Department of Justice Seal Department of Justice
FOR IMMEDIATE RELEASE
MONDAY, DECEMBER 3, 2001
WWW.USDOJ.GOV
CIV
(202) 514-2007
TDD (202) 514-1888

UNOCAL TO PAY U.S. MORE THAN $21 MILLION
FOR UNDERPAYMENT OF OIL ROYALTIES


WASHINGTON, D.C. Union Oil Company of California (Unocal) has agreed to pay $21.5 million to resolve claims under the False Claims Act and administrative claims that the company underpaid royalties due for oil produced on federal and Indian leases from 1980 to December 31, 1998, the Justice Department announced today. Unocal will pay $20,757,482, in cash and will cancel claims for refunds of overpayments of $742,518 due from the United States.

Federal leases are administered by the Minerals Management Service of the United States Department of the Interior. Each month, oil companies are required to report the amount of oil produced and the value of the oil produced on federal and Indian leases. The companies pay royalties based upon the value of the oil they report.

"Today's settlement is an example of the Justice Department's continued efforts to ensure that the government is compensated for underpayment of oil royalties on federal and Indian leases," said Robert D. McCallum Jr., Assistant Attorney General for the Civil Division.

J. Benjamin Johnson, Jr. and John Martinek filed a complaint in the United States District Court in Lufkin, Texas against Unocal on behalf of the United States under the qui tam or whistleblower provisions of the False Claims Act. The two will share in the proceeds of the settlement.

Including today's agreement with Unocal, the Justice Department has reached settlements of nearly $440 million to resolve claims of underpayment of oil royalties. Previously, the Department had reached agreements with Mobil Oil, $45 million; Oxy USA, Inc., $7.3 million; Chevron, $95 million; Conoco, $26 million; BP Amoco, $32 million; Texaco, $43 million; Pennzoil, $11.9 million; UPRC, $2.7 million; Sun Oil Company, $200,000; Kerr-McGee, $13 million; Exxon, $7 million; Shell, $110 million; Burlington Resources, $8.5 million; Marathon, $7.7 million; and Phillips, $8 million.

"We are pleased that this settlement restores to the taxpayers and Indian tribes the royalty payments due for oil produced on public lands," stated Wes Rivers, United States Attorney for the Eastern District of Texas. "We will continue to vigorously enforce the provisions of the False Claims Act to ensure the integrity of all financial transactions with the United States government."

The investigation and settlement of the False Claims Act proceedings 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, with the assistance of the Department of the Interior's Office of Inspector General and the Minerals Management Service.

The case is entitled US ex rel. Johnson v. Shell Oil Co., Civil No. 9:96CV66 (E.D. Texas).

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