BP Plc has been suspended from winning new federal government contracts. That’s according to a statement released by the Environmental Protection Agency today.
Earlier this month BP pleaded guilty to criminal charges in connection with the massive 2010 Deepwater Horizon oil spill. According to EPA officials, they imposed the ban because the oil giant did not show integrity during the disaster. This suspension does not affect any of the current federal contracts held by BP. The ban will continue until BP is able to show government officials that it can meet their business standards.
Currently BP Plc (NYSE:BP) (LON:BP) is one of the Department of Defense’s largest fuel suppliers, and trading on BP shares is already being affected by today’s ban. Shares dropped almost 3 percent in London trades after the EPA made the announcement.
BP Plc (NYSE:BP) (LON:BP) officials knew when the company pleaded guilty to the criminal charges earlier this month that it could mean they would lose the ability to bid on government contracts. However they said that when they entered the plea, they had not seen any indications that any government agencies would move forward with a suspension.
BP Arraigned In Court Tuesday
On Tuesday a lawyer for the oil giant appeared in court for the arraignment hearing, which took place before a New Orleans federal judge. Attorney Mark Filip entered a not guilty plea as requested by BP officials, who said they wanted to do that simply as a procedural matter. However they plan to change the company’s plea to guilty later.
A trial date for BP has been set for Feb. 4, although that court date will only happen if the criminal case against BP actually goes to trial. Currently there is a settlement offer on the table. BP (NYSE:BP) (LON:BP) has already agreed to pay $4.5 billion as part of the settlement in connection with the criminal charges and other charges from the Securities and Exchange Commission.
In addition BP could face additional civil penalties because of the large amount of oil that spilled. The oil giant will either settle with the Justice Department or face a separate civil trial. BP (NYSE:BP) (LON:BP) could be required to pay an additional $21 billion for fines related to the Clean Water Act.