US: Inuit sue US government over BP land usage

Fresh from settling a lawsuit over last year's fatal explosion at its Texas City oil refinery, BP looks set to become embroiled in a legal battle in Alaska over royalties paid on oil production in Prudhoe Bay.

The family of Andrew Oenga, an Inupiat who lived on the North Slope in Alaska until his death a decade ago, is suing the US government, claiming his eight descendants are owed $40m (£21m) in back rent. In the 1970s, Mr Oenga was allotted property in Alaska under a federal government programme for native Indians. The allotment, administered by the Bureau for Indian Affairs, does not include rights to the oil under the surface, but does provide for payments if the oil companies make use of the area underground.

BP applied to run a road and pipeline on the surface, and has since paid the Oengas - via the US government - over $650,000. However, the lawsuit filed earlier this year claims BP also operated oil production facilities on the 10-acre site that were not covered by the lease, and as such, the Oengas are entitled to about $40m in back payments.

The family is suing the US government for breach of its fiduciary duty, claiming it incorrectly drew up the lease so that BP has paid the family less than 0.1pc of the $1.6bn of oil produced at the site, rather than the 4pc they claim they are entitled to.

The government denies the claim, saying BP was entitled to use the land for production. However, lawyers say that if the government loses the case, it could sue BP for any damages awarded. "We're just seeking justice for the wrong they've done," Joseph Inuquruq Delia, Mr Oenga's grandson said. "My grandfather couldn't speak or read English. The government betrayed him. BP has profited from it and we just want the same justice that others have got."

BP has intervened in the lawsuit, but notes that the company itself is not a target.

"We have always paid the lease amount that the Bureau of Indian Affairs determined," a spokesman said. "We have intervened to keep our options open."

AMP Section Name:Energy
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