Govt to BP: Don’t forget to pay taxes on oil

By Ayesha Rascoe

WASHINGTON (BestGrowthStock) – The U.S. government on Thursday reminded BP not to forget Uncle Sam when the company doles out cash to pay for its oil spill.

The Interior Department told the oil giant it is still on the hook for royalties on the oil it is collecting from its ruptured well, which is spewing out as much as 60,000 barrels of oil every day.

In a worst-case scenario, that could cost the company as much as $73.4 million to date, based on royalty rates, the government’s maximum daily flow estimate and the current price of oil at around $75 a barrel.

BP’s costs from the spill have already topped $3.5 billion and continue to grow. That doesn’t include a $20 billion fund the company set up to pay claims in the Gulf region.

Oil has been gushing from BP’s undersea well for 87 days since an April 20 explosion sank the Deepwater Horizon rig, devastating fragile communities and ecosystems. After weeks of flowing virtually unchecked, BP has been able to install containment systems to capture some of the oil.

BP is trying to set up a new multi-vessel oil-capture system to contain up to 80,000 barrels of oil a day.

Currently, energy companies pay the government a royalty rate of up to 18.75 percent of the value of the oil and gas they drill in the offshore tracts.

Right now BP is only responsible for royalties on the oil and gas it captures, but it will have to pay up for all the spilled fuel if authorities determine negligence or rule violations caused the accident, the Interior Department said.

So far, more than 800,000 barrels of oil have been collected or flared by BP’s containment systems.

The latest government estimates put the flow from the leaking well at 35,000 to 60,000 barrels a day.

(Editing by Eric Walsh)

Govt to BP: Don’t forget to pay taxes on oil