US govt wants court to rehear oil royalty dispute

WASHINGTON (Reuters) – The U.S. Justice Department on Monday asked a federal appeals court to rehear a legal decision over oil royalties between the Interior Department and Anadarko Petroleum Corp (APC.N) which, if allowed to stand, could cost the government billions of dollars in lost royalties from oil companies.

Justice, on behalf of the Interior Department, is fighting a January ruling from a panel of the Circuit Court of Appeals for the Fifth Circuit in New Orleans that said Anadarko did not have to pay $350 million in royalties for drilling on federal leases in the Gulf of Mexico issued between 1996 and 2000.

If the ruling stands in Anadarko’s favor, other energy companies could forgo paying royalties and the government “stands to lose tens of billions of dollars in revenue that would otherwise be derived from the nation’s oil and gas reserves,” the Justice Department said in its request for the full circuit court to rehear the case.

Justice said the panel’s decision was inconsistent “with the plain language of the statute” and that “the sheer amount of money at stake” makes the case worthy of review by the full court to “correct the panel’s error.”

Reuters