WASHINGTON - The Obama administration put a stop to new federal contracts with BP on Wednesday, admonishing the British oil company for a "lack of business integrity" and also disqualifying it indefinitely from winning new leases to drill on taxpayer-owned lands.
A lengthy list of criminal counts against BP stemming from the Deepwater Horizon disaster in the Gulf of Mexico in 2010 prompted the Environmental Protection Agency to temporarily suspend new contracts with BP and its affiliates. Existing contracts won't be affected.
"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 EPA said in a statement.
Eleven oil workers were killed when a rig explosion sent oil gushing into the gulf in the largest oil spill in U.S. history. More than two years later, BP faces criminal proceedings and huge civil claims related to environmental damage.
On Wednesday, two BP rig supervisors and a former executive pleaded not guilty to criminal charges in the explosion and the company's response.
Well-site leaders Robert Kaluza and Donald Vidrine and BP's vice president of exploration for the gulf, David Rainey, remained free on bond after their arraignments Wednesday in federal court in New Orleans.
Kaluza and Vidrine are charged with manslaughter in the deaths of 11 rig workers. They are accused of disregarding abnormally high pressure readings that should have been glaring indications of trouble just before the blowout.
Rainey was charged separately with concealing information from Congress about the amount of oil that was leaking.
Regarding the EPA suspension, the London-based company sought to minimize the effects, saying it was working with the government to resolve the concerns. BP said it had been told by the EPA that an agreement that would lead to lifting the suspension was in the works.
A leading supplier of energy for the U.S. military, BP in September won two contracts with the Defense Department to provide almost $1.4 billion in fuel products over a yearlong period, according to federal contracting announcements. Those contracts, and any others already signed with other U.S. agencies, will remain in effect.
Of greatest concern to BP, analysts said, is the prospect of missing out on tens of millions of acres that the government plans to lease for drilling to oil and natural gas companies in the coming months.
The action made BP ineligible to bid for leases hours before the government held a sale for drilling in more than 20 million acres offshore in the gulf. Thirteen offshore companies submitted bids totaling more than $133 million. BP did not participate. The government's next sale is scheduled for March and will make 38 million acres available.