March 19, 2014 / 8:47 PM / 5 years ago

UPDATE 1-BP bids in Gulf of Mexico lease sale after U.S. lifts ban

* Sale garners $872 mln in high bids in central, western Gulf

* BP wins 24 bids for $41.6 million

* Freeport McMoRan scores high bid at $68.79 million (Updates with detail about bids, sale results, adds byline)

By Kristen Hays

HOUSTON, March 19 (Reuters) - BP Plc rejoined bidders for exploration and production leases in the Gulf of Mexico on Wednesday and won 24 tracts after the U.S. government lifted a 16-month ban barring the company from new federal contracts.

The Environmental Protection Agency in late 2012 barred BP from bidding on new federal contracts, citing a “lack of business integrity.” The action came after the company’s 2010 Macondo oil well blowout killed 11 rig workers and unleashed more than 4 million barrels of crude into the Gulf in the worst offshore oil disaster in U.S. history.

Last week, the EPA lifted the ban which barred BP from bidding on new Gulf leases as well as other new contracts, such as fuel supply for the U.S. military. The deal came after the oil major committed to a set of safety, ethical and corporate governance requirements.

BP had sued over the ban, saying the company was being unfairly penalized. The company, which had maintained its current contracts worth more than $1.34 billion, last participated in a lease sale in June 2012.

BP submitted 31 bids on Tuesday for Wednesday’s sale, and was the high bidder on 24 bids for $41.6 million, spokesman Brett Clanton said.

However, none reached the top 10 bids for tracts in the central Gulf. Freeport McMoRan Copper & Gold Inc, won six of the top 10 bids for more than $272 million, including the highest bid of $68.79 million, according to the U.S. Bureau of Ocean Energy Management (BOEM).

Freeport re-entered U.S. oil and gas exploration last year with its $9 billion acquisition of Plains Exploration and Production Co and McMorRan Exploration Co, the latter of which Freeport spun off a decade ago.

In 2012, Plains moved into the deepwater Gulf with its acquisition of three of BP’s older oil and gas fields and a Royal Dutch Shell stake in a BP field for $6.1 billion. Freeport announced the deal to buy Plains three months later.

BP had been selling assets to refocus on higher-producing Gulf assets as well as help cover its spill-related costs, which have reached about $42 billion.


BOEM said there were 383 bids in all from 43 companies in deep and shallow water areas in the central and western Gulf.

Overall, the sales in the central and western parts of the Gulf brought in $872 million in high bids on 329 tracts.

Chevron Corp was the second-highest bidder in the sale, and its two bids for $98.1 million included the No. 2 bid of $62 million.

Rounding out those top bids was $43.5 million from Royal Dutch Shell PLC and a $30 million joint bid from Colombia’s state-run Ecopetrol SA and Murphy Oil Corp .

Exxon Mobil Corp was the sole bidder in the western sale, winning three tracts for $21.3 million. (Reporting by Kristen Hays; Editing by Jeffrey Benkoe and Marguerita Choy)

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