Oil and natural gas companies operating on Federal offshore and onshore minerals leases are regulated by the Minerals Management Service (MMS) and are expected to comply with Federal royalty regulations. Failure to do so can result in fines and/or penalties. MMS has an aggressive record for reviewing, auditing, and collecting these fines and penalties.

During the period between FY 2001 – FY 2006, MMS collected $52.4 million from enforcement actions against companies that did not closely adhere to Federal guidelines, both for offshore operations and royalty payments and reporting.

• Since the beginning of FY 2001, MMS has opened 291 enforcement cases against oil and natural gas companies.

• Federal leaseholders are responsible for following Federal royalty regulations. There are consequences for knowingly submitting false information.

• Additional consequences exist when penalties aren’t paid by their due dates, including:
   

  • Assessment and collection of interest on the original penalty;

  • Referring the case to the Department of Justice for further legal action;

  • Cancellation of the company’s Federal leases.

Relevant Topics:
 MMS Awards Recognize Safety, Environmental Achievement, and Accurate Reporting (25 KB; 1 page)
 2006: A Record Year for MMS Technological Approvals (25 KB; 2 pages)