BP's Colorado Problem

July 1 2010, 10:27 AM

If BP doesn't have enough problems with the worst oil disaster in U.S. history and, as it hits the 140-million-gallon mark, the worst spill ever in the Gulf of Mexico, federal officials have slapped BP's U.S. unit, BP PLC, with a $5.2 million fine for its actions in Colorado. BP submitted "false, inaccurate, or misleading" reports for energy production on Ute tribal lands in southwestern Colorado, according to The Wall Street Journal, in a civil penalty that marks the first effort by the Interior Department's Bureau of Ocean Energy Management, Regulation, and Enforcement under Michael Bromwich, who took office last week. The bureau says tribal auditors discovered BP reported incorrect royalty rates and prices for royalty purposes, in addition to reporting well production on leases "other than those to which the production is attributable." BP America spokesman Daren Beaudo tells The Associated Press most of the errors derive from BP listing royalty payments for "natural gas" instead of "coal-bed methane gas," which has a different royalty schedule, leading to an underpayment of about $200,000 to the Southern Utes.