Texas Attorney General John Cornyn filed a civil lawsuit lastweek against ExxonMobil, accusing it of taking millions of dollarsin oil and gas revenue from land owned by the state’s taxpayers.Cornyn accused the company of defrauding Texas for at least 25years by “knowingly and wrongfully” producing oil and gas from 50acres of publicly owned right-of-way property in East Texas.

The lawsuit, filed in U.S. District Court in Houston, seeksroyalty payments plus interest, as well as punitive damages. Nocriminal charges were alleged. According to the filing, Texas isowed royalties in an oil field first discovered in 1940. In 1974,ExxonMobil obtained permission from the Texas Railroad Commissionto operate the field as a single unit, which allowed all of thelandowners to share in the proceeds from the oil, gas and otherrecovered minerals.

At the time, ExxonMobil promised that the rights of everymineral interest owner would be protected, Cornyn said. However,the state never received its rightful share of the proceeds, hesaid.

“They acted as if the State of Texas did not exist and took thestate’s interest and put it in their pocket,” Cornyn said. “As aresult, we believe that Exxon owes the State of Texas tens ofmillions of dollars in the proceeds from the oil that waswrongfully took, as well as interest on those sums.”

The lawsuit is similar to a court case in Alabama where a jury inDecember returned a $3.5 billion verdict against ExxonMobil for notpaying royalties on wells off the coast (see Daily GPI, Dec. 20, 2000).

ExxonMobil officials said the newest lawsuit stemming fromroyalty payments was “groundless,” and then criticized Cornyn forusing the courts to resolve the dispute instead of usingnegotiation with the company. ExxonMobil also said it would wage a”vigorous” defense.

“It appears we must now add officials of the State of Texas tothe growing list of litigious public officials more interested inheadlines than meaningful resolution to business matters,”ExxonMobil said in a prepared statement.

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