SHELL REACHES SETTLEMENT IN LAWSUIT BY ALABAMA
Mar 21, 2002
Houston Chronicle
Business
Bloomberg News
Mobile, Ala. - Royal Dutch/Shell Group paid $33.5 million to settle a
lawsuit filed by the state of Alabama claiming more royalties from natural
gas Shell produced in state waters, a lawyer representing Alabama said
Wednesday.
Shell Oil, a Houston-based Shell U.S. unit, was sued in June 1999 for
underpaying royalties as far back as 1991 for gas from Mobile Bay, said
Richard Dorman of Cunningham, Bounds, Yance, Crowder & Brown. Alabama
got $27.1 million under the settlement. The remaining $6.4 million went
for attorney fees and expenses.
"Shell and the state have been working for a number of years to resolve
their differences on certain mineral lease provisions," Shell Oil
said in a statement. The company denied any wrongdoing.
Shell was among five oil companies sued by Alabama over royalties for
natural gas produced in the shallow waters off the state's coast.
Juries ruled against Exxon Mobil Corp. and Hunt Petroleum Corp. A second
case against Exxon Mobil and one against BP are still pending.
"This is good news in these tough financial times," Alabama
Gov. Don Siegelman said in a statement.
Before the settlement, Shell had paid Alabama more than $170 million in
royalties since 1991, the company said. Royal Dutch/Shell is the world's
second-biggest publicly traded oil company behind Exxon Mobil.
An Alabama jury in December 2000 ordered Exxon Mobil to pay $3.5 billion,
including damages, for underpayment of royalties from gas wells in state
waters. The Irving-based company is appealing, and the case is before
the Alabama Supreme Court.
Last year, an Alabama jury ordered Hunt Petroleum Corp. to pay $24.5 million
for underpayment of gas royalties.
Additional lawsuits are pending against Exxon Mobil for royalties of Mobil
Corp. before its purchase by Exxon and against BP for production by Amoco
Corp., Dorman said.