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By Ernest Scheyder
Dec 3 (Reuters) - Oil and natural gas producer W&T OffshoreInc's ban from bidding on federal government contractsin the Gulf of Mexico could last up to three years, the U.S.Environmental Protection Agency said on Tuesday.
The EPA issued a temporary ban against the small Gulf ofMexico producer last month after it pled guilty earlier thisyear to spilling some oil from a drilling platform in 2009. Theban was effective immediately, the agency said.
"The letter from the EPA is pretty vague to me," W&T ChiefExecutive and founder Tracy Krohn said on Monday. "We're alittle unclear on what this exactly means."
He added he did not know whether his staff had been incontact with the EPA. W&T has not appealed the ban.
The EPA told Reuters that the company must appeal and wouldbe granted a hearing. At the end of hearing, W&T could face athree-year debarment that would affect all of its operations inthe Gulf.
Shares of W&T fell 1.2 percent to $16.70 in Tuesday trading.
W&T said last week that it received a letter on Nov. 19 fromthe EPA temporarily suspending the company from bidding onfederal oil and natural gas contracts, and that, after aninquiry, W&T could possibly lose the right to bid for up tothree years. The measures would affect future business but notexisting deals.
The letter was connected to a 2009 incident in which a smallamount of oil was dumped from a Gulf drilling platform and acontractor altered water discharge samples. W&T pled guiltyearlier this year and paid a $1 million fine.
Krohn, who owns 53 percent of the company and is its largestshareholder, said he was unaware whether the sanctions, ifimposed, would begin immediately or be retroactively appliedstarting in 2009.
While the sanctions would cause little harm to W&T's currentoperations in the U.S. Gulf of Mexico, they would place thecompany in the unwelcome category of BP Plc and othersprohibited from doing business with the U.S. government.
Since its 1983 founding, W&T has mainly grown by acquiringminority or majority stakes in leases from Total andother large rivals.
The uncertainty around the inquiry has weighed on W&T'sshares, which have slipped nearly 15 percent since the companysaid on the eve of the U.S. Thanksgiving holiday it had receiveda letter from the EPA.
Krohn said he is not concerned by the inquiry and that thecompany continues to operate normally in the Gulf.
"The idea that we would be debarred from doing business inthe Gulf of Mexico because of an unreported spill or some sortof violation four years ago which has been corrected," he said,"is kind of remote for me." (Reporting by Ernest Scheyder; Editing by Terry Wade and LeslieGevirtz)
