The Energy Department has accused five more major oil companies of overcharging customers by hundreds of millions of dollars from 1973 to 1976, industry sources disclosed last night.
In yet another cluster of actions by the department's Office of Special Counsel, the five firms were charged with crude oil pricing violations involving alleged mislabeling of "old oil" as "new oil," for which the company can charge a higher price.
Two firms, Exxon and Shell Oil Co., acknowledged receipt of a departmental Notice of Probable Violations last night accusing them of the overcharges.
Exxon said its violations were only a small fraction of the overall charge, approximately $12 million, including interest charges. E. A. Robinson, Exxon USA senior vice-president, said in a statement that "Exxon has been applying the regulation at issue in a correct and consistent manner for the six years these price controls have been in place."
Shell Oil Co.'s general manager for public affairs, P. J. Caroll, said, "Again we contest the basic for the NOPV, and find the DOE actions of political finger-pointing to be destructive and counterproductive." He said last night that he had not yet seen the amount of alleged Shell overcharges.
Department officials refused to comment on the notices last night, saying only that they would release a statement this morning.
The Shell and Exxon officials said they did not know which other companies were involved in the action, but one official said his company was told the overall action would be in the range of $500 billion.
The issue of how to label oil has been a controversial one. After the oil crisis in 1973, federal regulators sought to hold down oil prices, but at the same time encourage some new exploration and increased production from existing oil fields.
A tiered pricing system was created. "Old oil," the traditional output from an oilfield, was frozen at 1973 prices. Additional output above and beyond the production level at existing fields was considered "new oil" and could be sold at a higher price. Further, production from new oil wells could also bring a higher price as "new oil."
The DOE alleges in these cases that oil companies mislabeled "old oil" as "new oil" in an effort to charge higher prices. In previous cases involving similar charges, DOE has alleged, for example, that new wells were drilled on old sites in an effort to make "old oil" apear to be new oil. DOE does not charge the companies with any criminal violation, merely with mistinterpreting the rules.
In all, the DOE Office of Special Counsel has accused the 15 major oil companies of more than $6.4 billion in overcharges. By the end of the year, when that office must wrap up its audit of those companies and move its 600 auditors on to smaller firms, that number is expected to sewll to$10 billion or more.