BP fined $5.2m for false gas reports

July 01, 2010|Associated Press

DENVER — The Interior Department has fined BP America $5.2 million for allegedly submitting false reports about energy production on an Indian reservation in Colorado.

Interior said yesterday that the US unit of BP PLC repeatedly misreported royalty rates for natural gas on Southern Ute Indian tribal lands. Interior spokesman Patrick Etchart said BP was not taking more natural gas than reported. Instead, BP at times reported erroneous royalty rates, or listed gas coming from the wrong wells, he said.

BP America spokesman Daren Beaudo said most of the errors came when BP listed royalty payments for “natural gas’’ instead of “coal-bed methane gas,’’ a more specific designation with a different royalty schedule. The errors led BP to underpay the Southern Utes about $200,000, which has been repaid, Beaudo said.

Tribal leaders didn’t return calls seeking comment.

Etchart said the $5.2 million fine is in addition to the underreported royalties and would be split between the US government and the Southern Utes. Southern Ute auditors said they discovered incorrect reports in 2007 and reported them to BP, which blamed the misreporting on a computer glitch and promised to make changes. However, BP’s reporting errors continued, leading to the fine.