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PHILLIPS PETROLEUM PAYS $8 MILLION TO RESOLVE OIL ROYALTY CLAIMS

WASHINGTON, D.C. - Phillips Petroleum Company has agreed to pay $8 million to resolve claims under the False Claims Act that the company underpaid royalties due for oil produced on federal and Indian leases from January 1, 1988 to December 31, 1998, the Justice Department announced today.

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

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

Prior to today's agreement with Phillips, the Justice Department had reached settlements of more than $409 million with14 other oil companies to resolve claims of underpayment of royalties. 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; Burlington Resources, $8.5 million; Marathon, $7.7 million and Kerr-McGee, $13 million.

The investigation and settlement of the False Claims Act proceedings 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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