BP wins first Defense deal since feds lifted contract ban

HOUSTON – In the aftermath of the Deepwater Horizon disaster, BP fell from its perch as the biggest provider of jet fuel to the Department of Defense, barred from doing business with the federal government in late 2012.

Nearly two years later, BP has secured its first contract with the government’s military arm since the Obama Administration lifted the company’s debarment from federal contracts in March, a Defense Department spokeswoman confirmed Tuesday.

The London oil company inked a $43 million deal with the Defense Logistics Agency late last week to supply natural gas to the Navy, Air Force, Marine Corps and federal civilian installations in California for three years starting in October.

A BP spokesman declined to comment on the deal.

It’s a drop in the bucket compared to the how much the Pentagon spent on BP’s aviation fuels before the Environmental Protection Agency intervened, a response to the Deepwater Horizon disaster that killed 11 workers on a rig in the Gulf of Mexico and sent millions of barrels of oil into the ocean.

In fiscal 2011, the oil giant had collected $1.35 billion in new contracts from the Department of Defense, higher than the second-largest supplier, Valero Energy Corp., which garnered $905.3 million that year, according to data compiled by Bloomberg.

After the EPA’s ban was lifted, BP jumped into the Gulf of Mexico bidding process on March 19, spending $41.6 million for 24 new leases in the largest U.S. offshore region, where it has about 620 leases.

It closed a deal earlier this month to sell its turbine oil business for $100 million. That business manufactured and blended oils used for lubricating aviation fuels.

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