Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

BP may owe for spilled oil

By Steve Hargreaves, Senior writer


NEW YORK (CNNMoney.com) -- BP will have to pay the U.S. government royalties on oil that spilled into the Gulf of Mexico if it is found that "negligence or regulatory violations" contributed to the accident, according to a government statement Thursday.

U.S. regulators are investigating what caused the April accident, but the findings aren't expected for several months.

All oil companies pay royalties on oil produced from wells on government land or water.

BP is currently paying royalties on the oil that it is collecting and selling from its damaged well. BP is donating proceeds from those sales to a wildlife fund.

Based on the oil BP has collected as of last week, current oil prices, and the 18.75% royalty rate on the well, BP has paid about $8 million to the government.

But the well is estimated to be leaking up to 60,000 barrels a day. If the company was charged for that full amount, it would owe another $65 million.

BP has set up a payment plan with the government where it has promised at least $20 billion to pay for damages caused by the spill.

BP officials did not immediately respond to a request for comment. To top of page

Index Last Change % Change
Dow 21,812.09 -87.80 -0.40%
Nasdaq 6,278.41 -19.07 -0.30%
S&P 500 2,444.04 -8.47 -0.35%
Treasuries 2.17 -0.04 -1.99%
Data as of 3:07am ET
Company Price Change % Change
Advanced Micro Devic... 12.48 0.31 2.55%
Bank of America Corp... 23.76 -0.07 -0.29%
Ford Motor Co 10.71 0.06 0.56%
General Electric Co 24.39 -0.21 -0.85%
Chesapeake Energy Co... 3.89 0.04 1.04%
Data as of Aug 23
Sponsors

Sections

The GOP's years-long quest to repeal what Republicans derisively refer to as the "death tax" may be realized if tax reform happens. But the arguments to repeal the estate tax overlook a few key details. More