BLM spokesman Matt Spangler said the company paid the appropriate royalties but is also paying the fine for its employee's actions. Most of the oil field was on Uintah and Ouray tribal lands, he said. Tribes keep all royalties generated on reservations, while federal and state treasuries split the proceeds elsewhere.
BLM Director Bob Abbey applauded the settlement. "We will vigorously enforce the regulations that assure that oil and gas production is properly accounted for," he warned "so that tribes and taxpayers receive their fair return in royalties."
The company told the BLM that its employee disabled the valves to avoid overflow spills from storage tanks, according to the agency, though company managers were unaware of the disabling.
Berry Vice President and General Counsel Davis O'Connor said the employee, who was suspended after the violation last May and later left the company, thought he was acting in everyone's best interests by opening the valves to prevent spills resulting from fast flow during early production at the wells. Each tank holds 400 barrels, he said, but some wells were producing up to 1,000 barrels a day.
The employee was not trying to defraud royalty owners, O'Connor said, and production numbers still could be measured at a separate valve outlet tracking sales. He acknowledged, though, the violation of federal rules.
"The agency," he said, "is endeavoring to send a message to the regulated community that there's a new sheriff in town."