BP has been temporarily blocked from new government work in the United States for a “lack of business integrity” during the Gulf of Mexico oil spill, regulators said yesterday.
The surprise ban comes just two weeks after BP admitted to 12 felony charges and paid $4.5bn (£2.8bn) in penalties related to the 2010 disaster, in which 11 workers lost their lives and miles of the US coastline were drenched in oil.
Federal suspensions do not normally last more than 18 months, the Environmental Protection Agency said yesterday.
But the ban could hamper BP’s American business, which generated over 30 per cent of the firm’s most recent quarterly profits and a fifth of its oil output.
US politician and BP critic Edward Markey welcomed the move. “When someone recklessly crashes a car, their licence and keys are taken away,” said the Democrat representative for Massachusetts.
Those closer to home were less supportive. “I don’t exonerate the mistakes they made at all, but there was a lot of political grandstanding in the way Congress and even the President reacted [in 2010], and this seems to reinforce that view,” Tim Yeo MP, chairman of the Commons energy and climate change committee, told City A.M.
“I think this is a warning not just for BP but for other foreign companies that are operating in the US. BP have done what they can reasonably be expected to do.”
BP’s existing operations in the States are not affected. As well as being the biggest driller in the Gulf, it has a billion-dollar fuel contract with the US military. BP did not participate in the final auction for drilling blocks in the Western Gulf yesterday, and it cannot be awarded any further lucrative blocks until the suspension is lifted.
The firm said yesterday it is in “regular dialogue” with the EPA and has submitted evidence that it is responsible enough to operate in the US.
The EPA’s decision raises tensions between the firm and the authorities ahead of a long-awaited court case set to start in February, in which the US hopes to prove BP was “grossly negligent” so it can extract up to $21bn in fines under the Clean Water Act.