BP America Inc. paid a $5.2 million civil penalty for submitting false, inaccurate, or misleading reports for energy production that occurred on Southern Ute Indian Tribal lands in southwestern Colorado.
The case was brought by the Department of the Interior’s Office of Natural Resources Revenue (ONRR).
“This civil penalty demonstrates the expertise, skill and tenacity of the Tribal auditors and ONRR enforcement team members who discovered and pursued this repeated misreporting of royalty and production information, and underscores the value of our partnership with Tribal and State auditors under our cooperative agreements,” said Paul A. Mussenden, Deputy Assistant Secretary for Natural Resources Revenue Management.
“ONRR remains committed to collecting every dollar due from energy production that occurs on Federal and American Indian lands, and rigorous enforcement of our regulations requiring accurate reporting is crucial to that effort.”
ONRR’s Office of Enforcement originally issued the civil penalty in June 2010.
Although BP America initially requested a hearing on the civil penalty, it decided to pay the penalty instead.
ONRR received payment on July 17.
Mussenden praised the work of Southern Ute Tribal auditors who initially discovered the errors.
The Tribe’s audit was conducted as part of a cooperative agreement with ONRR.
The Southern Ute Tribal auditors and ONRR found that BP reported incorrect “product codes” and “sales type codes” resulting in their use of incorrect royalty rates and prices for royalty reporting purposes.
BP also reported well production to the wrong leases.
After receiving audit issue letters and an order, the company agreed with the auditors’ concerns and repeatedly promised to correct the problems, which they attributed to errors in their automated files.
But ONRR and the Tribal auditors found the same errors in later reviews, prompting ONRR to issue the civil penalty.