Chevron Could Avoid Huge Royalties From Oil Find in the Gulf

[cal04]

A group of oil companies led by Chevron, which said last week that they had discovered a huge new oil field in the Gulf of Mexico, could avoid more than $1 billion in royalty payments to the federal government for the oil.

The potential bonus to Chevron and its partners stems from a mistake the Interior Department made in signing offshore leases in the late 1990’s for drilling in federal waters. The magnitude of the oil discovery — estimated in a range of 3 billion to 15 billion barrels — is likely to intensify a battle in Congress over incentives for drilling in publicly owned waters.

Under pressure from lawmakers, Chevron and other big producers have said that they would renegotiate their leases. But they have not said how much they are willing to give up, and the Interior Department has virtually no bargaining power under current law.

Chevron and its partners, Devon Energy and Statoil ASA of Norway, have six leases in the Jack oil field, about 175 miles off the coast of Louisiana. Two of the leases allow the companies to avoid royalties on as much as 87.5 million barrels of oil per lease.

http://www.nytimes.com/2006/09/12/business/12oil.html?hp&ex=1158033600&en=fe667a29859e9fa6&ei=5094&partner=homepage

[praeclarus]

1. that's ok...

... the middle class will handle all the tax
paying, thank you very much.

Besides, it would all find it's way back to Chevron
anyway so this saves a lot of accounting hassles.

[bluerum]

2. No! Corporate welfare for an oil company?! You mean the most

profitable businesses in the world for the last several years will avoid paying royalty taxes?

How can this be?

[bamacrat]

3. This is what happens when money makes policy.

When are the people in power going to realize that they are completley destroying our economy by eliminating the middle class and pumping up the rich. Trickle down doesnt work, remember the 80s. If the majority of the people have the majority of the money then our economy will thrive, when 150 people control 75% of the money in this country you get bullshit laws like this and a collapsing economy.

[AngryAmish]

4. Chevron Could Avoid Huge Royalties on New Field

"A group of oil companies led by Chevron, which said last week that they had discovered a huge new oil field in the Gulf of Mexico, could avoid more than $1 billion in royalty payments to the federal government for the oil.

Go to Special Section » The potential bonus to Chevron and its partners stems from a mistake the Interior Department made in signing offshore leases in the late 1990’s for drilling in federal waters. The magnitude of the oil discovery — estimated in a range of 3 billion to 15 billion barrels — is likely to intensify a battle in Congress over incentives for drilling in publicly owned waters."

[acmavm]

5. Surprise, surprise.

[1932]

6. mistake, my ass