FOR IMMEDIATE RELEASE	CIV

THURSDAY, FEBRUARY 19, 1998                                                                                          (202) 616-2765

                                                                                                                                                         TDD (202) 514-1888







U.S. SUES FOUR MAJOR OIL COMPANIES FOR UNDERPAYMENT OF ROYALTIES





	WASHINGTON, D.C. --	The Justice Department has intervened in
an action accusing four major oil companies of knowingly
undervaluing oil extracted from public and Indian lands to reduce
royalties they would have had to pay the United States and the
Indian nations under federal mineral contracts, the Department of
Justice announced today.    

	The suit was originally filed in U.S. District Court in Lufkin, Texas, by three private
parties under the qui tam provisions of the False Claims Act, said U.S. Attorney Mike Bradford
of Beaumont, Texas. 

	Bradford said the original complaint, which was made public today, alleged that 14 oil-producing 
companies violated the False Claims Act by knowingly underpaying royalties on oil
taken from federal and Indian lands.  The Department's action was against four of the defendants:
Amoco Oil Company, Burlington Resources Inc., Conoco Inc. and Shell Oil Company and their
subsidiaries and affiliates.  There was no estimate of the value of the underpayment.

	The United States has advised the court that it has not decided whether to intervene in the
allegations involving the other 10 defendants, but intends to continue its investigation of those
assertions.

	Deputy Assistant Attorney General Stuart Schiffer of the Civil Division said that from
1988 to the present the companies undervalued hundreds of millions of barrels of oil taken from
three oil-producing areas: off-shore drilling in the Gulf of Mexico, oil sites in California and on-shore 
oil drilling sites in New Mexico, Wyoming and other western states.    

	The Department said oil production on federal and Indian lands is governed by mineral
lease agreements between the Department of the Interior and private oil companies under the
Federal Oil and Gas Royalty Management Act of 1982.  The Minerals Management Service of
the Department of the Interior oversees the collection of oil and gas royalties from companies
leasing mineral rights from the United States and Indian tribes.  By law, the oil companies must
pay the United States and the tribes a percentage of the value of the oil as a royalty. 

	The investigation of the allegations in the qui tam complaint was conducted by the U.S.
Attorney's office in Beaumont, Texas, the Department's Civil Division and the Department of
Interior. 

	Under the qui tam statute, a private party, known as a "relator," can file an action on
behalf of the United States and receive a portion of the recovery.  By law, the case remained
under seal while the United States investigated the relators' allegations to determine whether to
intervene in the case and prosecute the action.

	Under the False Claims Act, the United States may recover three times the amount of its
losses plus civil penalties.

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