CALIFORNIA : Occidental Unit Will Pay $7.3 Million in Royalty Case
Occidental Petroleum Corp.’s Oxy USA Inc. subsidiary on Tuesday agreed to pay $7.3 million to resolve Justice Department claims involving royalties for oil extracted from government and Native American lands.
The government has been responding aggressively to allegations of abuses by oil companies that lease the right to drill on federal property.
A group of whistle-blowers filed the lawsuit in 1996 in a federal court in Lufkin, Texas; the Justice Department intervened in the case in March.
The law lets whistle-blowers sue on behalf of the government and then keep between 15% and 25% of the recovery.
The pact also settles similar claims by the Jicarilla Apache tribe. It is also involved in related cases against Texaco Inc., Unocal Corp., BP Amoco, Conoco Inc., Burlington Resources Inc. and Shell Oil Co. Last year, the government settled similar claims against Mobil Corp. for $45 million.
In the Oxy suit, the company was accused of understating the amount and value of the oil it extracted from January 1988 to December 1997.
Royalties are based on the value of the crude reported by oil companies on monthly statements they must make to the Interior Department’s Minerals Management Service.
An Occidental spokesman refused to comment on the settlement.
Shares of Los Angeles-based Occidental rose 75 cents to close at $21.69 on the New York Stock Exchange.
Separately Tuesday, the international division of Occidental’s oil and gas subsidiary said it will relocate its exploration, engineering and technical services group from Bakersfield to Houston. About 70 of the 124 employees at the Bakersfield office will be retained.
