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Gulf oil spill: U.S. government to collect royalties on recovered oil

June 15, 2010 |  3:31 pm

Oil trapped by BP from the Deepwater Horizon spill in the Gulf of Mexico will generate revenue for the U.S. government, according to the Minerals Management Service spokesman Nicholas Pardi.

The service will collect royalties on any petroleum BP recovers with skimmers, insertion tools or the cap now funneling oil from the leaking well, he said. BP has been collecting and processing this oil and has said it will donate the proceeds to a fund to restore wildlife.

According to BP, the company has collected about 149,000 barrels of oil since the cap was lowered over the well. U.S. government and independent scientists have estimated that the well may be spewing more than two to four times the captured amount into the sea.

It remains unclear whether BP will also pay royalties on the oil spilled into the Gulf of Mexico since the April 20 Deepwater Horizon oil-rig accident. A government panel Tuesday upped its estimate of the flow to 35,000 to 60,000 barrels per day.

By law, BP only owes royalties on spilled oil if the company is found to have been negligent or operating in violation of laws or regulations, Pardi said. MMS and several congressional panels are investigating the cause of the accident.

-- Jill Leovy