Monday PM December 11th, 2006
by: Ed Mayberry, December 11, 2006 5:12:00 am
The U.S. Supreme Court ruled today against the oil and gas industry in a dispute over how far back the government can go in collecting money for leases on federal land. In a seven-to-nothing decision, justices refused to limit the time the government can reach back for unpaid royalties. The ruling applies to administrative proceedings the Interior Department brought against BP America Production and Arco. It stems from a dispute over back royalties on natural gas the companies pumped from wells in the San Juan Basin. That's in northwest New Mexico and southwest Colorado. At issue is whether a federal law imposing a six-year time limit for the government to file lawsuits based on federal contracts also applies to administrative orders. The opinion by Justice Samuel Alito says the industry's arguments "are insufficient to overcome the plain meaning'' of federal law. BP and Arco say unfavorable rulings in lower courts on the issue would add hundreds of millions of dollars to the royalty obligations of the oil and gas industry over the life of existing leases.
Congress passed a bill to overhaul management of the nation's marine fisheries and strengthen protections against overfishing. The measure passed as 109th Congress wrapped up business early Saturday. It requires the use of annual catch limits and enhances the authority of eight regional fishery management councils. The bill reauthorizes the Magnuson-Stevens Fishery Conservation and Management Act through 2013. It's the main law guiding fishery management in waters between three miles and 200 miles offshore. In a statement, President Bush praised the bill, saying it will strengthen efforts end to overfishing and rebuild the nation's fish stocks through "market-based management and tougher enforcement'' backed by sound science.
Congress has approved a plan to expand offshore drilling in the Gulf of Mexico. The action came early Saturday morning, in the final hours of the Republican controlled 109th Congress. The bill calls for the Interior Department to begin offering oil and natural gas leases in an eight million acre area within a year. Actual production likely would be at least four or five years beyond that. The area is believed to have more than a billion barrels of oil and six trillion cubic feet of gas. The bill also will produce a revenue windfall for Louisiana and three other Gulf Coast oil producing states. For the first time, the states will get 37.5 percent of future royalties from Gulf oil and gas production in federal waters off their coastlines.
Russia's top oil producer Lukoil said today it would acquire a chain of European filling stations from its U.S. partner, Houston-based ConocoPhillips. Lukoil is to buy the Jet network of 376 filling stations in Belgium, the Czech Republic, Slovakia, Poland, Hungary and Finland. The Russian company isn't disclosing the price it's paying to buy the stations from ConocoPhillips. The deal will increase Lukoil's international retail sales by 19 percent. Lukoil officials also are considering buying a major European oil refinery, as well as a possible stake in Czech refiner Unipetrol. ConocoPhillips owns about 20 percent of Lukoil. Since 2000, Lukoil has acquired over 2,000 filling stations in the U.S. northeast and targeted the European refining and retail market.
The uproar that sank plans for a Dubai-owned company to buy some major U.S. ports is apparently prompting other firms to make sure their deals with foreigners pass muster. The Bush administration this year reviewed nearly 100 proposed foreign business deals, a 50 percent increase from last year. And according to lawyers and federal officials, some of the companies involved sought government approval even if their deals didn't raise obvious national security questions. Foreign firms announced plans this year to buy more than 900 American businesses.
A convicted former Enron chief who once lived in a $4.7 million mansion in Houston--is getting new digs tomorrow. And roommates. Jeff Skilling tomorrow reports to the Federal Correctional Institute in Waseca, Minnesota. Skilling must serve 24 years in prison for his May conviction in Houston on fraud and conspiracy charges. Enron founder Ken Lay was convicted on similar counts—but he died in July in Colorado, before his appeal could begin. Prison officials say Skilling will share a converted college dorm room with three other inmates. The low-security prison is about 75 miles south of Minneapolis.