BP Amoco, Williams Reach Partial Settlement with Utes
BP Amoco and the Williams Cos. announced last week they have reached
a partial settlement with the Southern Ute Indian Tribe, while leaving
the key issues of their dispute to be determined in an upcoming Supreme
Court case. The settlement released Williams and BP Amoco from all claims
included in the Southern Utes' lawsuit against them but did not address
key ownership issues.
Details of the agreements are still being negotiated and must be approved
by the U.S. District Court.
"Although other issues remain, this would be the first step toward
closure of this matter, if it is approved," said Kelly Swan, a Williams
Energy spokesman. "We have settled the Tribe's suit against us, and
now we are waiting on the Supreme Court to finish the rest."
The case went to the high court in January, after BP Amoco appealed
a 10th Circuit U.S. Court of Appeals ruling that gave the tribe ownership
of the coalbed methane gas that exists on 200,000 acres of tribe property
in the San Juan Basin (See NGI Jan. 25, 1999).
Along with Williams, BP Amoco represents a group of other oil companies
and 3,000 royalty owners. Williams said none of the royalty owners have
settled any of the tribe's claims.
The settlements require Williams' Williams Production Co. and BP Amoco's
Amoco Production Co. to convert the interest accrued from the profits associated
with the disputed leases into a working interest. A portion of this interest
will then be given to the Southern Ute tribe effective Jan. 1, 1999.
"In layman's terms, we are going to give a percentage of what we
make from the fields to the Ute Tribe," Swan said. "This settlement
should stand the test of time if it's approved. The Court's decision will
have little impact, except for a few tax issues, on this proposed agreement."
Ownership of the gas produced from the 200,000 acres is a question the
Supreme Court will answer by mid-1999, Williams said.
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