Occidental Petroleum, subsidiaries pay $2.05 million in oil royalty False Claims Act case

by Ben Vernia | March 23rd, 2011

On March 22, the Department of Justice announced that Occidental Petroleum, Inc., and two of its subsidiaries have agreed to pay $2.05 million to settle claims that the companies underpaid oil and gas royalties. According to DOJ’s press release:

Occidental Petroleum Corporation, Occidental Oil and Gas Corporation, and OXY USA Inc. have agreed to pay the United States $2.05 million plus interest to resolve claims that the companies violated the False Claims Act by knowingly underpaying royalties owed on natural gas produced from federal leases, the Department of Justice announced today. Occidental Petroleum Corporation is an international oil and gas exploration and production company headquartered in Los Angeles.

Congress has authorized federal land to be leased for the production of natural gas in exchange for the payment of royalties on the value of the gas that is produced. Each month, companies are required to report to the Department of the Interior the amount of royalty that is due. This settlement resolves claims that the Occidental oil companies improperly deducted from the royalty values they reported the cost of boosting gas up to pipeline pressures, and failed to properly report and pay royalties related to a natural gas keep-whole agreement, pool pricing for gas and gas re-sold to affiliates.

The settlement is one of many in a qui tam suit brought by a now-deceased relator, Harold Wright, whose heirs will receive $91,000 of the recovery.

One Response to “Occidental Petroleum, subsidiaries pay $2.05 million in oil royalty False Claims Act case”

  1. Karen Felker says:

    I understand that private citizens can file with this lawsuit. I am a Royalty Owner and have interest in Bakersfeild , California with Occidental Oil and Gas Corporation. Who can help me with filing?

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