U.S. oil royalties scandal - Dec 10

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Democrats Plan Oil Royalties Inquiry
Edmund L. Andrews, NY Times
House Democratic leaders vowed Friday to pursue a broad overhaul of tax breaks and other subsidies to oil companies in January, saying that their first target would be an investigation of how the government collects billions of dollars in royalties on oil and gas produced on federal property.

“The Interior Department has a background of mismanagement, to put it mildly, in the collection of these royalties,” said Representative Nick J. Rahall II of West Virginia, a Democrat who will become chairman of the House Resources Committee next year.

Mr. Rahall said he planned a sweeping investigation of the Interior Department’s enforcement of royalty payments as well as the possible repeal of a 10-year-old law that allows energy companies drilling in deep coastal waters to avoid billions of dollars in payments.
(8 Dec 2006)

House Rejects Push to Renegotiate Contracts
Maya Jackson Randall, Dow Jones via Rigzone
In a 207-to-205 vote, the U.S. House on Friday rejected a plan aimed at pushing oil and natural gas companies to renegotiate flawed 1998 and 1999 drilling contracts.

Due to a clerical error at the Interior Department, the drilling agreements have made way for companies such as Royal Dutch Shell and Chevron Corp. that drill for energy in the Gulf of Mexico's deep waters to forgo paying royalties to the federal government.

U.S. lawmakers this year vowed to pass legislation that would address the error and close what Democrats have described as a leasing "loophole."

But, the House on Friday decided against addressing the drilling issue via a pending tax bill.

Key Republicans had argued that although they're supportive of legislation aimed at blocking royalty relief for oil companies, the tax bill wasn't the right vehicle.
(8 Dec 2006)

Congress urged to close oil royalty loophole
Tom Doggett, Reuters
House Democratic lawmakers on Thursday urged the Republican-controlled Congress to punish oil companies that won't renegotiate faulty drilling leases issued by the government almost a decade ago that have allowed companies to avoid paying billions in oil and gas royalties.

The lawmakers want to block oil companies from getting drilling leases in new offshore areas unless they reach new terms with the government on the energy exploration contracts signed in 1998 and 1999.
(7 Dec 2006)