Interior Deals on Flawed Leases Fail to Quell Critics

Deals inked yesterday between the Interior Department and five petroleum companies on payment of royalties from flawed Gulf of Mexico leases won’t blunt Democratic plans to address the “royalty relief” issue more aggressively when the new Congress convenes.

“This in no way affects our plans to move forward,” a House Democratic leadership aide said today, noting that agreements have been reached with only a fraction of the companies holding the leases.

The department announced agreements with BP, ConocoPhillips, Marathon Oil Company, Shell, and Walter Oil and Gas Corp. The companies hold leases issued in 1998 and 1999 that allow “royalty relief” but do not contain clauses that suspend the incentive when petroleum prices surpass certain limits.

Stephen Allred, Interior’s assistant secretary for land and minerals management, issued a statement yesterday hailing the department’s “progress … on resolving this issue.”

Greenwire