The US has lifted a ban on oil giant BP winning federal government contracts in the wake of the Gulf of Mexico oil disaster in 2010.
BP said it had reached agreement with America’s Environmental Protection Agency (EPA), which will also see it withdraw a lawsuit challenging the suspension and open the way for it to enter into new leases in the Gulf.
Britain backed efforts to lift the ban and in December filed a statement to a US court considering the case that it “may have been excessive”. The company’s prospects are seen as important to UK jobs and pension funds.
BP has been suspended from performing any new government work in America since November 2012, after it agreed to plead guilty and pay a 4.5 billion US dollar fine (£2.8bn) for criminal charges over the Deepwater Horizon disaster.
The oil rig accident killed 11 workers and spilled millions of barrels of oil into the Gulf of Mexico.
BP has been banned for 16 months from leasing more offshore oil and gas properties and renewing fuel contracts with the US military.
But under the new agreement, 25 BP entities and its Houston-based oil production and exploration arm have been cleared to secure new government contracts.
The company said the lifting of the embargo cleared it to enter into new deepwater leases in the Gulf of Mexico.
The deal also means that, for five years, the company will have to abide by a series of ethics, safety and other requirements, while an independent auditor will also verify its compliance with the deal.
John Minge, chairman and president of BP America, said: “After a lengthy negotiation, BP is pleased to have reached this resolution, which we believe to be fair and reasonable.
“Today’s agreement will allow America’s largest energy investor to again compete for federal contracts and leases.”
Craig Hooks, assistant administrator for EPA’s office of administration and resources management, said: “This is a fair agreement that requires BP to improve its practices in order to meet the terms we’ve outlined together.”
BP continues to grapple with the costs of the spill, with annual results last month showing the total charge recognised to date stood at 42.7 billion US dollars (£26.2bn).
It is appealing against a court ruling over bogus claims on its compensation scheme and is asking for an injunction “to prevent awards to claimants whose losses are not traceable to the spill”.
Shares rose around 0.5 per cent on a day when the wider FTSE 100 Index headed downwards in the wake of overnight gloom on world markets.