OXY USA v. DOI, et al., No. 21-2011 (10th Cir. 2022)
Annotate this CaseOXY USA, Inc. appealed a decision of the U.S. Department of the Interior’s Office of Natural Resources Revenue (“ONRR”) ordering it to pay an additional $1,820,652.66 in royalty payments on federal gas leases that were committed to the Bravo Dome Unit (“the Unit”). The owner of the leases OXY subsequently acquired - Amerada Hess Corporation (“Hess”) - used almost all of the CO2 it produced in the Unit for its own purposes rather than sale. ONRR rejected Hess’s valuation method and established its own. Hess appealed, and ONRR’s Director issued a decision reducing the amount Hess owed but affirming the remainder of ONRR’s order. Hess appealed to the Interior Board of Land Appeals, but the Board did not issue a final merits decision prior to the 33-month limitations period. On appeal to the United States District Court for the District of New Mexico, the district court rejected OXY’s challenge to the amount of royalties owed and affirmed the Director’s decision. Finding ONRR's interpretation and application of the marketable-condition rule to this case was not plainly erroneous or inconsistent with the applicable regulations, the Tenth Circuit Court of Appeals affirmed.
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