Oil companies will pay $28 million for polluting Lake Tahoe groundwater with the gasoline additive MTBE under a settlement approved Monday in San Francisco Superior Court.

Shell Oil, Shell Products, Equilon Enterprises and Texaco have agreed to settle with the South Tahoe Public Utilities District. They formalized their deal today.

In April, a jury found the companies liable for making and selling gas with MTBE, which the Environmental Protection Agency has said may be carcinogenic.

The district sued the companies in 1998 after MTBE pollution forced it to close a third of its drinking water wells. The cost to remove the MTBE is around $45 million.

MTBE has been used in gasoline to help some regions reach federal clean air standards.