The Interior Department's chief oil and gas regulator said Thursday that BP plc must pay royalties on all oil and natural gas captured from the damaged Macondo well in the Gulf of Mexico. The company also is potentially liable for royalties on lost or wasted oil and gas from the well if it is determined that negligence or regulatory violations caused or contributed to the Deepwater Horizon explosion and resulting oil spill.

Michael Bromwich, director of Interior's Bureau of Ocean Energy Management, Regulation and Enforcement (BOEM), notified BP America's tax department in a letter that said failure to fulfill these obligations could be considered knowing and willful violations of the Federal Oil and Gas Management Act. BP is required to pay royalties immediately for oil and gas captured from the Macondo well, he said.

BOEM did not tally the royalties that BP would owe the federal government from the Macondo well, which has been spewing oil since April 20.

BP also "is required to report immediately to BOEM all oil- and gas-related activities associated with the Macondo well using Form MMS-4054," Bromwich wrote.

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