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. Last Updated: 07/27/2016

Chevron to Pay $775M

LOS ANGELES -- Chevron Corp. said Thursday that it has agreed to pay Occidental Petroleum Corp. $775 million to settle a 17-year-old lawsuit resulting from a scuttled merger involving two oil companies that no longer exist.

The payout ends a 1982 lawsuit brought by Cities Service Co., now a part of Occidental, against Gulf Oil Corp., now a part of Chevron. The settlement represents a windfall for Occidental but will also boost the fourth-quarter income of Chevron, which had set aside nearly $1 billion in reserves to cover its potential liability in the case.

The agreement eliminates a nagging headache for San Francisco-based Chevron and saves the nation's fifth largest oil company from a bill that could have reached more than $1 billion with steadily mounting interest.