BP confirmed that it would no longer pursue a drilling licence in Greenland, in a move indicating that the oil disaster in the Gulf of Mexico has hit the company's previous hopes to claim a stake in the race to explore Arctic resources, DPA reported.
"We are not participating in the bid round," a company spokesman confirmed in London, according to a report published on the Guardian newspaper's website late on Wednesday.
The company did not give any reasons for its decision not to pursue a licence for the hotly-contested drilling rights.
The bureau of minerals and petroleum in Greenland's capital Nuuk said it would reveal the successful bidders for licences over the next few weeks, the report said.
Rival exploration company Cairn Energy had announced a major gas find in the region only this week.
The current race among exploration companies for drilling rights in the environmentally sensitive Arctic region has attracted public controversy and protests by environmentalists including Greenpeace.
According to the report, the bureau of minerals and petroleum did not comment on whether it had excluded BP from the bidding process due to the Gulf oil disaster after BP's Deepwater Horizon platform blew up in April.
However, the Guardian quoted senior sources in the bureau as saying: "With the Greenpeace ship already harassing Cairn off Greenland - a company which has an exemplary safety record - everyone realised it would be political madness to give the green light to BP."
The events suggest BP, traditionally amongst the first in exploring new areas of exploration, may have taken a serious hit in its efforts for pursue new exploration especially in environmentally- sensitive areas.
The US government decided to allow drilling in the Arctic shortly before the Gulf oil disaster, but halted the plans afterwards.
BP still holds drilling interests in the Arctic in Alaska, but there has been speculation that it may be trying to sell them to pay for the 30-billion-dollar costs resulting from the oil disaster, the report said.