WASHINGTON, Dec. 23 (UPI) -- Chevron Corp. agreed to pay $45.5 million to settle a lawsuit that claimed it underpaid royalties on natural gas leases, the U.S. Justice Department said.
The lawsuit involved royalties for gas pumped from federal and Indian properties that are monitored by the Minerals Management Service.
Chevron had been deducting from royalties the cost of boosting gas to the pressure required in pipelines. It also used transactions with affiliates to reduce the value of the gas it was extracting and "improperly reported processed gas as unprocessed gas to reduce royalty payments," the Justice Department said.
In a statement, Interior Secretary Ken Salazar said most of the settlement will be "disbursed to appropriate federal, state and American Indian accounts."
"Mineral royalties provide an important source of income for Native Americans, the United States and various states," he said.
The settlement covers royalty disputes from March 1988 to November 2008.
"Perhaps it is part of the human condition to take advantage of others and not conduct business in an honorable fashion. But it will never be the right way to do business," said Tony West, assistant attorney general for the Civil Division of the Justice Department.
