Maxus Energy Subsidiary Settles Dispute With U.S.

Diamond Shamrock R&M; Inc. has agreed to pay the federal government $15 million to settle claims that the company overcharged for its crude oil.

Company spokeswoman Kathy Hughes said Tuesday that the $15 million payment to the U.S. Department of Energy will cause the company to post a net loss during the third quarter. She could not estimate the amount of the loss.

Diamond Shamrock said it would pay the $15 million to fully settle all civil and administrative claims relating to the company’s compliance with federal petroleum price and allocation regulations between January, 1973 and January, 1981.

Diamond Shamrock maintained that it fully complied with the regulations but said it agreed to the payment to avoid the time and expense of litigation.

The company is the oil refining and marketing subsidiary of the Dallas-based Maxus Energy Corp., formerly Diamond Shamrock Corp., which changed its name last April in connection with a restructuring plan.

“This was not an easy decision to reach, but with this liability removed we can better focus our resources on growing our company and adding shareholder value,” said Roger Hemminghaus, company chairman and chief executive officer.

The payment and interest will be made over a three-year period.

Department of Energy spokesman Jack Vandenberg said that as of July, there were 191 similar enforcement cases pending before the department, which has collected about $6 billion in such penalties since 1973.