Shell share price: US unit to pay $4 million over cleanup fund ‘double-dipping’
iNVEZZ.com, Friday, February 28: Royal Dutch Shell Plc’s (LON:RDSA) US unit will pay $4 million (£2.4 million) to resolve allegations it falsely took money from a state fund to help clean up environmentally contaminated gas stations in Massachusetts, the state’s Attorney General has said.
Shell’s share price has eased about 0.4 percent in London so far this morning.
**Shell to settle false reimbursement allegations**
Martha Coakley, Attorney General of the Commonwealth of Massachusetts, announced yesterday in a statement that Shell Oil Company would pay $4 million to resolve allegations that it received reimbursement payments from a state fund for environmental cleanup projects despite having sought and received payments from its insurers to clean up the same sites.
Shell and its joint venture Motiva Enterprises LLC allegedly tapped into the state’s Underground Storage Tank Petroleum Product Cleanup Fund (UST Fund) which reimburses underground petroleum storage-tank owners and operators for some cleanup costs. Shell co-owns Motiva Enterprises with Saudi Refining Inc, a unit of Saudi Arabia’s national oil company Saudi Aramco.
“This programme exists to help station operators clean up harm done to the environment, not for big oil companies to profit by double-dipping,” Coakley said in the statement.
Under the UST Fund’s regulations, companies must disclose if they receive reimbursements from other sources, including insurance for expenses they submit to the fund. The AG alleges that Shell sued its insurers in 1993 over payments for cleanup costs at gasoline stations, including certain stations in Massachusetts, but did not disclose its lawsuit and settlements to the UST Fund until February 2012.
**Cleanup funds ‘double-dipping’**
Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.
The AG said that Shell would pay about $2 million back to fund and $2 million directly to the state. The settlement is the largest of its kind to ensue from an investigation into whether oil companies have made false statements and took state money to clean up leaks from underground tanks. To date, Coakley’s investigations have regained $7.9 million for the Commonwealth.
Earlier this month, Minnesota’s Department of Commerce filed a lawsuit against BP Plc (LON:BP) alleging that the UK oil major had fraudulently collected more than $25 million (£15 million) from a state cleanup fund. (BP share price: Minnesota to sue oil major to recover tank cleanup payments) The Midwest state claims that in the period 1988 to 2012 BP had sought and obtained over $25 million from Minnesota’s Petrofund while also being reimbursed by insurers for cleaning up leaking petroleum tanks.
**As of 10:03 UTC, buy Shell shares at 2176.50p.**
**As of 10:03 UTC, sell Shell shares at 2176.00p.**
Trade stocks with Hargreaves Lansdown from £5.95 per deal.
Prices can go up and down meaning you can get back less than you invest. This is not advice. Dealing services provided by Hargreaves Lansdown.