[Federal Register Volume 60, Number 129 (Thursday, July 6, 1995)]
[Notices]
[Pages 35186-35191]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-16608]
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DEPARTMENT OF ENERGY
Office of General Counsel
Proposed Consent Order With Occidental Petroleum Corporation
AGENCY: Department of Energy.
ACTION: Notice of proposed consent order and opportunity for public
comment.
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SUMMARY: The Department of Energy (DOE) announces a proposed Consent
Order between the DOE and Occidental Petroleum Corporation
(Occidental), including its wholly owned subsidiary OXY USA Inc. (OXY)
which was formerly Cities Service Oil and Gas Corporation, successor in
interest to Cities Service Company (Cities).
The agreement proposes to resolve matters relating to Occidental's
compliance with the federal petroleum price and allocation regulations
for the period October 1, 1979 through January 27, 1981. If this
Consent Order is made final, Occidental will pay to the DOE two hundred
seventy five million dollars ($275,000,000). Within thirty (30) days of
the effective date of the Consent Order, Occidental shall make an
initial payment to the DOE of one hundred million dollars
($100,000,000),
[[Page 35187]]
and thereafter five (5) equal annual payments of thirty-five million
dollars ($35,000,000), plus interest at the rate of seven and six-
tenths percent (7.6%), compounded quarterly, on the unpaid balance.
This Consent Order would not affect the Consent Order between Cities
and DOE dated October 31, 1979, which, except as otherwise provided
therein, covered the period August 19, 1973 through September 30, 1979.
To distribute the moneys collected under the Consent Order, DOE's
Office of Hearings and Appeals (OHA) will be petitioned to implement
Special Refund Procedures pursuant to 10 CFR Part 205, Subpart V, in
which proceedings any persons who claim to have suffered injury from
the alleged overcharges would have the opportunity to submit claims for
payment.
Pursuant to 10 CFR 205.199J, DOE will receive written comments on
the proposed Consent Order for thirty (30) days following publication
of this Notice and will consider all comments received from the public
in determining whether to accept the settlement and issue a final
Order, renegotiate the agreement and issue a modified agreement as a
final Order, or reject the settlement. DOE's final decision will be
published in the Federal Register, along with an analysis of
significant written comments in response to this Notice, as well as any
other considerations that were relevant to the final decision.
DATES: Comments must be received by August 7, 1995.
ADDRESSES: Interested parties are invited to submit written comments
concerning this proposed Consent Order to: Occidental Consent Order
Comments, U.S. Department of Energy, Office of General Counsel, GC-43,
1000 Independence Avenue, SW, Washington, DC 20585. Any information or
data considered confidential by the person submitting it must be
identified as such in accordance with the provisions of 10 CFR
205.9(f).
FOR FURTHER INFORMATION CONTACT: Betty L. Dingle-Brown, Department of
Energy, GC-43, 1000 Independence Avenue, SW, Washington, DC 20585,
(202) 523-3011.
SUPPLEMENTARY INFORMATION:
I. Resolution of Regulatory Issues
II. Determination of Reasonable Settlement Amount
III. Terms and Conditions of the Consent Order
I. Resolution of Regulatory Issues
Occidental is a successor in interest to Cities, which was a
refiner, producer and reseller subject to the DOE's audit jurisdiction
to determine compliance with the Federal Petroleum Price and Allocation
Regulations. During the period covered by this proposed Order (October
1, 1979 through January 27, 1981),1 Cities engaged in, among other
things, the production, importation, purchase, sale, exchange and
refining of crude oil, and the purchase and sale of refined product. As
a result of its audit, the DOE raised certain issues with respect to 91
reciprocal purchases and sales of crude oil in which Cities sold price-
controlled crude oil to resellers and concurrently purchased price
exempt-certified crude oil at a discount from the market price. These
transactions and OXY's potential liability arising therefrom constitute
the central issue which would be resolved by the proposed Order.
