Mobil Natural Gas Inc., Mobil Exploration & Producing U.S. Inc. and their affiliates will pay the United States $32.2 million to settle claims that they knowingly underpaid royalties on natural gas they took from federal and American Indian leases, thereby violating the False Claims Act.

Companies that produce natural gas from federal and American Indian leases are required to report the value of that gas to the Minerals Management Service, and pay a percentage of the reported value as royalties. Allegedly, the Mobil companies systematically used transactions with affiliated entities to falsely reduce the reported value of the natural gas, claim excessive deductions for the cost of gas transportation, and otherwise understate the natural gas production value they reported each month.

The lawsuit was originally filed by whistleblower Harold Wright on behalf of the United States under the qui tam or whistleblower provisions of the False Claims Act.  Because Mr. Wright is deceased, his heirs will receive a $975,000 out of the settlement.

Click here to read the full article, “Mobil Oil Companies to Pay U.S. $32.2 Million to Resolve Allegations of Underpayment of Royalties from American Indian and Federal Lands”