DALLAS (CN) – Anadarko Petroleum and its subsidiary Kerr-McGee will pay more than $17 million to settle claims that they knowingly underpaid royalties on natural gas from federal and Indian leases.
Federal prosecutors say Anadarko, Kerr-McGee and their affiliates improperly deducted the cost of boosting gas up to pipeline pressures and reported processed gas as unprocessed gas to reduce royalty payments.
The settlement arises from a lawsuit Harrold Wright filed in 1996 under the False Claims Act.
Anadarko, one of the largest independent oil and natural gas companies in the world, bought Kerr-McGee in 2006. Since Wright is deceased, his heirs will receive $1.95 million plus interest as their share of the settlement.
The Justice Department said it has intervened against several other defendants in the Wright lawsuit, and obtained $249 million in settlements so far.
“This case is one in a series of significant oil and gas settlements that demonstrate our commitment to ensuring that companies pay all of the royalties they owe,” Tony West, assistant attorney general for the Department of Justice’s Civil Division said in a statement.