The Interior Departments’s Minerals Management Service (MMS) has ordered several oil and natural gas producers to pay about $2 million in additional royalties to American Indian tribes and individual Indian mineral owners for production on their lands in 2001.

The MMS said it uncovered the royalty shortfall as part of a routine government audit, known as a compliance review. The agency noted that it discovered a royalty underpayment of $1.6 million for oil and gas produced on Indian lands during last year’s audit.

MMS spokesman Patrick Etchart in Denver declined to identify the producers, noting the companies first are given 30 days to either reply to the agency order to pay or to appeal it. If a producer fails to respond within that period, the agency can then pursue civil action, he said. A company’s royalty underpayment may simply be due to an “accounting mistake, not malicious intent.”

Etchart noted the agency sent out 176 orders to pay the royalty underpayments last month.

The MMS collects and verifies mineral revenues from 3,800 Indian leases and turns the revenues over to the Bureau of Indian Affairs for distribution to American Indian lessors.

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