NEW YORK (Bloomberg) ? Chevron Corp., the second-largest US oil company, said the company may sell its stake in a Barbados reinsurer that American International Group Inc. improperly used to inflate its net worth.

Chevron's stake in reinsurer Union Excess Reinsurance Co. is worth about $2 million and was acquired in 1993 by Heddington Insurance Ltd., the Bermuda-based insurance unit of Texaco Inc. Chevron bought Texaco in October, 2001 for $43.6 billion.

AIG, which is being investigated by New York Attorney General Eliot Spitzer and the US Securities and Exchange Commission, said improper accounting of reinsurance transactions with Union Excess overstated its net worth by $1.1 billion. Heddington, among Union Excess's earliest investors, never bought protection from the reinsurer, said Chevron spokesman Andy Norman.

"We haven't made any final decisions yet, but it is a relatively small asset and we don't think there's any strategic reason to hold on to it," Norman said in a telephone interview from London. "Because we own less than ten percent and we did not use the company for reinsurance, we're very confident that our own accounting was entirely proper."

AIG first disclosed accounting improprieties March 30, saying it understated liabilities by failing to disclose its control of Union Excess as well as Richmond Insurance Co., a Bermuda-based reinsurer. AIG will correct its books to include the two reinsurers.

AIG spokesman Chris Winans declined to comment. Chevron also owns a small stake in Richmond, Norman said.

Chevron's stake in Union Excess was earlier reported by the Wall Street Journal, which also reported that AIG is a customer of several Union Excess investors.