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| United States Suspends BP From New Contracts | United States Suspends BP From New Contracts |
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| WASHINGTON — Government officials have temporarily banned BP from new federal contracts because of the 2010 Deepwater Horizon blowout and oil spill that killed 11 workers and polluted hundreds of miles of Gulf of Mexico shoreline. | WASHINGTON — Government officials have temporarily banned BP from new federal contracts because of the 2010 Deepwater Horizon blowout and oil spill that killed 11 workers and polluted hundreds of miles of Gulf of Mexico shoreline. |
| The Environmental Protection Agency said Wednesday that it was taking the action because of BP’s “lack of business integrity” demonstrated by the accident and the company’s inability to curb the flow of oil into the gulf. BP pleaded guilty earlier this month to federal criminal charges arising from the disaster and agreed to pay $4.5 billion, including $1.26 billion in criminal penalties. | The Environmental Protection Agency said Wednesday that it was taking the action because of BP’s “lack of business integrity” demonstrated by the accident and the company’s inability to curb the flow of oil into the gulf. BP pleaded guilty earlier this month to federal criminal charges arising from the disaster and agreed to pay $4.5 billion, including $1.26 billion in criminal penalties. |
| The suspension will be effective “until the company can provide sufficient evidence to E.P.A. demonstrating that it meets federal business standards,” the agency said in a statement. The action does not affect the company’s existing federal contracts. | The suspension will be effective “until the company can provide sufficient evidence to E.P.A. demonstrating that it meets federal business standards,” the agency said in a statement. The action does not affect the company’s existing federal contracts. |
| A BP spokesman, David Nicholas, said Wednesday that despite the E.P.A.’s action, the company remained “engaged” with the agency. “We are working through a process demonstrating present responsibility,” he said, referring to the legal standard that BP needs to meet before the suspension is lifted. | |
| The British oil company is one of the American government’s largest contractors, ranking 45th with $1.47 billion in federal business in 2011, according to the General Services Administration. The company’s biggest customer is the United States Defense Department, to which it provides more than $1 billion a year in fuel. | The British oil company is one of the American government’s largest contractors, ranking 45th with $1.47 billion in federal business in 2011, according to the General Services Administration. The company’s biggest customer is the United States Defense Department, to which it provides more than $1 billion a year in fuel. |
| BP is also the largest deepwater oil and gas leaseholder in the Gulf of Mexico, controlling more than 650 blocks in water more than 1,250 deep. The Macondo well that exploded in April 2010 was in more than 5,000 feet of water. | BP is also the largest deepwater oil and gas leaseholder in the Gulf of Mexico, controlling more than 650 blocks in water more than 1,250 deep. The Macondo well that exploded in April 2010 was in more than 5,000 feet of water. |
| The Interior Department is conducting a sale of leases in the western gulf on Wednesday. Officials said that BP would be allowed to participate but it would not be granted any leases until and unless the contracting suspension was lifted. | The Interior Department is conducting a sale of leases in the western gulf on Wednesday. Officials said that BP would be allowed to participate but it would not be granted any leases until and unless the contracting suspension was lifted. |
| Specifically, an E.P.A. official said, BP will have to satisfy the terms of its plea agreement with the Justice Department before the agency will consider lifting the ban. In addition to paying the fines and penalties, the company must hire a safety monitor to oversee its deepwater operations, retain an ethics monitor to ensure that company employees do not again skirt federal laws and regulations, conduct safety and environmental audits for each drilling rig and assure that all equipment and workers meet federal safety and training standards. | Specifically, an E.P.A. official said, BP will have to satisfy the terms of its plea agreement with the Justice Department before the agency will consider lifting the ban. In addition to paying the fines and penalties, the company must hire a safety monitor to oversee its deepwater operations, retain an ethics monitor to ensure that company employees do not again skirt federal laws and regulations, conduct safety and environmental audits for each drilling rig and assure that all equipment and workers meet federal safety and training standards. |
| Officials would not speculate on how long it would take the company to meet those conditions. | Officials would not speculate on how long it would take the company to meet those conditions. |
