ExxonMobil pays $32.2 million to settle False Claims Act allegations regarding royalties

by Ben Vernia | April 5th, 2010

The Department of Justice announced on April 5 that ExxonMobil subsidiaries paid $32.2 million to settle False Claims Act charges that they underpaid the U.S. and Indian tribes. According to DOJ:

Mobil Natural Gas Inc., Mobil Exploration & Producing U.S. Inc. and their affiliates have agreed to pay the United States $32.2 million to resolve claims that they violated the False Claims Act by knowingly underpaying royalties owed on natural gas produced from federal and American Indian leases, the Justice Department announced today. The Mobil companies are alleged to have systematically under reported the value of natural gas taken from the leases from March 1, 1988, to Nov. 30, 1999, and, consequently, paid less royalties than owed to the United States and various American Indian tribes.

The Justice Department partially intervened against the Mobil defendants in the Wright lawsuit, and previously settled with Burlington Resources Inc. for $105.3 million, Shell Oil Co. for $56 million, Chevron Corporation, Texaco and Unocal Incorporated for $45.5 million and Dominion Exploration and Production Co. for $2 million. The Mobil companies were merged into and became subsidiaries of ExxonMobil, the world’s largest publically traded international oil and gas company in November 1999.

The Department disclosed that the case was originally brought by whistleblower Harold Wright, who will receive $975,000 of the settlement. (Based on the $32.2 million settlement amount, this would represent an approximately 3% share. In fact, it probably reflects the fact that a large amount of that total went to pay Indian claims, in which a relator would not share.)

Leave a Reply

Recent Posts

Recent Comments