The Gulf contract ban on BP plc has been lifted
BP plc has just received the green light to compete against other oil companies for contracts in the Gulf of Mexico again.
The decision comes four years after the 2010 Deepwater Horizon explosion and oil spill that suspended BP from conducting new business in the area.
The ban on BP was imposed by the EPA in 2010 because the company did not adequately fix issues that caused a well blowout that killed 11 workers and leaked millions of gallons of oil.
The lift of the ban comes following an agreement established between BP and the Environmental Protection Agency (EPA) which has allowed the oil giant to carry out new projects in the area under the condition that it follows certain safety measures.
In August 2013, BP sued the EPA over the ban, claiming that the EPA was abusing its powers in addition to exceeding its statutory authority by not letting the company compete for new contracts in the Gulf.
However, the lift on the ban means that BP will drop its lawsuit against the EPA – which was filed in federal court in Texas.
Bob Dudley, CEO of BP, said that the Gulf is an especially important and strategic area for the company’s future oil and natural gas operations.
In 2013 BP produced 63.6 million barrels in the Gulf (second only to Shell). The agreement will enable BP to strengthen its position in the Gulf.
According to the President and Chairman of BP America, John Mingé:
“After a lengthy negotiation, BP is pleased to have reached this resolution, which we believe to be fair and reasonable.”
Craig Hooks, an assistant administrator for the EPA said:
“This is a fair agreement that requires BP to improve its practices in order to meet the terms we’ve outlined together. I’m confident we’ve secured strong provisions to protect the integrity of federal procurement programmes.”
BP agreed to allow an independent auditor to monitor and report on the company’s operations to the EPA.
However, some believe that lifting the ban is wrong – given the damage that the BP oil disaster caused.
Tyson Slocum, the director of Public Citizen’s Energy Program, commented on the news:
“The announcement lets a corporate felon and repeat offender off the hook for its crimes against people and the environment.”
Mr. Slocum added:
“This is a company that was on criminal probation at the time of the 2010 Deepwater Horizon disaster, and it has failed to prove that it is a responsible contractor deserving of lucrative taxpayer deals.”