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WASHINGTON, D.C. -- Oxy USA Inc., a subsidiary of Occidental Petroleum, has agreed to pay $7.3 million to resolve claims under the False Claims Act and administrative claims that Los Angeles-based Oxy underpaid royalties due to the government for oil produced on federal and Indian land leases from January 1, 1988, to December 31, 1997.

Each month, Oxy is required to report the amount of oil produced and the value of the oil produced on federal and Indian leases. Oxy pays royalties based upon the value of the oil it reports. Federal leases are administered by the Minerals Management Service of the United States Department of the Interior.

Mike Bradford, United States Attorney for the Eastern District of Texas, and David W. Ogden, Acting Assistant Attorney General for the Department of Justice Civil Division, announced the settlement, which resolves allegations that Oxy systematically under reported the value of oil it produced and consequently paid less royalties than it owed.

The settlement agreement was signed by representatives of the Jicarilla Apache tribe, as well as the government and Oxy. A group of whistle blowers, also known as relators, who filed a complaint in the United States District Court in Lufkin, Texas, in February 1996 against Oxy on behalf of the United States will share in the proceeds of the settlement. The relators' lawsuit was filed under the qui tam provisions of the False Claims Act, under which relators can receive between 15 and 25 percent of the government's recovery in a case that the government joins. The government intervened as to Oxy in March 1999.

The investigation and settlement were jointly handled by the Office of the United States Attorney for the Eastern District of Texas and the Civil Division of the Department of Justice, and with cooperation of the Department of the Interior's Office of Inspector General and the Minerals Management Service.

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