Whistleblower lawsuits lead to recovery of $533 million

Over the last decade, the government has collected at least $533 million in settlements from oil and gas companies who underpaid royalties on fuels extracted from public lands. 

A review of settlements over the last decade by iWatch News shows that a flurry of settlements occurred near the end of the Clinton administration and during the first year of the Bush administration. 

Only one case was settled between 2002 and 2009. Since President Barack Obama took power, at least five cases have been settled, the iWatch News analysis shows.

At the end of March, the government fined a Denver-based company $2.1 million after an employee disabled production gauges, which could have skewed royalty amounts. The employee was said to be concerned about oil overflowing from storage tanks.

In late March, the Justice Department and Occidental Petroleum Corp. settled a royalties collection case for $2.05 million. The government had accused Los Angeles-based Occidental, one of the world’s biggest oil companies, of “knowingly underpaying royalties” owed on natural gas produced from federal leases.

The settlement arose not from government inspections but from a whistleblower’s qui tam lawsuit. The whistleblower, Harrold Wright, was an independent oil and gas operator and a former chairman of the Natural Gas Supply Association, an industry group.

—Aaron Mehta