Pennzoil Ups Chevron Stake After IRS Acts : Energy: It now owns 9.4% of the oil giant, spending a total of $2.1 billion of its court settlement with Texaco.

Pennzoil Co. said Wednesday that it had increased its stake in Chevron Corp. after the Internal Revenue Service granted a five-month extension for Pennzoil to invest proceeds from its 1988 court settlement with Texaco Inc.

Pennzoil spent $2.1 billion of a net $2.6-billion settlement in 1989 to purchase 31.5 million common shares of Chevron, giving it 9% ownership in the company.

In a filing with the Securities and Exchange Commission in Washington, Pennzoil said that as of Wednesday it owned 32.8 million shares--about 9.4% of the 350.8 million shares outstanding.

Pennzoil said 1.27 million of those 32.8 million shares were purchased during the past 60 days on the New York Stock Exchange at an average price of $69.75 per share.

In July, Pennzoil notified the Federal Trade Commission of its intent to increase its ownership level to slightly under 10% by purchasing additional Chevron shares.

Pennzoil said it needed the extension from the IRS because of delays in obtaining clearance from the FTC, which monitors business activity that is considered potentially anti-competitive.

Under the IRS delay, Pennzoil said, the company now has until May 31 to invest proceeds from its historic 1988 Texaco litigation settlement.