\1\ In a previous Consent Order dated October 31, 1979, and
generally covering the period August 19, 1973 through September 30,
1979, Cities agreed to price rollback, refund and bank reduction
remedies totaling $177 million.
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In a Proposed Remedial Order issued in March 1985, DOE sought to
hold OXY liable for overcharges in these transactions, seeking $263.8
million plus prejudgment interest, on the ground that Cities violated
DOE's crude oil resale price rule applicable to refiners. DOE prevailed
at the initial stage before the OHA. Cities Service Oil and Gas Corp.,
17 DOE para. 83,021 (1988). Five years later, the OHA decision was
vacated by the Federal Energy Regulatory Commission (FERC), to which
Cities had appealed. Cities Service Oil and Gas Corp., 65 FERC para.
61,403 (1993), reconsideration denied, 66 FERC para. 61,222 (1994). The
relevant statute, 42 U.S.C. 7193, provides that FERC's decision in such
a case is a final action by DOE.2
\2\ Two groups of intervenors, however, attempted to appeal
FERC's decision. Alabama v. FERC, CA No. 94-0347 (D.D.C.), and
Consolidated Edison Co. of New York, Inc. v. O'Leary, CA No. 94-0352
(D.D.C.). On June 8, 1995, the court dismissed both suits based on
the plaintiffs' lack of standing. Plaintiffs in the second case have
noticed their appeal.
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On February 21, 1992, pursuant to OHA's remand in the 1988 Remedial
Order and while Cities' appeal to FERC was pending, DOE issued a
Revised Proposed Remedial Order (RPRO) to OXY under an alternative
theory of liability. The RPRO charged that in 82 reciprocal crude oil
transactions between October 1979 and December 1980, Cities violated
DOE's Entitlements Program reporting regulations: (1) That the
transactions served no legitmate business or economic purpose and were
therefore legally ineffective in transforming Cities' controlled crude
oil into entitlements purchase-exempt crude; and (2) that Cities had no
plausible basis for its professed belief that entitlements-exempt uses,
rather than miscertification, explained the deep discounts Cities
obtained on the exempt-certified crude. OXY USA Inc., OHA Case No. LRO-
0003. In the remand proceeding, DOE is seeking $253.767 million in
refunds, plus prejudgment interest which would currently total $915.533
million.
A tentative settlement reached between DOE and Occidental in 1989
was rejected by the DOE in 1991 upon consideration of the comments and
testimony submitted in the course of the public process.3 Attempts
to renegotiate or modify the proposed Order were unavailing, and later
efforts conducted pursuant to the FERC's settlement procedures also led
to an impasse. More recently, in January 1995, DOE and Occidental,
along with intervenor parties, agreed to attempt a structured
mediation. The settlement proposed today represents the product of that
mediation process.
\3\ 54 FR. 22469 (May 24, 1989); 54 FR. 35371 (Aug. 25, 1989);
56 FR. 21361 (May 8, 1991).
II. Determination of Reasonable Settlement Amount
DOE has preliminarily agreed to the settlement terms after
considering the factual and legal issues in dispute in the litigation,
assessing the litigation risks associated with establishing the alleged
violations, and considering the benefit to the public from prompt
receipt of the benefits from settlement of the extensive number of
legal and factual issues that would require intensive additional
litigation to resolve. DOE also considered the litigation risk factors
generally present in all regulatory disputes in this program based on
its current legal framework. The total amount of OXY's potential
liability resulting from the subject transactions could only be
recovered by the government if, in litigation, all issues were resolved
in the DOE's favor. The risks inherent in such litigation make such an
outcome uncertain.
Based on consideration of all of these factors, DOE's preliminary
determination is that Occidental's agreement to the terms of the
proposed Consent Order constitutes a settlement which is in the public
interest.
III. Terms and Conditions of the Consent Order
If the Consent Order is made final, Occidental Petroleum and OXY
will be jointly and severally liable for the following payments: $100
million within 30 days of the Consent Order
[[Page 35188]]
becoming effective, and five subsequent annual installments of $35
million plus interest on the unpaid balances at 7.6% per annum,
compounded quarterly. In all, the principal payments will be $275
million, and the interest will total approximately $41 million.
