BP to pay U.S. government US$20.5M to settle claims that BP subsidiaries underpaid royalties owed on natural gas produced on federal, Native American land

Rachel Carter

NEW YORK , September 16, 2011 (Associated Press) – BP subsidiaries will pay $20.5 million to US to settle claims they underpaid gas royalties

The Justice Department says British oil giant BP will pay the U.S. $20.5 million to resolve claims made in a whistleblower lawsuit that its subsidiaries underpaid royalties owed on natural gas produced on federal and Native American land.

The BP divisions that must pay the settlement are Amoco Corp., Amoco Production Company, BP Exploration & Oil Inc., BP America Inc., Atlantic Richfield Company and Vastar.

A BP representative is not immediately available to comment.

Companies must pay royalties on the value of gas produced on land leased from the federal government and Native American tribes. Companies must report how much they owe each month.

The DOJ says that the BP companies improperly deducted certain costs from reported royalty values, and reported processed gas as unprocessed gas to reduce payments.

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