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New Standard: Oil giant tries to cheat tribes of money

Note: The case is BP America Production Co. v. Burton, No. 05-669. The briefs can be found here. The October 4 oral argument transcript has been posted by the Supreme Court.

"A case pending before the US Supreme Court may determine whether the oil industry can cast off millions in debts incurred while exploiting natural resources on Indian lands in the Southwest�s

Tribes, along with federal and state authorities, are seeking to hold oil giant BP America liable for unpaid royalties from energy development. While BP seeks protection from its payment obligations under a statute of limitations on royalty claims, the Jicarilla Apache Nation, which relies heavily on revenues from oil and gas extraction on its lands, has rallied against what it views as an end-run around the industry�s payment obligations.

From 1989 to 1996, BP America Production, then known as Amoco, sucked coal-bed methane gas from the San Juan Basin, which spans New Mexico and Colorado. Under land leases negotiated with the US government, the company was obligated to pay royalties to the Interior Department, at a standard rate of 12.5 percent, to be distributed to governments and tribes.

But a New Mexico state audit showed that BP�s calculation method significantly under-estimated the market value of the gas. The audit determined that BP's payments had fallen $4 million short, and subsidiary Atlantic Richfield owed more than $780,000."

Get the Story:
Oil Giant Tries to Shirk Royalty Payments to Indians (The New Standard 10/11)

Relevant Documents:
Devaney Testimony | Hearing Information

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