Payments which are more than fifteen days late will accrue interest at
the rate of 15.2% per annum. The DOE's Office of Hearings and Appeals
will be petitioned to implement Special Refund Procedures for
distribution of the settlement funds pursuant to 10 CFR part 205,
subpart V.
Upon becoming effective, DOE and Occidental would file appropriate
pleadings to withdraw all claims and dismiss with prejudice all
proceedings covered by the Consent Order, including the case pending
before the OHA.
The agreement does not affect any rights Occidental may have in
connection with the funds at issue in a specific refund proceeding
pending before the DOE's Office of Hearings and Appeals, Enron Corp./
OXY USA Inc., OHA Case No. RF340-00112, or in the exception proceeding
originally styled The 341 Tract Unit of the Citronelle Field/OXY USA
Inc., OHA Case No. RF345-00021 and now under review in Amoco Oil Co.,
et al. v. DOE, CA No. H-94-2423 (S.D. Tex.) and in R. H. Stechman, et
al. v. DOE, CA No. 94-0887-A-M (S.D. Ala.).
If the agreement is made final, Occidental will withdraw certain
requests and portions of other requests made by its attorneys under the
Freedom of Information Act. Occidental and DOE mutually release each
other from claims and actions arising under the subject matters covered
by the proposed Consent Order. Also, the proposed Order does not affect
the right of any other party to take action against Occidental, or of
Occidental or the DOE to take action against any other party. Finally,
Occidental may withdraw from the agreement if the settlement is not
made final by the one hundred twentieth (120th) day following
execution.
Submission of Written Comments
The proposed Consent Order cannot be made effective until the
conclusion of the public review process, of which this Notice is a
part.
All comments received by the thirtieth (30th) day following
publication of this Notice in the Federal Register will be considered
before determining whether to adopt the proposed Consent Order as a
final Order. Any modifications of the proposed Consent Order which
significantly alter its terms or impact will be published for
additional comments. If, after considering the comments it has
received, DOE determines to issue the proposed Consent Order as a final
Order, the proposed Order will be made final and effective by
publication of a Notice in the Federal Register.
Issued in Washington, DC, on June 29, 1995.
Eric J. Fygi,
Deputy General Counsel.
I. Introduction
101. This Consent Order is entered into between Occidental
Petroleum Corporation (``Occidental''), including its wholly owned
subsidiary OXY USA Inc. (``OXY'') (formerly Cities Service Oil and Gas
Corporation, successor in interest to Cities Service Company (``Cities
Service'')), and the United States Department of Energy (``DOE'').
Except as otherwise provided herein, this Consent Order settles and
finally resolves all civil and administrative claims and disputes,
whether or not heretofore asserted, between the DOE, as hereinafter
defined, and Occidental, as hereinafter defined, relating to
Occidental's compliance with the federal petroleum price and allocation
regulations, as hereinafter defined, during the period October 1, 1979,
through January 27, 1981 (all the matters settled and resolved by this
Consent Order are referred to hereinafter as ``the matters covered by
this Consent Order''). This Consent Order does not affect the Consent
Order between Cities Service and DOE dated October 31, 1979, which,
except as otherwise provided therein, covered the period August 19,
1973, through September 30, 1979.
II. Jurisdiction, Regulatory Authority and Definitions
201. This Consent Order is entered into by the DOE pursuant to the
authority conferred upon it by Sections 301 and 503 of the Department
of Energy Organization Act (``DOE Act''), 42 U.S.C. 7151 and 7193,
Executive Order No. 12009, 42 FR 46267 (1977); Executive Order No.
12038, 43 FR 4957 (1978); and 10 CFR 205.l99J.
