Lifting BP ban will be more than simple agreement: source

Thu Nov 29, 2012 3:32pm EST
 
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By Timothy Gardner

WASHINGTON (Reuters) - U.S. officials were surprised that BP Plc suggested an agreement would soon be ready to lift a suspension imposed this week on the company's obtaining new federal contracts, a government source said on Thursday.

"It caught us off guard," the source said. "It's not the case that there is an administrative agreement that is ready to go out the door right now," the source said, adding that any administrative agreement will only be part of a several-step process that could take months.

The Environmental Protection Agency on Wednesday suspended BP from obtaining new U.S. contracts over its "lack of business integrity" following the 2010 Deepwater Horizon accident, that killed 11 men and caused the biggest ever U.S. offshore oil spill.

BP responded with a statement indicating that the EPA had informed the company it was preparing an administrative agreement that would "effectively resolve and lift this temporary suspension," and that the EPA said the draft agreement would be available soon.

The U.S. ban does not end the company's existing contracts. But, if it lingers, it could imperil BP's position as a top U.S. offshore oil and gas producer and as the U.S. military's leading fuel supplier.

NUMBER OF STEPS

While the ban is temporary, it could be months before BP is allowed to obtain new contracts, including oil leases off the Gulf of Mexico, because an administrative agreement is just one of a number of steps BP and the U.S. government must work through, the source said.

For instance, the November 15 plea bargain agreement between BP and the U.S. government, in which the British energy giant will pay $4.5 billion in penalties, still needs to be finalized by the court. A date for that action has not been set.   Continued...

 
BP logo is seen at a fuel station of British oil company BP in St. Petersburg, October 18, 2012. REUTERS/Alexander Demianchuk