WASHINGTON—The U.S. has decided to allow BP PLC to bid on new oil-drilling leases in the Gulf of Mexico that go up for sale later this year, less than two years after BP's Macondo well erupted and caused the worst offshore oil spill in U.S. history.

While testifying at a House hearing Thursday, U.S. offshore-safety chief Michael Bromwich said his agency "considered and thought about this issue quite a lot," but eventually determined to allow the British oil giant to bid for leases in a coming auction known as Lease Sale 218.

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