The Environmental Protection Agency is lifting BP's suspension from receiving federal contracts.
The agency imposed the suspension after the oil giant pleaded guilty to the 2010 Gulf of Mexico oil spill, which caused more than 4 million barrels of oil to spew into the ocean.
Under the agreement, BP must have an independent EPA-approved auditor, and adhere to specific provisions addressing ethics, compliance and process safety.
“This is a fair agreement that requires BP to improve its practices in order to meet the terms we’ve outlined together,” Craig Hooks, EPA assistant administrator of Administration and Resources, said in a statement.
“Many months of discussions and assessments have led up to this point, and I’m confident we’ve secured strong provisions to protect the integrity of federal procurement programs.”
The EPA issued the suspension in 2012, banning BP from engaging in any business with the federal government. BP, a top supplier to the Defense Department, has been fighting the suspension in court but is dropping the lawsuit.
BP said in a statement on Thursday that it will once again pursuer new deepwater drilling leases in the Gulf of Mexico after the 16-month stay ended.
“Today’s agreement will allow America’s largest energy investor to compete again for federal contracts and leases," said John Minge, president of BP America, in a statement.