Oil & Gas

Oil and gas companies frequently do not own the land they drill on, instead leasing land or mineral rights from the landowner, on terms that require royalty payments. Sometimes, the landowner is the federal government (and, for offshore drilling, it is virtually always the federal government), in which case the royalty payments are owed to the federal government and any knowing underpayment may trigger False Claims Act liability.

Case Examples

A number of successful False Claims Act cases have been brought on this theory. By way of example:

In 2011, BP Amoco agreed to pay $20.5 million to resolve claims that the company violated the False Claims Act by knowingly underpaying royalties owed on natural gas produced from federal and Indian land leases. The whistleblower’s share of the recovery in this case was $5.3 million. Read more

In 2009, Chevron Corporation agreed to pay more than $45 million to resolve claims it violated the False Claims Act by knowingly underpaying royalties. Read more

In 2001, Shell Oil Co. Agreed to pay $110 million to resolve claims the company had violated the False Claims Act by underpaying royalties from 1980 to 1998. Read more

If you have knowledge and solid evidence of fraud or false claims involving the oil and gas industry, please contact our Chicago whistleblower lawyers.
Consultations are free and confidential.