US suspends contracts with British oil giant BP
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US suspends contracts with British oil giant BP

Last Updated: Thursday, November 29, 2012, 09:25
 
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US suspends contracts with British oil giant BP
Washington: The US has temporarily suspended new government contracts with the British oil and gas company BP.

The move was in response to a 2010 explosion that killed 11 people on a deepwater oil drilling rig in the Gulf of Mexico and caused the largest environmental disaster in US history.

"EPA is taking this action due to 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 Environmental Protection Agency (EPA) said in a statement Wednesday.

The timing of the suspension, it said, was linked to BP's guilty plea earlier this month on criminal charges including 11 counts of manslaughter and one count of obstruction of justice.

The company also agreed to pay a record USD 4.5 billion in penalties.

"The BP suspension will temporarily prevent the company and the named 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.

BP is a significant supplier of fuel to the US military.

Last year BP's contracts with the military surged 33 percent to USD 1.35 billion, according to data compiled by Bloomberg News.

In a statement issued after the EPA's announcement, BP said it "has made significant enhancements since the accident." The statement also said BP "launched an internal investigation immediately after the accident, publicly released the results, and has been implementing all 26 of the investigation's recommendations."

Two BP rig supervisors and a former company executive were scheduled to be arraigned Wednesday in a US courtroom on criminal charges in the case.

Robert Kaluza and Donald Vidrine are accused of ignoring high-pressure readings that should have indicated trouble just before the blowout. BP executive David Rainey is charged with hiding information from Congress about the amount of oil that was leaking from the well.

IANS



First Published: Thursday, November 29, 2012, 09:20


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