BP Federal Contracts

Following the aftermath of the BP oil spill in 2010, the dismantling of the Minerals Management Service, and
the charges against BP officials for misconduct—including counts of manslaughter—the U.S. EPA suspended
further contracts for drilling. In late 2012, the EPA temporarily barred BP from oil leases until BP could provide
sufficient evidence that the company meets federal business standards.
You work for the EPA and have been tasked with reassessing the qualifications for oil leases, based on this
event. You are expected to provide a strategy for reevaluating these contracts. As you prepare it, consider the
following questions:
What caused the failure of the lease with BP? How could this failure have been avoided?
How should BP or any other lessee be evaluated following a spill? Should the evaluation be based on the
severity of the spill? Explain.
What, if anything, should be changed about how leases are evaluated prior to signing an agreement? Explain
your reasoning.
10/8/2020 Order 327678723
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Who will evaluate the contracts? Is an outside audit necessary? Why or why not?

Sample Solution