Oil Companies Escape Billions in Royalty Payments to Americans; Drilling Expansion Will Enrich U.S. and Foreign Corporate Freelo

Statement of Tyson Slocum, Director, Public Citizen’s Energy Program

A bureaucratic oversight has allowed 24 oil companies to avoid more than $1.3 billion in royalties for the privilege of extracting oil and natural gas from U.S. territory in the Gulf of Mexico - with foreign companies responsible for 55 percent of that total. But this $1.3 billion in forgone royalties pales in comparison to the $60 billion that Americans stand to lose in royalty revenue over the life of these leases. And if Congress repeals the moratorium on Outer Continental Shelf (OCS) drilling that has existed since 1982, these freeloading oil companies will be eligible to bid on new leases, providing them with more record profits while American families are left holding the bag. These 24 companies have posted a combined $365 billion in profits since 2006.

The list of the specific companies comes from a February 2008 U.S. Department of Interior memo recently obtained by Public Citizen. Four of the 24 companies (BP, Marathon, Shell and Walter Oil & Gas) signed voluntary agreements to pay royalties going forward, but they will not be required to pay the more than $200 million taxpayers have been denied on production that already has occurred.