LONDON — BP has filed suit against the United States government to overturn the temporary suspension of most BP entities, including its exploration arm, from federal contracts.
The suit, filed Tuesday in federal court in Texas, seeks to overturn the ban, which was imposed in November by the Environmental Protection Agency. The agency cited BP for “lack of business integrity” as demonstrated by its role in the 2010 Gulf of Mexico disaster.
The ban’s most significant impact is preventing BP from gaining new oil and gas leases in the United States. That suspension, for instance, is likely to be hampering the company’s activities in the Gulf of Mexico, where it has been unable to bid on new leases since the ban was imposed.
BP’s output in the Gulf of Mexico, a key profit center, has dropped sharply because of divestments of oil and gas fields there, as well as the moratorium on drilling that was imposed after the spill and has now been lifted.
Robert W. Dudley, BP’s chief executive, says that although BP has enough leases in the gulf, not being able to participate in acreage auctions limits the company’s ability to maneuver and keep pace with rivals like Royal Dutch Shell and Chevron.
“We believe that the EPA’s action here is inappropriate and unjustified as a matter of law and policy, and we are pursuing our right to seek relief in federal court. At the same time, we remain open to a reasonable settlement with the EPA,” BP said Tuesday.
The EPA move came after BP reached an agreement with the United States Department of Justice last November to plead guilty to criminal charges and pay $4.5 billion in penalties.
Taking the United States government to court appears to be part of an overall shift to a tougher approach by the oil giant, which is based in London. BP executives believe the company has already paid a very stiff price for the spill — in addition to the penalties paid, it has already taken $42.4 billion in provisions — and they are frustrated that new issues keep cropping up. The company’s chief financial officer, Brian Gilvary, said on July 30 that BP wanted to reach “closure” on the episode.
BP executives appear to be concluding that their conciliatory approach has not been working as well as they had hoped. “We want everyone to know that we are digging and well prepared for the long haul on legal matters,” Mr. Dudley said on July 30.
Article source: http://www.nytimes.com/2013/08/15/business/global/bp-sues-us-over-contract-suspensions.html?partner=rss&emc=rss