Kerr-McGee to settle oil royalty allegations

(Washington-AP) -- The U-S Justice Department says Oklahoma City-based Kerr-McGee will pay $13 million to settle claims it underpaid oil royalties.

Kerr-McGee allegedly underpaid the royalties on oil it took from land the company leased from the federal government and Indian tribes between 1988 and 1998.

The settlement agreement was signed yesterday by representatives of the Navajo Nation and the Assiniboine-Sioux tribe, as well as the federal government and Kerr-McGee.

Two private whistle-blowers who filed the original complaint in a Lufkin, Texas, federal court will share in the settlement.

J. Benjamin Johnson Junior and John Martinek alleged that 17 companies underpaid royalties on oil taken from more than 27 million acres of leased federal and Indian land onshore and offshore in 21 states.

They alleged that together the companies submitted more than $500,000 in false claims and damages and penalties might exceed $5 billion.