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KERR-MCGEE TO PAY $13 MILLION TO RESOLVE OIL

WASHINGTON, D.C. - Kerr-McGee Corporation has agreed to pay $13 million to resolve claims under the False Claims Act and administrative claims that the corporation underpaid royalties due for oil produced on federal and Indian leases from 1988 to 1998, the Justice Department announced today.

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

"Today's settlement is an example of the Justice Department's determination to insure that the government is compensated for underpayment of oil royalties," said David W. Ogden, Assistant Attorney General for the Civil Division.

The settlement agreements were signed by representatives of several Indian tribes, as well as the federal government and Kerr-McGee. Two relators, J. Benjamin Johnson, Jr., and John Martinek, who had filed a complaint in the United States District Court in Lufkin, Texas against the company on behalf of the United States under the qui tam provisions of the False Claims Act will share in the proceeds of the settlement.

"This settlement brings us one step closer to restoring to the taxpayers and Indian tribes of the United States the money due for production of oil on public lands," said Mike Bradford, U.S. Attorney for the Eastern District of Texas.

Including today's agreement with Kerr-McGee, the Justice Department has reached settlements of more than $275 million to resolve claims of underpayment of royalties with ten 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: and Sun Oil Company, $200,000.

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.

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