WASHINGTON, May 8: US energy giant Chevron is preparing to settle a government probe into kickbacks under the now-defunct oil-for-food UN programme for Iraq, the New York Times reported on Tuesday.

The Times said the US oil giant was to make an acknowledgement that it should have known about kickbacks on its Iraqi oil purchases, as part of an expected agreement with US prosecutors likely to include fines of up to $30 million.

The California-headquartered firm, America's second largest oil group, could not be reached for comment by AFP.

An official for the US Attorney's Office for the Southern District of New York, which the Times said was involved in the probe, declined to comment.

The newspaper said the probe relates to tens of millions of barrels of Iraqi oil that Chevron purchased between 2000 and 2002 under the former United Nations oil-for-food programme.

Under the UN programme, which ran from 1996 until just after the US-led invasion that ousted Saddam Hussein in March 2003, Iraq was allowed to sell oil and use the revenues to purchase humanitarian supplies.

Citing government investigators and uncovered documents, the Times said about $20m in “surcharges” were paid on Iraqi oil shipments bought by Chevron.

Chevron reportedly purchased much of the Iraqi oil it bought during this period through intermediaries, which included small oil traders.

US energy group El Paso Corp. agreed in early February to pay $7.7 million in penalties related to illegal surcharges on Iraqi oil contracts under the UN programme. El Paso agreed to pay the penalties without admitting or denying any wrongdoing.

Government investigators claimed that El Paso indirectly funnelled $5.5 million in “illegal surcharges” to Iraq related to oil purchases from third parties.

The Times report added that Chevron was still in negotiations with the government and that a final agreement could still be weeks away.—AFP