U.S. officials lifted a ban on government contracting imposed on  BP Plc in response to the 2010 oil spill in the Gulf of Mexico that fouled beaches from Florida to Louisiana.

An end to the suspension lets London-based  BP, once the Defense Department’s top fuel supplier, win lucrative federal contracts and seek leases for oil exploration on federal lands or waters. There is a U.S. auction next week for the right to drill in the Gulf, where the spill occurred.

“After a lengthy negotiation,  BP is pleased to have reached this resolution, which we believe to be fair and reasonable,” John Mingé , chairman and president of  BP America Inc ., said in an emailed statement.

Ending the suspension may help  BP expand its foothold in the Gulf of Mexico. The U.S. Bureau of Ocean Energy Management, part of the Interior Department, on  March 19  plans to auction leases covering more than 40 million acres in the Gulf for oil and gas exploration.

The company declined to comment March 13 on whether it will participate in the auction.

BP is the second-biggest oil producer in the Gulf with 63.6 million barrels in 2013, second only to Royal Dutch Shell Plc , according to Interior Department data.

The 45-page administrative agreement between  BP and the Environmental Protection Agency announced March 13 will last five years and requires the oil company to comply with a set of safety, ethics and corporate governance requirements. The company will also retain an independent auditor, who will conduct an annual compliance review and report to the EPA.

“This is a fair agreement that requires  BP to improve its practices in order to meet the terms we’ve outlined together,” Craig Hooks , an EPA assistant administrator, said in a statement.

The EPA imposed the suspension in 2012 after determining that  BP hadn’t fully corrected deficiencies that led to a fatal explosion at the Deepwater Horizon drilling rig, triggering a massive oil spill.

“This suspension hasn’t served its purpose and should continue,” Scott Nelson , a lawyer at Public Citizen, a health and safety advocacy group in Washington, said in an interview prior to the announcement. “But they’ve put on a hard press,” to end the ban.