• 5 minutes 'No - Deal Brexit' vs 'Operation Fear' Globalist Pushback ... Impact to World Economies and Oil
  • 8 minutes China has *Already* Lost the Trade War. Meantime, the U.S. Might Sanction China’s Largest Oil Company
  • 12 minutes Will Uncle Sam Step Up and Cut Production
  • 35 mins Iran Is Winning Big In The Middle East
  • 2 hours Trump cancels Denmark visit amid spat over sale of Greenland
  • 5 hours Nor Chicago, nor Detroit: Killings By Police Divide Rio De Janeiro Weary Of Crime
  • 3 hours Strong, the Strongest: Audi To Join Mercedes, BMW Development Alliance
  • 14 hours Not The Onion: Vivienne Westwood Says Greta Thunberg Should Run the World
  • 55 mins US to Drown the World in Oil
  • 1 day Danish Royal Palace ‘Surprised’ By Trump Canceling Trip
  • 1 day Trump vs. Xi Trade Battle, Running Commentary from Conservative Tree House
  • 6 hours With Global Warming Greenland is Prime Real Estate
  • 4 hours Gretta Thunbergs zero carbon voyage carbon foot print of carbon fibre manufacture
  • 16 hours OPEC will consider all options. What options do they have ?
  • 21 hours What to tell my students
  • 1 day NATGAS, LNG, Technology, benefits etc , cleaner global energy fuel
The US Light Crude Wave In Europe

The US Light Crude Wave In Europe

Europe has been one of…

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

Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play