BP closes part of Alaska oil field over rent dispute

The Anchorage Daily NewsJanuary 5, 2011 

BP shut down a small portion of the Prudhoe Bay oil field last week after a judge ruled that federal regulators failed for years to get approval from the Inupiat Eskimo family that owns the land.

The shutdown affects less than 1 percent of production from the nation's largest oil field, but so far it's the most visible consequence of a significant legal victory for the Native family, which has battled lawyers for the federal Bureau of Indian Affairs and BP in federal court over the oil production from its land.

Federal claims court judge Nancy Firestone ruled this fall that the Oenga family is owed millions in unpaid rent because the BIA improperly allowed BP to tap three offshore oil deposits from the family's allotment on the northern edge of the vast Prudhoe oil field.

The BIA approved BP's expanded use of the allotment without the family's consent, in violation of the family's contract with BP, Firestone said in her 168-page ruling on Nov. 22.

A week ago, the BIA told BP to shut down production from Prudhoe's Raven unit, the only one of the three disputed offshore deposits that BP was still accessing from the allotment. BP shut down Raven, which produced about 25,000 barrels of oil in November, on Friday. BP is still legally tapping the Niakuk field from the allotment.

The battle over unpaid rent and unauthorized land use involves a nondescript finger of land called Heald Point that extends into the Beaufort Sea.

To read the complete article, visit www.adn.com.

McClatchy Washington Bureau is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service