• 3 minutes Australian power prices go insane
  • 7 minutes Wind droughts
  • 11 minutes  What Russia has reached over three months diplomatic and military pressure on West ?
  • 7 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 7 hours Changing Gazprom ADRs to Russian shares
  • 9 hours Is Europe heading for winter of discontent with extensive gas shortages?
  • 1 day "The Global Digital ID Prison" by James Corbett of CorbettReport.com
  • 4 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 5 days "How China Could Send LNG Prices Into The Stratosphere" by Irina Slav
  • 4 days "How to Calculate Your Individual ESG Score to ensure that your Digital ID 'benefits' and money are accessible"
  • 6 days The Federal Reserve and Money...Aspects which are not widely known
  • 6 days How Far Have We Really Gotten With Alternative Energy
James Burgess

James Burgess

James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also…

More Info

Bureaucratic Blunder helps over 100 Oil Companies Avoid Paying Royalties

Democratic lawmaker Representative Edward Markey of Massachusetts has used information from the Interior Department to form a report which claims that more than 100 oil and gas producers, including Chevron Corp. (NYSE: CVX), BP Plc (NYSE: BP), Exxon Mobil Corp. (NYSE: XOM), Royal Dutch Shell Plc, (NYSE: RDS-A) and ConocoPhillips (NYSE: COP), have benefitted from bungled leases awarded by the federal government.

The leases enabled the companies to drill for oil and gas in federal waters without paying, or at least paying at a much lower rate, any royalties.

Chevron was the biggest winner, avoiding an estimated $1.49 billion out of a total $2.62 billion that they should have paid for the right to drill.

Related article: Governments Must Work together to Avoid a Peak Oil Scenario

Under a law passed in 1995 any leases signed between 1996 and 2000 offered lower royalty fees in order to encourage drilling whilst oil and gas prices were so low; once the price rebounded above a certain level a clause in the lease stated that the royalties would return to the normal level.

Due to bureaucratic error, all leases signed in 1998 and 1999 failed to include a price threshold at which point the royalties would revert to normal levels once oil and gas prices rose.

In 2006, George Bush’s administration asked companies to voluntarily renegotiate the leases in order to correct the obvious mistake; nothing happened. Representative Markey is now trying to push for legislation that would force the oil companies to renegotiate the leases.

By. James Burgess of Oilprice.com



Join the discussion | Back to homepage



Leave a comment
  • Rusty on March 01 2013 said:
    RJ you do remember who was in charge Congress then right?
  • RJ Mueller on February 27 2013 said:
    Someone in the Clinton admin made out on that deal. No way that's a slip.

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News