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.

Loading article content