Report says oil royalties go unpaid

An eight-month investigation by the Interior Department's chief watchdog has found pervasive problems in the government's program for ensuring companies pay the royalties they owe on billions of dollars oil and gas pumped on federal land and in coastal waters, The New York Times reported Thursday.

In a scathing report to Congress, the Interior Department's inspector general says the agency's data are often inaccurate, that its officials rely too heavily on statements by oil companies rather than actual records and that only about 9 percent of all oil and gas leases are being reviewed.

The report undermines claims by top Interior officials that the department is aggressively pursuing underpayments and outright cheating by companies that drill on property owned by the American public, according to the newspaper.

And though investigators did not attempt to estimate the amount of money that the government might be losing, they cited a host of weaknesses that make the government vulnerable to being short- changed.

Interior officials defended the program on Wednesday, but announced that they would develop "an action plan" to address the inspector general's recommendations.

The report came as lawmakers in both parties have been attacking the Interior Department for failing to correct blunders that department officials now concede could cost the government as much as 10 billion dollars over the next five years.

It also reinforces complaints by critics, from auditors within the agency to lawmakers in both parties, who have said that enforcement has become superficial, prone to errors and overly deferential to oil companies, the newspaper said.

Source: Xinhua