Americas

Home page

Americas

BP says suspension does not affect existing contracts in U.S.

29 November 2012 03:11 (UTC +04:00)

Baku-APA. British oil giant BP said Wednesday the U.S. Environmental Protection Agency (EPA)'s decision to temporarily suspend it from getting new contracts with the U.S. government only affects the company's future potential contracts and does not affect existing contracts it has with the U. S. government, APA reports quoting Xinhua.

The EPA announced Wednesday that BP has been temporarily suspended from getting new contracts with the federal government, a move that could put billions of dollars at stake, as a result of BP's devastating oil spill in the Gulf of Mexico in 2010.

The EPA said in a statement that it is taking the action because of "BP's lack of business integrity as demonstrated by the company's conduct with regard to the Deepwater Horizon blowout, explosion, oil spill, and response."

The agency also cited the felony manslaughter and other charges filed against the company by the Justice Department on Nov. 15.

"The temporary suspension does not affect any existing contracts the company has with the U.S. government, including those relating to current and ongoing drilling and production operations in the Gulf of Mexico," BP said in a statement on Wednesday.

The EPA's action is pursuant to administrative procedures providing for discretionary suspension until a company can demonstrate "present responsibility" to conduct business with the U.S. government, BP said.

BP said in the statement that EPA has informed the company that it is preparing a proposed administrative agreement that, if agreed upon, would effectively resolve and lift the temporary suspension."

The EPA notified BP that such a draft agreement would be available soon," BP said.

The suspension will temporarily prevent BP and certain affiliates from getting new federal government contracts, grants or other covered transactions until the company can provide sufficient evidence to EPA demonstrating that it meets federal business standards, the EPA said.

The EPA's move will affect at least some of BP's activity on the outer continental shelf, where it is among the largest oil and gas producers, according to analysts.

Thought it was not immediately clear exactly how much money was at stake for BP, analysts said the EPA move could be a significant blow to BP, depending on how long the suspension lasts.

BP entered a not-guilty plea in the federal court in New Orleans on Tuesday as a procedural move. A BP lawyer reiterated the company's plan to plead guilty at a later date as part of a 4. 5-billion-dollar settlement with the U.S. government.