"U.S. Asks Supreme Court To Hear Oil Royalty Case"

"The U.S. Justice Department has asked the Supreme Court to overturn a legal decision between the Interior Department and Anadarko Petroleum Corp (APC.N) that, if allowed to stand, could cost the government billions of dollars in lost oil royalties from energy companies.

Justice, on behalf of the Interior Department, is fighting a lower court's ruling that said Anadarko did not have to pay about $350 million in royalties for drilling on federal leases in the Gulf of Mexico issued between 1996 and 2000.

If the ruling stands in Anadarko's favor, other energy companies could avoid paying drilling fees that 'will likely cost the United States at least $19 billion in forgone or refunded royalties,' the Justice Department said in its filing on Monday to the Supreme Court.

The department said the lower court's interpretation of the royalty relief law was 'flatly wrong' and that the amount of money at stake makes the case worthy of review by the Supreme Court.

The Supreme Court's justices are not expected to decide whether to hear the case until they return in early October from their summer recess."

Tom Doggett reports for Reuters July 14, 2009.