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BP loses out on new contracts with US government (for now)

Posting in Energy

The EPA has temporarily suspended BP from winning any new contracts with the U.S. government, an action the federal agency said it took because of the energy company's conduct in the 2010 Deepwater Horizon disaster, which killed 11 workers and caused the worst oil spill in the nation's history.

BP reached an agreement earlier this month with the U.S. government to plead guilty to federal felony charges and pay $4.5 billion in penalties for its role in the Deepwater Horizon disaster.

The suspension does not affect existing agreements BP has with the government, which are considerable. BP is the top fuel supplier to the federal government with awards valued at $1.47 billion in 2011, according to the General Services Administration's top 100 contractors report. According to data compiled by Bloomberg, BP's contract's with the military jumped 33 percent from $1.02 billion in the previous year.

BP responded in a statement that stressed the temporary suspension only affects future potential contracts with the U.S. government.

The temporary ban did appear to impact BP's ability to participate in the Gulf of Mexico lease sale held Wednesday. The Interior Department said it would not award any lease to BP in the sale "unless and until" the company resolves its suspension from federal contracts, Reuters reported.

The Western Gulf of Mexico Lease Sale 229, which was held today, offered more than 20 million acres on the U.S. Outer Continental Shelf offshore Texas. Thirteen offshore energy companies submitted 131 bids. BP was not listed as a participating company in the sale, according to sales statistics released by the Bureau of Ocean Management.

BP has been awarded leases in the aftermath of the Deepwater Horizon disaster. The feds have granted BP more than 50 new lease in the Gulf of Mexico since the oil spill, according to BP.

Photo: BP

— By on November 28, 2012, 3:36 AM PST

Kirsten Korosec

Contributing Editor

Kirsten Korosec has written for Technology Review, Marketing News, The Hill, BNET and Bloomberg News. She holds a degree from Northwestern University's Medill School of Journalism. She is based in Tucson, Arizona. Follow her on Twitter. Disclosure