ASSOCIATED PRESS A new shell sign was installed where a Texaco sign formerly stood in Porter, Texas. Shell Oil supplies 21,000 domestic Shell and Texaco stations after Texaco sold it shares in a joint partnership in order to meet antitrust requirements.

Texaco name falling victim
to oil merger

The Shell Oil logo is its replacement
on thousands of stations

---

By Mark Babineck
Associated Press

HOUSTON >> The Texaco star is dimming on many corners, as the effects of the rash of oil mergers in recent years trickle down to the service station level.

The megadeals that created industry giants such as Exxon Mobil Corp., ChevronTexaco Corp., BP plc, and ConocoPhillips resulted in the quick combining of the exploration and refining businesses of different companies.

While those shifts occurred largely out of the public view, the latest changes are more noticeable.

In one of the most high-profile examples, the Shell logo is replacing thousands of black-and-red Texaco stars across the country.

As name-brand changes go, "We're not sure whether we can find another in any industry that's this size," said Russell Caplan, vice president of Shell Oil Products U.S. "We can say confidently it's the biggest thing we've attempted."

The makeovers of many Texaco stations can be traced to Texaco's 2001 merger with Chevron.

Antitrust regulators forced Texaco to sell its U.S. gas stations, which it owned through a stake in a joint venture with Shell and another partnership with Shell and Saudi Refining Inc.

Overnight, Houston-based Shell Oil became the supplier for 21,000 Shell and Texaco stations in the United States, but Shell wanted to supply only 15,000 stations.

As a result, Shell, a subsidiary of the Anglo-Dutch oil company Royal/Dutch Shell, is selling some company-owned locations and telling some independent Texaco operators it doesn't want them to fly the Shell flag. At the same time, some Texaco operators are turning down Shell.

The surviving Texaco stations can move under the ChevronTexaco umbrella as early as June 2004. Two years later in 2006, the San Francisco-based company will regain exclusive use of the Texaco name from Shell.

By then, however, the once-proud Texaco name that grew from the Spindletop oil strike in southeast Texas a century ago may have lost some of its value. In addition to the fact that there will be fewer Texaco stations, the number of loyal customers may also have declined. Shell is in the process of converting Texaco credit cards users to Shell credit cards.

ChevronTexaco officials say the Texaco brand will still have value in 2006, but have not said what they plan to do with the name.

"The Texaco brand has a worldwide reputation as a symbol of quality products and customer service, and it has been one of the most recognized brands in the U.S. for more than 90 years," said Dave Reeves, ChevronTexaco's president of North America Products.

Shell and the Texaco stations it is taking over control about 14.3 percent of the U.S. gasoline market, according to a national survey by the Lundberg Letter, an industry publication. Exxon Mobil is next at 11.8 percent, then BP -- formerly BP Amoco -- at 11.7 percent, and ConocoPhillips at 11.3 percent.

Scott Swan, who stopped recently at a Texaco in west Houston to refuel his sport utility vehicle, didn't notice a small sign announcing that the station would soon become a Shell.

Swan said he is a "mostly Texaco" customer, but he wasn't concerned by the name change.

"It sounds like everybody is going to be under one umbrella," he said.

If some consumers are blase about the change, it's a big deal to some longtime station operators, said veteran gasoline industry observer Trilby Lundberg, author of the newsletter that bears his name.