BP Gets U.K. Government Backing on Bar to EPA Contracts

BP Plc’s (BP/) suspension from all new U.S. government contracts in the wake of the 2010 Gulf of Mexico oil spill unfairly harms the global economy and punishes company affiliates that had nothing to do with the disaster, the British government argued to a U.S. court.

BP sued the U.S. Environmental Protection Agency in August over its suspension of 20 BP affiliates along with the U.S. exploration unit, which was responsible for the worst offshore spill in U.S. history. London-based BP and its affiliates were barred from obtaining new federal contracts while existing contracts weren’t disturbed.

BP contends the global suspension is unwarranted because its exploration unit pleaded guilty to 14 felonies and paid more than $25 billion so far for penalties, private spill-related damages, clean-up and natural-resources restoration.

“EPA risks creating a powerful disincentive to cooperation in times of crisis,” lawyers for the British government said yesterday in a court filing in Houston supporting BP’s position. “Corporations may think twice before agreeing to accept responsibility, to perform remedial work or to negotiate a plea agreement if such efforts are not taken into account when the time comes to meet out other sanctions.”

Barring other BP entities that “were in no way implicated in the Deepwater Horizon incident” from doing new business with the U.S. government risks causing “serious and unjustified economic consequences” to regional economies from Australia to the U.K., the British government said.

British Government

The filing is the first by the U.K. in BP’s three-year battle over spill-related issues in the U.S. court system. The oil company’s EPA suit is separate from the thousands of spill-damage claims by coastal businesses and individuals consolidated in New Orleans federal court.

The EPA is reviewing the filing and has no immediate comment, Wyn Hornbuckle, a spokesman for the Justice Department, which is defending the agency, said today by e-mail.

The case is BP Exploration & Production Inc. v. McCarthy, 4:13-cv-02349, U.S. District Court, Southern District of Texas (Houston).

To contact the reporter on this story: Laurel Calkins in Houston at +1-212-318-2000 or laurel@calkins.us.com.

To contact the editor responsible for this story: Michael Hytha at +1-415-617-7137 or mhytha@bloomberg.net.

To contact the reporter on this story: Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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