Chevron, Shell Say They'll Renegotiate Leases
Oil executives testifying before a House panel investigating Interior Department oil and gas leases that give producers breaks on fees worth up to $10 billion disagreed on whether their industry needs "royalty relief."
Chevron Corp. and Shell Oil Co. executives expressed a willingness to renegotiate terms of those leases, while a Kerr-McGee representative maintained that the leases should remain as they are.
The Energy and Resources Subcommittee is investigating the absence of price thresholds in deepwater leases entered into during 1998 and 1999. The panel is also trying to determine whether Interior officials tried to cover up discrepancies in Gulf of Mexico oil and gas royalty waivers.
Speaking to reporters after the hearing, subcommittee Chairman Darrell Issa (R-Calif.), said he hoped there would be no need for legislation aimed at getting oil companies to renegotiate leases, given the willingness of Chevron and Shell to revisit the issue.
"The good news is that oil companies are being very cooperative in willingness to write checks for lost royalties over the past two years," Issa said.
While Exxon Mobil Corp. did not expressly state a willingness to renegotiate during the hearing, Issa said he thought the company is willing to come to the table and discuss renegotiation of the leases.
"At this point we do not have evidence of criminal behavior, but you can fire people over non-criminal behavior," Issa said, dismissing the need to get the Justice Department involved with investigating the matter.
Issa said the panel will hold at least two more hearings with Interior witnesses. The House member added that he believed legislation would be needed to reform processes Interior and the Minerals Management Service.
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