NEW YORK (AP) — Three of the world’s biggest oil companies — Texaco, Shell and Saudi Aramco — may merge their U.S. refinery and marketing operations in a deal valued at $10 billion, the Wall Street Journal reported Monday.
The merger would combine Texaco Inc., a scion of John D. Rockefeller’s Standard Oil Co., with Shell Oil Co., the U.S. unit of Royal Dutch/Shell Group, one of the world’s largest publicly traded oil companies, and Star Enterprise, a joint venture between Texaco and Saudi Aramco, the state oil company of Saudi Arabia.
The merger could save the companies money by allowing them to lay off administrative workers and to share environmental research, the newspaper reported.
The deal would create two companies and retain the Texaco and Shell names at service stations. The combined companies would become the largest marketers of petroleum products in the country.
A letter of intent is expected to be signed within the next few months.
Because of its size, the merger will probably attract antitrust scrutiny by the Federal Trade Commission. In some states, the merger would control 5 percent of the petroleum market, while in others it could be as high as 30 percent.
Company officials would neither confirm nor deny that negotiations were taking place. Sources told the newspaper that the talks began in the spring and have taken place in New York, Atlanta, Houston and Los Angeles.