases on federal lands, said Heidi Hetzel-Evans, spokeswoman for the Ohio Department of Natural Resources.

“Ohio has supremacy in terms of permitting,” she said.

Supremacy allows state officials to provide permits without receiving federal approval or permission.

The Pennsylvania Department of Environmental Protection said it was aware of the federal government’s action but could not comment about any impact it would have on BP’s ability to operate in the commonwealth.

In London, BP sought to minimize the effects of the suspension and said it has been informed by the EPA that an agreement to resolve the dispute is in the works. Highlighting its investments in the U.S. economy, BP said it employs 23,000 American workers and has invested more in the U.S. than any other oil and gas company.

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