| Representative Edward J. Markey, Democrat of Massachusetts, had earlier called for a contracting ban on BP for its actions after the spill and for misleading Congress about the rate of flow of oil from the damaged well. | Representative Edward J. Markey, Democrat of Massachusetts, had earlier called for a contracting ban on BP for its actions after the spill and for misleading Congress about the rate of flow of oil from the damaged well. |
| “After pleading guilty to such reckless behavior that killed men and constituted a crime against the environment, suspending BP’s access to contracts with our government is the right thing to do,” Mr. Markey said Wednesday. “The wreckage of BP’s recklessness is still sitting at the bottom of the ocean, and this kind of time out is an appropriate element of the suite of criminal, civil and economic punishments that BP should pay for their disaster.” | “After pleading guilty to such reckless behavior that killed men and constituted a crime against the environment, suspending BP’s access to contracts with our government is the right thing to do,” Mr. Markey said Wednesday. “The wreckage of BP’s recklessness is still sitting at the bottom of the ocean, and this kind of time out is an appropriate element of the suite of criminal, civil and economic punishments that BP should pay for their disaster.” |
| The action is potentially damaging to BP because the United States accounts for such a large part of the company’s business. Its output of oil and natural gas in the country represented 28 percent of its global production, excluding Russia, in the third quarter of this year, and about a quarter of the profit in its important exploration and production unit. | The action is potentially damaging to BP because the United States accounts for such a large part of the company’s business. Its output of oil and natural gas in the country represented 28 percent of its global production, excluding Russia, in the third quarter of this year, and about a quarter of the profit in its important exploration and production unit. |
| BP says it has invested $52 billion in the United States over the last five years, more than in any other country, and it employs 23,000 Americans. | BP says it has invested $52 billion in the United States over the last five years, more than in any other country, and it employs 23,000 Americans. |
| Iain Pyle of Bernstein Research in London said he did not think the action “particularly important” because the “suspension does not impact existing contracts, just new ones, and has no impact on oil and gas production, just the sale of products to the government.” | Iain Pyle of Bernstein Research in London said he did not think the action “particularly important” because the “suspension does not impact existing contracts, just new ones, and has no impact on oil and gas production, just the sale of products to the government.” |
| Still, he said, “it is not great news for BP as they want to do business in the U.S.” | Still, he said, “it is not great news for BP as they want to do business in the U.S.” |
| Separately, BP announced the sale of North Sea oil fields representing about 25 percent of its British oil and gas production to TAQA, an energy company that belongs to the Abu Dhabi government. | Separately, BP announced the sale of North Sea oil fields representing about 25 percent of its British oil and gas production to TAQA, an energy company that belongs to the Abu Dhabi government. |
| Peter Hutton of RBC Capital Markets in London said in a research note that that BP was receiving about $9 a barrel for the 120 million barrels of reserves — at the low end of BP’s asset sales. He estimated that BP was selling about 40,000 barrels per day of production, nearly 25 percent of its output in Britain. | Peter Hutton of RBC Capital Markets in London said in a research note that that BP was receiving about $9 a barrel for the 120 million barrels of reserves — at the low end of BP’s asset sales. He estimated that BP was selling about 40,000 barrels per day of production, nearly 25 percent of its output in Britain. |
| The transaction fits in with the strategy of Robert Dudley, the chief executive of BP, to sell mature oil fields to raise cash and concentrate on faster-growing businesses. | The transaction fits in with the strategy of Robert Dudley, the chief executive of BP, to sell mature oil fields to raise cash and concentrate on faster-growing businesses. |
| BP has now reached agreements to sell about $37 billion worth of assets since the beginning of 2010, excluding the sale of its share of the Russian affiliate, TNK-BP. BP’s disposal target is $38 billion. | BP has now reached agreements to sell about $37 billion worth of assets since the beginning of 2010, excluding the sale of its share of the Russian affiliate, TNK-BP. BP’s disposal target is $38 billion. |
Stanley Reed contributed reporting from London. | Stanley Reed contributed reporting from London. |