Washington (Platts)--31Jan2008

A group of American Indians that alleges the US government cheated it out
of billions of dollars in oil and natural gas royalties has won a key victory
in a long-running lawsuit against the US Interior Department.

Judge James Robertson of the US District Court for the District of
Columbia said in a 165-page ruling Wednesday that Interior has failed to come
up with a workable plan to account for the money that that the Indians claim
they are owed.

"A remedy must be found for [Interior's] unrepaired, and irreparable,
breach of its fiduciary duty over the last century," Robertson wrote.
Interior had argued that it had a workable plan for accounting for the
royalties, but that it would be expensive and take years to finish. But
Robertson rejected that claim, saying "the time has come to bring this suit
[by the Indians] to a close."

Robertson said he would schedule a hearing within 30 days to determine
how Interior should account for the money owed the Indians.

Elouise Cobell, the lead Indian plaintiff in the class-action lawsuit
against Interior, hailed the judge's ruling, saying "[t]his is a great day in
Indian Country."

The ruling could have implications for US oil and gas companies. The
Indians want the court to order the companies to turn over oil and gas
production records to help calculate the proper amount of royalties owed to
them. Interior has resisted that approach.

"There are records that show how much oil and gas came out of every well
in America," said Bill McAllister, a spokesman for the Indian plaintiffs.
McAllister said the court could order Interior to estimate the royalties owned
the Indians by correlating that data with "historical prices" for oil and gas.
Robertson's ruling also increases the chances that the Indians and Interior
will reach a settlement out of court, McAllister said.

The Indians claim that Interior has mismanaged more than $100 billion in
Indian revenues since 1887.

--Brian Hansen, brian_hansen@platts.com