202. For purposes of this Consent Order, the phrase ``federal
petroleum price and allocation regulations'' means all statutory
requirements and administrative regulations and orders regarding the
pricing and allocation of crude oil, refined petroleum products,
natural gas liquids, and natural gas liquid products, including the
entitlements and mandatory oil import programs, administered by the
DOE. The federal petroleum price and allocation regulations include
(without limitation) the pricing, allocation, reporting, certification,
and recordkeeping requirements imposed by or under the Economic
Stabilization Act of 1970, the Emergency Petroleum Allocation Act of
1973, the Federal Energy Administration Act of 1974, the DOE Act, any
and all amendments to said acts, Presidential Proclamation 3279, all
applicable DOE regulations codified in 6 CFR parts 130 and 150 and 10
CFR parts 205, 210, 211, 212, and 213, and all rules, rulings,
guidelines, interpretations, clarifications, manuals, decisions,
orders, notices, forms, and subpoenas relating to the pricing and
allocation of petroleum products. The provisions of 10 CFR 205.l99J and
the definitions under the federal petroleum price and allocation
regulations shall apply to this Consent Order except to the extent
inconsistent herewith. Reference herein to ``DOE'' includes, besides
the Department of Energy, the Cost of Living Council, the Federal
Energy Office, the Federal Energy Administration, the Office of Special
Counsel, the Economic Regulatory Administration and all agencies
succeeding to the DOE's authority to administer or enforce the federal
petroleum price and allocation regulations. References in this Consent
Order to ``Occidental'' shall include: (1) Occidental Petroleum
Corporation, its subsidiaries and affiliates, and its and their
predecessors, including Cities Service Company and Cities Service Oil
and Gas Corporation, and their subsidiaries and affiliates, (2) all of
Occidental's petroleum-related activities, whether as a refiner,
producer, operator, working interest or royalty interest owner,
reseller, retailer, natural gas processor, or otherwise, and (3)
Occidental's present and former directors, officers and employees.
III. Facts
The stipulated facts upon which this Consent Order is based are as
follows:
301. During the period covered by this Consent Order, Occidental
was a ``refiner'', ``producer'' and ``reseller'' as those terms are
defined in the federal petroleum price and allocation regulations and
was subject to the jurisdiction of the DOE.
302. On October 31, 1979, Cities Service and the DOE entered into a
Consent Order which settled all claims and disputes against Cities
Service by the DOE, except as otherwise provided therein, for the
period August 19, 1973, through September 30, 1979, with respect to the
statutory and regulatory petroleum programs administered and
[[Page 35189]]
enforced by the DOE and its predecessor agencies.
303. Following the 1979 Consent Order, the DOE audited Cities
Service's compliance with the federal petroleum price and allocation
regulations for the period after September 30, 1979. As a result, the
DOE raised certain issues with respect to certain related purchases and
sales of crude oil in which Cities Service sold price-controlled crude
oil to resellers and purchased exempt-certified crude oil from those
resellers. The DOE initiated formal enforcement action alleging that
these transactions violated certain provisions of the federal petroleum
price and allocation regulations. Occidental maintains, however, that
Cities Service's conduct with respect to these transactions was in all
respects lawful and in accordance with the federal petroleum price and
allocation regulations. The DOE and Occidental have each asserted its
belief that its respective legal and factual positions regarding such
transactions are meritorious. These positions were emphasized in the
intensive review and exchange of information conducted during the
audit, during litigation of those issues, and during the settlement
negotiation process. Neither DOE nor Occidental disavows any position
taken with respect to such matters. However, in order to avoid the
expense of further protracted and complex litigation and the disruption
of its orderly business functions, Occidental has agreed to enter into
this Consent Order, which, among other things, resolves both the
principal and interest component of the claims that the DOE has
asserted against Cities Service and/or Occidental in connection with
the above-described transactions. The DOE believes this Consent Order
constitutes a satisfactory resolution of the matters covered herein and
is in the public interest.
