BP sues US over contract ban

BP has launched a lawsuit against the US, claiming that the government's refusal to award any new work contracts to the oil and gas giant is "unjustified"

In November 2011, the US Environmental Protection Agency (EPA) announced it would not grant any new government contracts or funding to BP until the firm could demonstrate it was a “responsible company”.

The EPA banned the company from working for US federal authorities after BP pleaded guilty to 14 criminal offences related to the Deepwater Horizon disaster, which killed 11 people and released 4.9 million barrels of oil into the Gulf of Mexico.

The agency argued that BP did not meet the “required standards” necessary to work on new government oil and gas exploration contracts.

More than 18 months later, the ban, which also covers 21 of the company’s subsidiary companies, remains in place.

BP is now challenging this decision in the US district court, arguing that its exclusion from government contracts risks causing the company “irreparable harm”.

“We believe that the EPA's action here is inappropriate and unjustified as a matter of law and policy,” said Geoff Morrell, BP's head of US communications.

In July, BP estimated that cleanup, compensation and legal costs related to the Gulf of Mexico spill were going to cost the firm a total of $42.4 billion.

The oil giant is also fighting a separate legal battle over the amount of compensation claims being granted by the US courts in relation to the incident. BP is arguing that the authorities have “misinterpreted” its agreement for settlements and as a result “fictitious and inflated” claims were being rewarded.