EPA Lifts BP Suspension, Debarment from Federal Contracts

Deepwater Horizon Gulf of Mexico Oil Spill

The U.S. Environmental Protection Agency (EPA) on Thursday lifted its suspension and debarment of BP Plc from entering federal contracts after the company pled guilty in its role in the Deepwater Horizon incident in April 2010.

Under the administrative agreement, which will take effect immediately and last five years, BP is required to retain an independent auditor approved by the EPA who will conduct an annual review and report on BP’s compliance with the agreement. Specific provisions addressing ethics compliance, corporate governance and process safety also are included in the agreement.

EPA also will have authority under the agreement to take appropriate corrective action if the agreement is breached, EPA said in a March 13 press release.

The agency coordinated on this matter with the Department of Interior, Defense Logistics Agency and U.S. Coast Guard.

“This is a fair agreement that requires BP to improve its practices in order to meet the terms we’ve outlined together,” said EPA Assistant Administrator of Administration and Resources Craig Hooks in the release. “Many months of discussions and assessments have led up to this point, and I’m confident we’ve secured strong provisions to protect the integrity of federal procurement programs.”

The suspension’s lift means that BP will once again be able to enter into new U.S. government contracts, including new deepwater leases in the U.S. Gulf of Mexico. As part of the agreement, BP also will dismiss the lawsuit filed against the EPA in Texas federal court for improper statutory disqualification and suspension, BP said in a March 13 press release.

“After a lengthy negotiation, BP is pleased to have reached this resolution, which we believe to be fair and reasonable,” said John Minge, chairman and president of BP America, Inc., in the release.

According to the EPA, suspensions are issued when there is an immediate need to protect the public interest supported by adequate evidence. Since November 2012, EPA has suspended 25 BP entities and disqualified BP Exploration and Production Inc. from performing federal contract work at its Houston corporate facility following its criminal conviction in the Deepwater Horizon case.

The suspension did not affect existing agreements BP had with the government.

Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at kboman@rigzone.com

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