BP banned from winning new U.S. Government contracts

BP banned from winning new US government contracts


BP has been temporarily banned from winning new contracts with the US government, as regulators accused the British oil giant of a "lack of business integrity" over its handling of the Gulf of Mexico oil spill.








BP, which pleaded guilty to criminal charges relating to the 2010 oil spill, will be prevented from winning new contracts until the oil giant can demonstrate it meets business standards set by the government, the Environment Protection Agency (EPA) said on Wednesday. Photo: Rex Features






By Szu Ping Chan

2:31PM GMT 28 Nov 2012

131 Comments




BP, which pleaded guilty to criminal charges relating to the 2010 spill, will be prevented from winning new contracts until the oil giant can demonstrate it meets business standards set by the government, the Environment Protection Agency (EPA) said on Wednesday.





"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," it said in a statement.


BP, one of the largest suppliers of fuel to the US Department of Defense, saw its shares fall by as much as 3pc to 418.7p in London trading following the announcement.


The EPA said the move was "standard practice when a responsibility question is raised by action in a criminal case."

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This is very unfortunate for BP, but American Oil Companies were also culpable but the U.S. has ignored this.





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The ban includes a sale of about 20 million acres off the Texas coast due to take place today.

Earlier this month, BP pleaded guilty to manslaughter over the deaths of 11 men in the Gulf of Mexico disaster and agreed to pay $4.5bn (£2.8bn) in a record settlement with US authorities.

At the time, analysts said that the settlement could help the British oil giant to escape a temporary ban.

BP spokesman David Nicholas couldn’t immediately comment on the statement.

BP has also warned that it could remain mired in litigation over the Gulf of Mexico disaster until 2015.

The company is yet to resolve civil claims, due to be heard at a trial starting in February.

A history of BP's US disasters


BP has settled criminal misconduct claims in the 2010 Deepwater Horizon disaster in a deal with the US Department of Justice. Here is a short history of BP's recent accidents and spills in the US.








An explosion ripped through the Deepwater Horizon offshore oil drilling rig in the Gulf of Mexico, killing 11 workers and injuring 17 others Photo: EPA





By Reuters

3:16PM GMT 15 Nov 2012

2 Comments




March 23, 2005: Explosion at BP's Texas City, Texas, refinery kills 15 workers and injures 180 in one of the worst industrial accidents in US history. The explosion occurred when hydrocarbon liquid and vapor were released from a "blowdown stack" and ignited. BP admitted that safety procedures were ignored. BP paid over $2bn (£1.26bn) to settle legal claims from the explosion, as well as $71.6m for worker safety violations and $100m in pollution fines.


2006: Two leaks at BP's giant Prudhoe Bay oilfield in Alaska in March and August of 2006 created the largest oil spill ever in Prudhoe Bay, the biggest US oil field. The first leak spilled more than 200,000 gallons (760,000 litres) of crude oil over the tundra, and a second smaller leak forced BP to shut down production on the eastern side of the oil field. According to the US government, BP failed to heed warning signs of imminent internal corrosion. BP in 2007 agreed to pay a $12m criminal fine, $4m in community service payments and $4m in criminal restitution to Alaska.


November 29, 2009: Pipeline leaks oily material onto the tundra at BP's 30,000 barrel per day Lisburne field in Alaska adjacent to the Prudhoe Bay field. A crack in a flow line that serves Lisburne spilled around 46,000 gallons of a mixture of oil and water on to the snowy tundra.


April 20, 2010: Explosion aboard the Deepwater Horizon drilling rig kills 11 rig workers and unleashes the worst offshore oil spill in US history, with 4.9m barrels of oil released into the Gulf of Mexico. BP has agreed to pay an estimated $7.8bn to settle claims from individuals and businesses from the spill, but still faces possible civil and criminal penalties from the disaster. A federal trial in New Orleans is scheduled to convene on February 25, 2013.


July 16, 2011: Pipeline leaks oily material onto the tundra at BP's Lisburne field. BP said a pipeline ruptured during testing and spilled a mixture of methanol and oily water onto the tundra. Alaska regulators said the spill amounted to 2,100 to 4,200 gallons, affecting 4,960 square feet (460 square metres) of gravel pad and about 2,040 square feet of wet and aquatic tundra.



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June 25, 2012: Explosion during maintenance on a pipeline at BP's Pinon natural gas compressor station near Bayfield in western Colorado kills one worker and injures two others.

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This is a bit of an eye opener, I didn't realise BP's reputation was so bad.