At a celebration of BP’s centennial last October, CEO Tony Hayward boasted to guests that the oil company "lives on the frontiers of the energy industry."

But this week, in the first major sign that the Gulf of Mexico oil spill may have caused lasting damage to the company’s long-term strategy of embracing projects with high risks, BP was frozen out of a potentially lucrative license to drill for oil off the coast of Greenland.

The Arctic setback comes as BP’s plans to begin deep-water drilling in Libya and the North Sea have been delayed, and its vast offshore U.S. operations remain under a cloud.

BP may face less difficulty in carrying out risky projects in parts of the world where regulation is less restrictive, such as in Angola, Russia and Iraq. But it can ill afford another major accident as years of investigations and costly lawsuits linked to the Gulf spill loom.

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