BP America fined $5.2 million for false reporting on tribal lands

The US Bureau of Ocean Energy Regulation, Management, and Enforcement (BOE) has fined BP America Inc. $5.2 million for submitting false, inaccurate, or misleading reports of energy production on Southern Ute Indian tribal lands in southwestern Colorado.

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, June 30 -- The US Bureau of Ocean Energy Regulation, Management, and Enforcement (BOE) has fined BP America Inc. $5.2 million for submitting false, inaccurate, or misleading reports of energy production on Southern Ute Indian tribal lands in southwestern Colorado.

The civil penalty is not related to the Gulf of Mexico oil spill from BP PLC’s Macondo well, the US Department of the Interior agency noted.

The errors were initially discovered in 2007 by Southern Ute tribal auditors working under a cooperative agreement with BOE’s Minerals Royalty Management (MRM) program, BOE Director Michael R. Bromwich said on June 30. They brought the matter to BP America’s attention in August 2007 and were instrumental in documenting the ongoing errors, he indicated.

Tribal and MRM auditors discovered that BP America reported incorrect royalty rates and prices for royalty purposes, and reported production on leases other than those to which the production could be attributed, according to BOE.

It noted that the company, after receiving audit issue notices and an order, agreed with auditors’ concerns and repeatedly promised to correct the problems, which it attributed to errors in its automated files.

Tribal and MRM auditors examined later production reports to determine if BP had resolved the issue, as it had agreed, and found the same reporting errors, “leading us to conclude that BP’s continued submission of erroneous reports was knowing or willful,” Bromwich said.

The company can challenge the assessment through a DOI hearing procedure, he noted.

Contact Nick Snow at nicks@pennwell.com.

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