The Texaco-Chevron deal will create a new giant oil company, ChevronTexaco Corp.,
which will rank behind Exxon-Mobil, BP Amoco and Shell. Industry analysts have been speculating that Texaco may have to dispose of its interests in Equilon and Motiva for the $100 billion merger with Chevron to gain regulatory approval.
Shell released a statement saying it was in talks with Texaco over a possible restructuring of Equilon and Motiva. Equilon and Motiva are companies created by the combination in 1998 of the U.S. refining and marketing businesses of Shell, Texaco and Star Enterprises (a joint venture between Texaco and SRI). Shell and Texaco own 56% and 44% respectively of the ownership interests in Equilon. Shell, Texaco and SRI own approximately one third of the ownership interests of Motiva.
Equilon Commercial Fuels markets diesel and unbranded gasoline in the western and mid-western parts of the United States to wholesalers, truckstops and consumer end users. Motiva Commercial offers a full range of diesel fuel and heating oil products at a network of terminals throughout the East Coast and Gulf Coast. Motiva Commercial also offers mobile fleet fueling through Shell Fueling Services LLC on the East Coast.
Shell said that the aim of any restructuring would be to strengthen the competitive position and performance of the two joint ventures.
Truckinginfo.com contacted a spokesperson with Equilon enterprises about the merger, and all they had to say is that it is too early to tell how the deal will impact them.
However, during a Monday news conference, Texaco CEO Peter Bijur said, "The matter of divestitures will be the subject of regulatory reviews here in U.S. There have been discussions as reported by Shell today between Texaco, Shell and Saudi Aramco, and at the present time those discussions are continuing, but as I said it will be subject to the regulatory reviews in the U.S."
The combined company expects to achieve annual savings of at least $1.2 billion within six to nine months of the merger's completion. In the United States, ChevronTexaco will be the nation's third largest producer of oil and gas, and will hold the nation's third largest reserve position.