US Supreme Court backs gov't on oil, gas royalties [View All]

http://www.alertnet.org/thenews/newsdesk/N11197804.htm

US Supreme Court backs gov't on oil, gas royalties


WASHINGTON, Dec 11 (Reuters) - The U.S. Supreme Court ruled on Monday that energy companies owing additional oil or natural gas royalties to the federal government are not protected by a limit on how many years back those payments can go.

The court said the Interior Department could seek the underpayment of royalties that were more than six years old, which potentially could bring in millions of more dollars to the government in royalties from production on federal leases.

The case occurred after the Interior Department's Minerals Management Service said Amoco Production Co., which is now a part of BP Plc <BP.L>, did not pay enough royalties on the natural gas it produced on federal lands in New Mexico's San Juan Basin.

In a 7-0 decision, the Supreme Court said while court actions are subject to a 6-year federal statute of limitations, the MMS payment order, which is essentially a bill for money due, is not.