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MARATHON OIL TO PAY $7.7 MILLION TO RESOLVE CLAIMS

WASHINGTON, D.C. - Marathon Oil Company has agreed to pay the United States

$7.7 million to resolve claims under the False Claims Act and administrative claims that the Houston-based corporation underpaid royalties due for oil produced on federal and Indian leases between 1988 and 1998, the Justice Department announced today.

Federal leases are administered by the Minerals Management Service of the Department of the Interior. Each month, Marathon is required to report the amount and value of oil produced on federal leases. The oil company pays royalties based upon the value of the oil they report.

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

Including today's agreement with Marathon, the Justice Department has reached settlements of more than $400 million to resolve claims of underpayment of royalties with 13 other oil companies. 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; Exxon Mobil for $7 million; Shell Oil, $110 million; Kerr-McGee, $13 million; and Burlington, $8.5 million.

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, 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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