Friday, May 21, 2010

Obama Shutting BP (NYSE:BP) Out of Government Contracts?

BP (NYSE:BP) (LON:BP) could find themselves locked out of U.S. government contracts after more data and information is gone over in reference to the oil spill resulting from the explosion on the Deepwater Horizon oil rig in the Gulf of Mexico.

Evidently the Environmental Protection Agency had been in talks with BP over past conduct where they had violated the Clean Air Act, and of course the loss of 15 lives at the BP refinery in Texas City, and the oil leak in lines at the Prudhoe Bay Alaska division of the company.

It seems what is being implied here is if it's found BP was negligent in this case, and added together with past problems which may be considered a pattern, the administration could bar them from holding U.S. government contracts, which could cost them billions in revenue if that's what happens.

By definition, that would mean contracts offered to oil companies in federally controlled waters.

If that is extended beyond drilling for oil and natural gas, it could be even more devastating to the company, as the also have contracts with the U.S. in other areas, for example, one worth $1.1 billion, which supplies the Defense Department with aviation fuel.

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