ConocoPhillips has agreed to pay the government $97.5 million to resolve a lawsuit alleging that a company it acquired last year, Burlington Resources, paid less than it should have in royalties for natural gas produced on federal and American Indian lands.
ConocoPhillips settles royalties lawsuit. The nation's third-largest oil major also said Wednesday that it has agreed to pay $7.5 million in interest.
In exchange, the Justice Department agreed to dismiss a civil claim under the False Claims Act that Burlington "systematically" underreported values of natural gas produced from onshore federal and Indian leases for 17 years starting in 1988.
The Justice Department said producers must report the value of natural gas produced from their federal and Indian leases to pay a percentage of that value in royalties.
The lawsuit alleged Burlington understated the value and therefore paid less in royalties than it owed the government and three Indian tribes.
ConocoPhillips said the settlement resolves "longstanding administrative disputes over the interpretation of complex and ambiguous federal regulations" regarding royalties.
"The $105 million settlement consisted of additional royalty payments on natural gas production from 1998 until 2005 plus interest," the company said in a statement, noting that no fines or penalties were imposed.
The False Claims Act allows whistle-blowers to sue companies for fraud against the federal government. Justice Department spokesman Charles Miller told the Associated Press it has not been determined whether the whistle-blower will receive a portion of the settlements.
The Justice Department said it is still pursuing royalty claims against Exxon Mobil Corp.
Exxon Mobil spokeswoman Margaret Ross declined to comment on the Justice Department's statement. But in general, she said, the company pays royalties owed to private royalty owners, state governments and the federal government "correctly and honestly, according to regulations and lease and contract terms."
Since 1998 the federal government has resolved similar claims against other companies with settlements regarding underpaid royalties owed on natural gas produced from federal leases onshore and offshore.
In the suit that involved Burlington, the government had previously settled with Shell Oil for $56 million and Dominion Exploration and Production Co. for $2 million. The case was originally filed in 1996 in federal court in Lufkin.
Settlements collected in other actions involving the same issues in the late 1990s and early 2000s included $95 million from Chevron Corp., $32 million from BP Amoco and $7.3 million from Oxy USA.
ConocoPhillips settles royalties lawsuit. The nation's third-largest oil major also said Wednesday that it has agreed to pay $7.5 million in interest.
In exchange, the Justice Department agreed to dismiss a civil claim under the False Claims Act that Burlington "systematically" underreported values of natural gas produced from onshore federal and Indian leases for 17 years starting in 1988.
The Justice Department said producers must report the value of natural gas produced from their federal and Indian leases to pay a percentage of that value in royalties.
The lawsuit alleged Burlington understated the value and therefore paid less in royalties than it owed the government and three Indian tribes.
ConocoPhillips said the settlement resolves "longstanding administrative disputes over the interpretation of complex and ambiguous federal regulations" regarding royalties.
"The $105 million settlement consisted of additional royalty payments on natural gas production from 1998 until 2005 plus interest," the company said in a statement, noting that no fines or penalties were imposed.
The False Claims Act allows whistle-blowers to sue companies for fraud against the federal government. Justice Department spokesman Charles Miller told the Associated Press it has not been determined whether the whistle-blower will receive a portion of the settlements.
The Justice Department said it is still pursuing royalty claims against Exxon Mobil Corp.
Exxon Mobil spokeswoman Margaret Ross declined to comment on the Justice Department's statement. But in general, she said, the company pays royalties owed to private royalty owners, state governments and the federal government "correctly and honestly, according to regulations and lease and contract terms."
Since 1998 the federal government has resolved similar claims against other companies with settlements regarding underpaid royalties owed on natural gas produced from federal leases onshore and offshore.
In the suit that involved Burlington, the government had previously settled with Shell Oil for $56 million and Dominion Exploration and Production Co. for $2 million. The case was originally filed in 1996 in federal court in Lufkin.
Settlements collected in other actions involving the same issues in the late 1990s and early 2000s included $95 million from Chevron Corp., $32 million from BP Amoco and $7.3 million from Oxy USA.
Via: Chron
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