Two oil industry trade groups today called U.S. EPA's decision earlier this week to temporarily suspend BP PLC from new federal contracts "overly punitive" and warned it could harm drilling contractors and the rest of the offshore industry in the Gulf of Mexico.

The National Ocean Industries Association and the International Association of Drilling Contractors said the timing of EPA's decision Wednesday was unfortunate given that it was the same day as the first Gulf lease sale under the Obama administration's new five-year plan. They warned that BP is the largest operator in the Gulf, a region that promotes 200,000 jobs and has contributed tens of millions of dollars in federal revenues over the past decade.

The suspension could discourage BP from participating in the next offshore lease sale, scheduled for March 2013 in the central Gulf, which industry experts expect to bring in much more government revenue given the deeper waters and more promising oil plays it will contain.

The group touted "BP's diligent efforts to work with the federal government on cleanup and restoration efforts."

"We are hopeful that the offshore industry, the Gulf region, and the federal government can benefit from BP's participation in the upcoming central Gulf sale and future offshore lease sales," the groups said.

The EPA announcement came weeks after BP pleaded guilty to several criminal charges -- including 11 felony counts of manslaughter -- under an agreement reached with the Justice Department over its role in the 2010 Deepwater Horizon disaster (Greenwire, Nov. 15).

The decision also effectively barred the company from winning federal oil and gas leases in a western Gulf sale Wednesday, which fetched $134 million in high bids.

It is unclear how long BP's suspension will last. Unlike debarments -- which prohibit companies from contracting with the government for a set period of time -- suspensions are temporary actions that generally last a maximum of 18 months.

Lawmakers from oil-rich states did not immediately criticize the EPA decision but said they were puzzled over the agency's reasoning and wanted to know what BP needs to do to lift the suspension (E&E Daily, Nov. 29).