IV. Remedial Provisions
401. In full and final settlement of all matters covered by this
Consent Order and in lieu of all other remedies which have been or
might be sought by the DOE against Occidental for such matters under 10
CFR 205.1991 or otherwise, Occidental and OXY shall be jointly and
severally liable to pay to the DOE two hundred seventy-five million
dollars ($275,000,000.00), plus interest, in the manner specified in
paragraphs 402, 403, 404, and 405.
402. On or before the thirtieth (30th) day following the Effective
Date of this Consent Order, either Occidental or OXY shall make an
initial payment to the DOE of one hundred million dollars
($100,000,000.00). The date of such payment is designated, for purposes
of this Consent Order, as the Initial Payment Date.
403. On or before each of the first five anniversaries of the
Initial Payment Date, either Occidental or OXY shall pay to DOE an
amount equal to thirty-five million dollars ($35,000,000.00), plus
interest at the rate of seven and six-tenths percent (7.6%), compounded
quarterly, accrued on such payment from the Initial Payment Date to the
date of such payment. If any anniversary of the Initial Payment Date is
not a business day, the payment shall be due on the first business day
following such anniversary.
404. Payments received after the due date shall include additional
interest, calculated at the rate of 7.6 percent per annum for the first
fifteen (15) days after the due date and 15.2 percent per annum
thereafter.
405. The payments pursuant to paragraphs 402 through 404 shall be
made by wire transfer in accordance with instructions furnished to
Occidental and OXY by the DOE in a timely manner.
406. Inasmuch as this Consent Order settles both the principal and
interest portions of all claims made by the DOE against Occidental, the
principal portion of the payments made pursuant to paragraphs 402
through 404 shall be deemed to be a payment of principal and interest
in the same ratio that the principal portion of the DOE's claim in the
proceeding styled In the Matter of OXY USA Inc., Case No. LRO-0003,
currently pending before the Office of Hearings and Appeals (``OHA''),
bears to the interest portion of the DOE's claim in that case as of the
Effective Date.
407. Payments made pursuant to this Consent Order shall be
distributed by the DOE pursuant to the special refund procedures
prescribed by 10 CFR Part 205, subpart V.
V. Issues Resolved
501. All pending and potential civil and administrative claims,
whether or not known, demands, liabilities, causes of action or other
proceedings by the DOE against Occidental regarding Occidental's
compliance with and obligations under the federal petroleum price and
allocation regulations during the period covered by this Consent Order,
whether or not heretofore raised by an issue letter, Notice of Probable
Violation, Notice of Proposed Disallowance, Proposed Remedial Order,
Remedial Order, actions in court or otherwise, are resolved,
extinguished and released as to Occidental by this Consent Order. This
Consent Order, however, does not resolve, extinguish, release or
otherwise affect DOE's claims against any other party.
502. (a) Except as otherwise provided herein, compliance by
Occidental with this Consent Order shall be deemed by the DOE to
constitute full compliance for administrative and civil purposes with
all federal petroleum price and allocation regulations for matters
covered by this Consent Order. In consideration for performance as
required under this Consent Order by Occidental, the DOE hereby
releases Occidental completely and for all purposes from all
administrative and civil judicial claims, demands, liabilities or
causes of action, including, without limitation, claims for civil
penalties that the DOE has asserted or might otherwise be able to
assert against Occidental before or after the date of this Consent
Order for alleged violations of the federal petroleum price and
allocation regulations with respect to matters covered by this Consent
Order. The DOE will not initiate or prosecute any such administrative
or civil judicial matter against Occidental or cause or refer any such
matter to be initiated or prosecuted, nor will the DOE or its
successors directly or indirectly aid in the initiation of any such
administrative or civil judicial matter against Occidental or
participate voluntarily in the prosecution of such actions. The DOE
will not assert voluntarily in any administrative or civil judicial
proceeding that Occidental has violated the federal petroleum price and
allocation regulations with respect to the matters covered by this
Consent Order or otherwise take any action with respect to Occidental
in derogation of this Consent Order. However, nothing contained herein
shall preclude the DOE from defending the validity of the federal
petroleum price and allocation regulations.
