US Lifts Ban on BP GoM Ventures - Analyst Blog

Oil giant BP plc BP has reached an agreement with the U.S. Environmental Protection Agency (EPA) that allows the former to once again bid on government contracts in the Gulf of Mexico region.

The latest agreement with the EPA lifts a ban that was imposed in 2012 after the agency concluded that BP had not completely rectified the issues that led to the well blowout in 2010. The accident killed 11 rig workers, leaked millions of gallons of oil and polluted hundreds of miles of sea water.

BP had sued for lifting of the suspension, as it prevented it from renewing existing fuel contracts with the military and from leasing new offshore oil and gas properties. The pact resolves all matters related to the suspension, debarment and statutory disqualification of BP following the Deepwater Horizon accident.

The administrative agreement, valid for a period of five years, applies to all of the suspended and debarred BP entities and certain affiliated companies. The agency, however, holds the right to take counteractive action if it believes BP violates the agreement.

BP is also required to retain an independent auditor approved by the EPA for the next five years to perform annual appraisal and report to the government on conformity with the new standards.

Per the terms and conditions of the agreement, the oil and gas major will be allowed to bid for new leases as soon as next Wednesday, provided it agrees to maintain heightened safety, and abide by operations, ethics, compliance and corporate governance requirements.

BP carries a Zacks Rank #3 (Hold). Other stocks in the oil and gas industry worth considering include Helmerich & Payne, Inc. HP, Warren Resources Inc. WRES and Patterson-UTI Energy Inc. PTEN. All three stocks have a Zacks Rank #1 (Strong Buy).