By TENNILLE TRACY
WASHINGTON -- The Obama administration has temporarily
blocked BP from obtaining new contracts with the US government,
citing a "lack of business integrity" that resulted in the
Deepwater Horizon oil spill.
The suspension will prevent the company from buying new
oil-drilling leases or other government contracts until the
company can provide sufficient evidence that it meets federal
business standards, the Environmental Protection Agency said
The move has an immediate impact on BP. The London-based oil
giant will be prevented from obtaining new drilling leases
being auctioned off in the Gulf of Mexico Wednesday. That
auction, held by the Interior Department in New Orleans,
involves more than 20 million acres in the Western Gulf.
EPA said this type of suspension is put in place when a
"responsibility question is raised by action in a criminal
case." The agency has imposed more than 100 of these
suspensions in fiscal year 2012, an administration official
said, but a suspension involving such a well-known company with
potentially significant impacts is "fairly uncommon" for the
agency to take.
The government "take[s] these actions to ensure the
integrity of federal programs by conducting business only with
responsible individuals or companies," the EPA said. The
suspension does not affect existing contracts BP has with the
BP was unavailable for immediate comment.
Earlier this month, BP agreed to plead guilty to 11 counts
of misconduct or neglect of ship officers and other charges.
The charges stem from BP's role in the 2010 Deepwater Horizon
explosion, which resulted in the deaths of 11 workers and the
release of 4.9 million bbl of oil into the Gulf.
Wednesday's lease sale is the first to be held under a new
five-year plan adopted by the Obama administration. The sale
involves lease blocks located up to 250 miles offshore in water
depths of up to 11,000 feet.
Being kicked out of Wednesday's sale is a big hit for the
biggest producer of oil and gas in the US Gulf of Mexico, and
also one of its most active oil prospectors. The region remains
a big priority for BP, and the company has said it intends to
spend $4 billion there this year and at least that amount
annually during the next decade.
The Gulf has been where BP has struck some of its biggest
oilfields so far, including Thunder Horse, which has become the
largest production facility in the Gulf and one of the largest
oilfields in the US. More recent discoveries include Kaskida
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