(b) This Consent Order settles and finally resolves all aspects of
Occidental's potential liability to the DOE under the federal petroleum
price and allocation regulations, including but not limited to its
capacity as an operator or working interest or royalty interest owner
of a crude oil producing property. In addition, if Occidental was the
operator of a property that produced crude oil for all or part of the
period covered by this Consent Order, the DOE shall not initiate or
prosecute any enforcement action against any person for noncompliance
with the federal petroleum price and allocation regulations during such
period relative to such property. Otherwise, the DOE reserves the right
to initiate and prosecute enforcement actions against any person other
than Occidental for
[[Page 35190]]
noncompliance with the federal petroleum price and allocation
regulations, including suits against operators for overcharges for
crude oil when Occidental is a working interest or royalty interest
owner in such crude oil production. In that connection, Occidental and
the DOE agree that the amount paid to the DOE pursuant to this Consent
Order is not attributable to Occidental's activities as a working
interest or royalty interest owner on properties on which it is not the
operator. Furthermore, Occidental and the DOE agree that the Consent
Order and the payments hereunder do not resolve, reduce or release the
liability of any other person for violations on properties of which
(but only for the times during which) Occidental is or was a working
interest or royalty interest owner (and not the operator) or affect any
rights or obligations between Occidental and the operator or any other
working interest or royalty interest owner.
(c) The DOE will not seek or recommend any criminal fines or
penalties based on information or evidence presently in its possession
for the matters covered by this Consent Order, provided, however, that
nothing in this Consent Order precludes the DOE from (1) seeking or
recommending such criminal fines or penalties if information
subsequently coming to its attention indicates, either by itself or in
combination with information or evidence presently known to DOE, that a
criminal violation may have occurred, or (2) otherwise complying with
its obligations under law with regard to forwarding information of
possible criminal violations of law to appropriate authorities. Nothing
contained herein may be construed as a bar, estoppel or defense against
any criminal or civil action brought by an agency of the United States
other than the DOE under (i) Section 210 of the Economic Stabilization
Act of 1970 or (ii) any statute or regulation other than the federal
petroleum price and allocation regulations. Finally, this Consent Order
does not prejudice the rights of any third party or Occidental in any
private action, including an action for contribution by or against
Occidental.
(d) Occidental releases the DOE completely and for all purposes
from all administrative and civil judicial claims, liabilities or
causes of action that Occidental has asserted or may otherwise be able
to assert against the DOE relating to the DOE's administration of the
federal petroleum price and allocation regulations, except that nothing
herein is intended to affect in any way any rights Occidental may have
to receive a portion of the funds at issue in (1) the proceeding
originally styled The 341 Tract Unit of the Citronelle Field/OXY USA
Inc., OHA Case No. RF345-00021, and now under review in Amoco Oil Co.,
et al. v. DOE, Civil Action No. H-94-2423 (S.D. Tex., filed July 15,
1994), and R.H. Stechmann, et al. v. DOE, Civil Action No. 94-0887-A-M
(S.D. Ala., filed Nov. 17, 1994), and (2) the proceeding pending before
OHA styled Enron Corp./OXY USA Inc., OHA Case No. RF340-00112. However,
neither this release nor any other provision of this Consent Order
precludes Occidental from asserting any factual or legal position or
argument as a defense to any action, claim, or proceeding brought by
the DOE, the United States, or any agency of the United States. Nor
does it preclude Occidental from asserting a defense, counterclaim or
offset to any action, claim or proceeding brought by any other person.
(e) Nothing in this Consent Order shall affect any rights
Occidental may have to challenge the DOE's failure or refusal to
produce documents in response to requests therefor that have been or
may in the future be made by Occidental or its attorneys pursuant to
the Freedom of Information Act, 5 U.S.C. 502, et seq. (``FOIA''),
except that Occidental hereby withdraws and waives its rights to have
documents produced in response to the following requests: (1) The June
20, 1988 request submitted by Phillips, Nizer, Benjamin, Krim & Ballon
(Request No. 8872206R); (2) paragraph 2 of the March 22, 1993 request
submitted by Skadden, Arps, Slate, Meagher & Flom (``Skadden'')
(Request No. 93032402R); (3) paragraphs 1, 3-8, 13-15 and 17-18 of the
June 3, 1993 request submitted by Skadden (Request No. 93060803RG); (4)
the October 29, 1993 request submitted by Skadden (Request No.
