Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Tuesday, March 22, 2011

Occidental Oil Companies to Pay $2.05 Million to Resolve Allegations of Royalty Underpayments from Federal Land

WASHINGTON – Occidental Petroleum Corporation, Occidental Oil and Gas Corporation, and OXY USA Inc. have agreed to pay the United States $2.05 million plus interest to resolve claims that the companies violated the False Claims Act by knowingly underpaying royalties owed on natural gas produced from federal leases, the Department of Justice announced today. Occidental Petroleum Corporation is an international oil and gas exploration and production company headquartered in Los Angeles.

Congress has authorized federal land to be leased for the production of natural gas in exchange for the payment of royalties on the value of the gas that is produced. Each month, companies are required to report to the Department of the Interior the amount of royalty that is due. This settlement resolves claims that the Occidental oil companies improperly deducted from the royalty values they reported the cost of boosting gas up to pipeline pressures, and failed to properly report and pay royalties related to a natural gas keep-whole agreement, pool pricing for gas and gas re-sold to affiliates.

“Natural gas royalties provide an important source of federal and state income that is essential to support education, critical infrastructure improvements, and natural disaster protection, among other things,â€