BP says accounting error led to $5.2 million fine for work in Colorado

A BP America spokeswoman Wednesday called a $5.2 million fine levied by the federal government for inaccurate reporting of natural gas royalties in Colorado an “accounting and coding error.”

Announced Wednesday by Michael Bromwich of the Bureau of Ocean Energy Management, Regulation and Enforcement, the penalty was for false reporting of energy production on Southern Ute tribal land in Southwest Colorado.

“What’s been discovered, we’ve been working on this and it’s really an accounting, coding error, and it’s less than .02 percent of our royalties paid. Everything’s been corrected and rectified,” said Lisa Hough, head of public affairs for BP America’s Rocky Mountain Region.

“We’ve worked with the tribe and the federal government on that. It’s a line coding errors where we characterize gas produced as natural gas instead of coal-bed methane gas,” Hough told the Colorado Independent. “That’s an example of one of the errors they’re deciding to fine us for today.”

Bromwich is the new director of the agency that replaced the scandalized Minerals Management Service, which was charged with collecting royalties from energy production and federal lands.

“We are committed to collecting every dollar due from energy production that occurs on federal and American Indian lands, and accurate reporting is crucial to that effort,” Bromwich said in a release.

The Interior Department is under increasing pressure to clean up the agency that both collects revenues and regulates the oil and gas industry. Secretary Ken Salazar, prior to the Deepwater Horizon spill in the Gulf of Mexico, had promised to clean up the MMS, which critics charged was far too cozy with the industry.

BP America, which is looking to step up natural gas production in Colorado in the fall, is the second largest producer in the state – behind only Williams Companies.

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