93110217R); (5) the January 21, 1994 request submitted by Skadden
(Request No. 94012510X); and (6) the two September 19, 1994 requests
submitted by Skadden (both designated Request No. 94092001GC).
503. (a) Within five (5) days after the execution of the Consent
Order by both parties, the DOE and Occidental shall jointly file
written notification of the fact of such execution to the OHA. In
addition, if, by September 8, 1995, this Consent Order has neither
become effective nor has been withdrawn pursuant to Article IX of this
Consent Order, DOE and Occidental shall jointly file with the OHA a
request that OHA stay or otherwise defer consideration of all further
action in the proceeding styled In the Matter of OXY USA Inc., Case No.
LRO-0003, until such time as the Consent Order has become effective or
been withdrawn pursuant to Article IX. In addition, in the event that
the plaintiffs in the actions in the United States District Court for
the District of the District of Columbia styled State of Alabama, et
al. v. Federal Energy Regulatory Commission, et al., Civil Action No.
94-0347-HHG, and Consolidated Edison Co. of New York, Inc., et al. v.
Hazel R. O'Leary, et al., Civil Action No. 94-0352-HHG, take an appeal
prior to the Effective Date of this Consent Order from the decision
filed by that court on June 8, 1995 dismissing their complaints, the
DOE and Occidental shall, within fifteen (15) days after the filing of
such appeal or by July 7, 1995, whichever is later, jointly file with
the appellate court or courts written notification that this Consent
Order has been executed, which notice shall request that further
proceedings on the appeal be suspended until such time as this Consent
Order has become effective or has been withdrawn pursuant to Article IX
of this Consent Order.
(b) Within fifteen (15) days after the Effective Date of this
Consent Order, Occidental and the DOE shall file or cause to be filed
appropriate pleadings and will take all other steps necessary to
withdraw all claims and dismiss with prejudice all proceedings covered
by this Consent Order then pending before OHA or any other
administrative tribunal, and to dismiss with prejudice any court
proceeding then pending involving an appeal from or seeking review of a
decision by the OHA, the Federal Energy Regulatory Commission
(``FERC''), a federal district court or a federal court of appeals in
any such proceedings. With respect to the court cases referred to in
subparagraph (a) above, the requests to dismiss shall, in addition to
other grounds for dismissal that might be applicable, recite that the
underlying claim that was the subject of the FERC orders under review
in those cases has been fully compromised and released by this Consent
Order.
504. Execution of this Consent Order constitutes neither an
admission by Occidental nor a finding by the DOE of any violation by
Occidental of any statute or regulation. The DOE has determined that it
is not appropriate to seek to impose civil penalties for the matters
covered by this Consent Order, and the DOE will not seek any such civil
penalties. None of the payments or expenditures made by Occidental or
OXY pursuant to this Consent Order are to be considered for any purpose
as penalties, fines, or forfeitures or as settlement of any potential
liability for penalties, fines or forfeitures.
[[Page 35191]]
505. Notwithstanding any other provision herein, with respect to
the matters covered by this Consent Order, the DOE reserves the right
to initiate an enforcement proceeding or to seek appropriate penalties
for any newly discovered regulatory violations committed by Occidental,
but only if Occidental has knowingly concealed material facts relating
to such violations. The DOE also reserves the right to seek appropriate
judicial remedies, other than full rescission of this Consent Order,
for any knowing misrepresentation of fact material to this Consent
Order made by Occidental during the course of the audit or the
negotiations that preceded this Consent Order.
