10:13 AM EDT, 08/15/2024 (MT Newswires) -- (Updates with Chevron's ( CVX ) comments in the last paragraph.)

Chevron ( CVX ) has agreed to pay $550 million over the next 10 years to the City of Richmond in California in exchange for the city's withdrawal of a ballot initiative to add a new tax, the city council said Wednesday.

The energy giant had challenged the 2024 Tax Ballot Initiative and believed it may have options to "challenge the ordinance itself," the council said.

Under the terms of the settlement agreement Wednesday, Chevron ( CVX ) would make annual payments starting July 1, 2025 and ending June 30, 2035. Chevron ( CVX ) would pay $50 million a year from 2025 to 2029 and $60 million from 2030 through 2034, according to Richmond.

"Chevron Richmond and the City of Richmond have reached an agreement that settles litigation and removes the Refining Business License Tax measure from the ballot," a representative for Chevron ( CVX ) said in an emailed statement to MT Newswires. "This agreement ensures Chevron Richmond can continue to provide Northern California with the affordable, reliable and ever-cleaner energy the region's economy needs," the statement said.

Price: 145.82, Change: +1.15, Percent Change: +0.79