ONRR fines Chevron for improper offshore lease deductions

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, July 20 -- The US Office of Natural Resources Revenue collected a $1.1 million civil penalty from Chevron USA for improper claiming transportation deductions on certain leases it holds in the Gulf of Mexico, the Department of the Interior agency announced.

ONRR cited Chevron for claiming the deductions on certain “Section 6” tracts in the gulf when the leases specifically bar deductions for oil transportation, ONRR Director Gregory J. Gould said on July 20. Section 6 leases originally were issued by the State of Louisiana in the 1940s and retained the terms barring deductions for oil transportation when they were converted to federal leases subsequently, he explained.

ONRR said it denied the deductions Chevron claimed in April 2010. The company did not dispute the order and corrected and repaid the deductions the following month, the agency said. It said that the company claimed such deductions in later months, prompting ONRR to assess the civil penalty. Chevron paid a fine totaling $1,144,500 on July 14 and corrected the inaccurate reports it had submitted, ONRR said.

Contact Nick Snow at nicks@pennwell.com.

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