The ban preventing the British oil giant BP from winning US federal government oil contracts following the Gulf of Mexico oil spill has been lifted.
The embargo, in place since 2010, has been removed as BP has reached an agreement with the US Environmental Protection Agency (EPA) that includes the company withdrawing a lawsuit against the suspension and opens the way for it to enter into new leases in the Gulf.
The British government backed BP during the dispute, filing a statement to a US court saying the measure "may have been excessive". The UK’s interest in the US ban being lifted was largely motivated by the importance of BP to UK jobs and pension funds.
"After a lengthy negotiation, BP is pleased to have reached this resolution, which we believe to be fair and reasonable,” said John Minge, chairman and president of BP America.
"Today's agreement will allow America's largest energy investor to again compete for federal contracts and leases."
BP has been suspended from performing any new government work in America since November 2012, after it agreed to plead guilty and pay a $4.5bn fine (£2.8bn) for criminal charges over the Deepwater Horizon disaster. The ban has prevented the company from leasing more offshore oil and gas properties and renewing fuel contracts with the US military.
Following the new deal, BP’s 25 entities and its Houston-based oil production and exploration arm will now be able again to win new government contracts. However, the company will have to comply with more stringent ethical and safety requirements and will be regularly assessed by an independent auditor.
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."
The company said it was interested in new deepwater leases in the Gulf of Mexico.
BP continues to grapple with the costs of the spill, with annual results last month showing the total charge recognised to date stood at $42.7bn (£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.
The 2010 Deepwater Horizon oil rig accident killed 11 workers and spilled millions of barrels of oil into the Gulf of Mexico.