Citigroup Inc., under pressure from the Obama administration to curb compensation, agreed to sell its Phibro LLC energy-trading business to avert a showdown over a potential $100 million payout to the chief of the unit.

Oil producer Occidental Petroleum Corp., based in Los Angeles, will pay “net asset value” for the unit, the companies said today. Occidental’s net investment in Phibro will be about $250 million.

Phibro had become a flashpoint for critics of excessive compensation at banks receiving federal aid because its chief, 58-year-old Andrew J. Hall, was paid more than $100 million in 2008 and is set to earn about the same this year.

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