Oil and natural gas produced from federal leases generated over $6.5 billion in royalties in 2009. To verify that royalties are paid on the correct volumes of oil and gas, the Department of the Interior (Interior) verifies the quantity and quality of oil and gas, both onshore and offshore. This report assesses: (1) the extent to which Interior's production verification regulations and policies provide reasonable assurance that oil and gas are accurately measured; (2) the extent to which Interior's offshore and onshore production accountability inspection programs consistently set and meet program goals and address key factors affecting measurement accuracy; and (3) Interior's management of its production verification programs. Charts and tables.
The Minerals Mgmt. Service (MMS) collected over $9 billion in oil and gas royalties in FY 2007. These royalties -- payments made to the fed. gov¿t. for the right to produce oil and gas from fed. lands and waters -- represent one of the country¿s largest non-tax sources of revenues. This report includes recommendations to strengthen the royalty collections program. This report determines: (1) whether there has been adequate assurance that fed. oil and gas are measured accurately; (2) whether MMS¿s royalty info. tech. system and royalty collection and verification processes provide sufficient assurance that all royalties are being collected; and (3) the extent to which MMS¿s compliance efforts provide an adequate check on industry¿s self-reported data.