Federal judge rules in favor of Inupiat family against BP

Oil giant pumps billions worth from Lisburne oil field, in violation of its lease

Posted: Tuesday, January 20, 2009

ANCHORAGE - A federal judge has sided with an Inupiat family in a lawsuit against oil giant BP concerning a lease on the North Slope.

The heirs of Andrew Oenga, who for years have suspected the company was shortchanging them, hold a 40-acre allotment on the edge of the Prudhoe Bay oil field.

The judge determined that BP has been using the land to pump billions of dollars worth of oil from its Lisburne oil field, in violation of its lease.

The family has received about $1 million in rent over the years. They should have rightfully received closer to $80 million, according to the family's lawyer.

As a result of the ruling, the federal Bureau of Indian Affairs reversed a prior position and on Jan. 8 sent BP a stern letter:

"BP and its contractual partners are hereby directed to immediately cease utilizing the leased premises to produce oil or gas" from Lisburne, the letter says.

BP attorney Joe Perkins said Friday in a written reply to the federal agency, the wells won't be restarted without a court order or the consent of Oenga's heirs.

BP spokesman Steve Rinehart said only two wells tap Lisburne from the Oenga property, and they're not especially productive.

"We have followed the terms of this lease," he said.

The Oenga family and their attorney believe BP and its partner oil companies wrongfully took advantage of the lease, gradually expanding their operations on the allotment to tap lucrative pools of oil while sharing very little of the wealth.

The family sued the government, which should have enforced proper collections from BP, say the Oenga heirs and their attorney, Ray Givens of Bellevue, Wash.

"We just want to be treated fairly," said Joe Delia, an Anchorage resident and Oenga's grandson, and receive payments comparable to what BP might pay Conoco Phillips or Exxon if one of those companies owned the allotment.

In 1971, Andrew Oenga applied for and received an Alaska Native homestead allotment on Heald Point, a finger of land that extends into the Beaufort Sea just east of Prudhoe Bay. He chose that spot because it was a popular resting place for seals.

Oenga, who needed a Native interpreter to negotiate with government and BIA representatives, signed a lease on his Heald Point land on Jan. 19, 1989.

BP built a sizable drilling pad on the tip of Heald Point and sank horizontal wells to reach out for the oil.

What the family discovered was that the 30 wells on the Oenga allotment were tapping not just the Niakuk oil field, but other deposits including Lisburne, West Niakuk and Raven.

What's more, they argued that BP allowed Exxon and Conoco, then known as Arco, to trespass on Oenga land and share BP's facilities to produce oil.

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