British oil major BP said the U.S. Environmental Protection Agency (EPA) was preparing an agreement that would lift its temporary ban on awarding BP new federal contracts.

"The EPA has informed BP that it is preparing a proposed administrative agreement that, if agreed upon, would effectively resolve and lift this temporary suspension," BP said in a statement on Wednesday.

"The EPA notified BP that such a draft agreement would be available soon."

The U.S. government temporarily banned BP from new federal contracts earlier on Wednesday over its "lack of business integrity" in the Deepwater Horizon oil spill in 2010, a move that BP said could force it to rethink its entire U.S. operations.

BP stressed that it had made "significant enhancements" since the accident.

(Reporting by Rhys Jones; editing by Tim Castle)