Even though it was suspended from obtaining new federal contracts, BP plc will be allowed to bid in the Gulf of Mexico (GOM) Central Lease Sale 227 on Wednesday (March 20), the Department of Interior said.
However, Interior said in a notice that if the oil major is the highest bidder and remains under suspension when the lease is awarded, it would be disqualified. The leases are awarded 90 days after a sale. “Concurrently, the previous second highest bidder will assume the position of the highest responsible qualified bidder,” the notice said.
BP had no comment on whether it planned to participate in the sale. BP was a no-show in last November’s Western GOM lease auction, which came on the heels of the temporary suspension (see Daily GPI, Nov. 29, 2012b).
Despite the fallout from the Macondo well blowout three years ago, BP continues to be the largest leaseholder in the GOM with an estimated 750 leases (see Daily GPI, March 7). It also is one of the most active drillers with seven deepwater rigs now in operation.
Last November the U.S. Environmental Protection Agency temporarily suspended BP and its affiliates from new contracts, grants or other covered transactions with the federal government until it provided “sufficient evidence” that it met federal business standards (see Daily GPI, Nov. 29, 2012a). The suspension came after BP pleaded guilty to 11 felony counts and agreed to pay more than $4.5 billion in fines to settle criminal claims (see Daily GPI, Nov. 16, 2012). A civil trial related to the spill is under way in New Orleans.
Central Lease Sale 227, to be held in New Orleans, is offering 38.6 million acres offshore Louisiana, Mississippi and Alabama, which could lead to an estimated 1 billion bbl of oil and 4 Tcf of natural gas (see Daily GPI, Feb. 8). The sale, includes all unleased areas in the Central GOM Planning Area and would be the second sale under the Obama administration’s Outer Continental Shelf program for 2012-2017 and the first of five in the Central GOM.
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