Total affiliates to pay $15 million to resolve royalty allegations

Total SA and five affiliates agreed to pay $15 million to resolve allegations that they knowingly underpaid royalties on natural gas produced from federal and Indian leases, the US Department of Justice and US Office of Natural Resources Revenue jointly announced on Feb. 22.

The settlement resolves US allegations under the False Claims Act that Total Minatome Corp., Total Exploration Production USA Inc., Fina Oil & Chemical Co., Elf Exploration Inc., Total E&P USA, and their parent improperly deducted from royalty values the cost of boosting gas up to pipeline pressures, improperly reported processed gas as unprocessed gas to reduce royalty payments, and engaged in a variety of other royalties underreporting, which had been the subject of a series of outstanding administrative actions, DOJ and ONRR said.

They said the settlement arose from a lawsuit filed by Harrold Wright under the False Claims Act, and from a series of administrative actions separately initiated and pursued by ONRR, a division of the US Department of the Interior’s Policy, Management, and Budget Office, and its predecessor within the US Minerals Management Service before it was spun off from that agency in May 2010 as part of a restructuring.

Private citizens may file actions on behalf of the US and share in any recovery under the False Claims Act’s whistleblower provisions, DOJ said. Because Wright is deceased, his heirs will receive $23,000 plus interest as their share of the settlement. DOJ said that the agreement brings total settlements in the case to more than $280 million.

Contact Nick Snow at nicks@pennwell.com.

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