The U.S. Environmental Protection Agency announced on Wednesday that supermajor oil company BP plc (BP) will be temporarily suspended from being awarded new United States government contracts in the fallout from 2010′s Deepwater Horizon oil spill disaster.
Two weeks ago the UK-based company agreed to plead guilty in charges from the disaster in the Gulf of Mexico ago that resulted in eleven deaths and the nation’s largest offshore oil spill in history. The oil company is facing fines at around $5 billion and charges in manslaughter.
The suspension from obtaining US government contracts is just the latest in the fallout from the disaster two years ago. The EPA said this latest punishment was due to a “lack of business integrity as demonstrated by the company’s conduct with regard to the Deepwater Horizon blowout, explosion, oil spill, and response.”
The United States government has been under a lot of pressure to bring down substantial fines and punishment to BP after one of the country’s largest man-made natural disasters. The devastation caused by the spill on April 20, 2010 has had a large effect on the tourism and commercial fishing industries in the Gulf Coast region, not to mention the lives of those in the communities in the surrounding areas.
However, this latest act in suspending contracts awarded to BP might just be just a temporary act to draw heat away from the company and the government for a short time. Regardless of the intentions by the US government, it will take time to see how these recent punishments will affect the big picture for BP.
BP shares were down 65 cents, or -1.57%, in morning trading on Wednesday.
BP plc (BP) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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