VI. Recordkeeping, Reporting and Confidentiality
601. Occidental shall maintain such records as are necessary to
demonstrate compliance with the terms of this Consent Order. Except for
such records, Occidental is relieved of its obligation to comply with
the recordkeeping requirements of the federal petroleum price and
allocation regulations relating to the matters settled by this Consent
Order.
602. Occidental will not be subject to any audit requests, report
orders, subpoenas, or other administrative discovery by DOE relating to
Occidental's activities subject to such regulations relating to the
matters settled by this Consent Order.
603. The DOE shall treat all information provided to it by
Occidental pursuant to negotiations which were conducted with respect
to this Consent Order as confidential. Nothing herein shall alter or
modify in any way the parties' obligations regarding confidentiality
set forth in that Mediation Agreement between the DOE, Occidental and
other parties entered into by the DOE and Occidental on or about
January 13, 1995. Nor shall anything herein be deemed to waive or
prejudice any right Occidental may have independent of this Consent
Order or such Mediation Agreement regarding the disclosure of
confidential information.
VII. Contractual Undertaking
701. It is the understanding and express intention of Occidental
and the DOE that this Consent Order constitutes a legally enforceable
contractual undertaking that is binding on the parties and their
successors and assigns. Notwithstanding any other provision herein,
Occidental (and its successors and assigns) and the DOE agree that the
sole and exclusive remedy for a breach of this Consent Order shall be
the filing of a civil action in an appropriate United States district
court, and the DOE also reserves the right to seek appropriate
penalties and interest for any failure to comply with the terms of this
Consent Order. The DOE will undertake the defense of the Consent Order,
as made effective, in response to any litigation challenging the
Consent Order's validity in which the DOE, the FERC or any of their
officials or employees is named as a party. Occidental agrees to
cooperate with the DOE in the defense of any such challenge. Nothing in
this Consent Order shall be construed as preventing Occidental from
also participating as a party in such defense.
VIII. Final Order
801. Upon becoming effective, this Consent Order shall be a final
order of the DOE having the same force and effect as a remedial order
issued pursuant to Section 503 of the DOE Act, 42 U.S.C. 7193, and 10
CFR 2O5.l99B. Occidental hereby waives its right to administrative or
judicial review of this Order, but Occidental reserves the right to
participate in any such review initiated by a third party.
IX. Effective Date
901. This Consent Order shall become effective as a final order of
the DOE on the date that notice to that effect is published in the
Federal Register (the ``Effective Date''). Prior to that date, the DOE
will publish notice in the Federal Register that it proposes to make
this Consent Order final and, in that notice, will provide not less
than thirty (30) days for members of the public to submit written
comments. The DOE will consider all written comments in deciding
whether to adopt the Consent Order as a final order, to withdraw
agreement to the Consent Order, or to attempt to renegotiate the terms
of the Consent Order.
902. Until the Effective Date, the DOE reserves the right to
withdraw consent to this Consent Order by written notice to Occidental,
in which event this Consent Order shall be null and void. If this
Consent Order is not made effective on or before the one hundred
twentieth (120th) day following execution by Occidental, Occidental
may, at any time thereafter until the Effective Date, withdraw its
agreement to this Consent Order by written notice to the DOE, in which
event this Consent Order shall be null and void.
I, the undersigned, a duly authorized representative of
Occidental Petroleum Corporation and OXY USA Inc., hereby agree to
and accept on behalf of Occidental Petroleum Corporation and OXY USA
Inc. the foregoing Consent Order.
Dated: June 27, 1995.
Donald P. de Brier,
Executive Vice President and General Counsel, Occidental Petroleum
Corporation.
I, the undersigned, a duly authorized representative of the
United States Department of Energy, hereby agree to and accept on
behalf of the Department of Energy the foregoing Consent Order.
Dated: June 27, 1995.
Eric J. Fygi,
Deputy General Counsel, U.S. Department of Energy.
[FR Doc. 95-16608 Filed 7-5-95; 8:45 am]
BILLING CODE 6450-01-P
