Shell, Texaco Agree To Combine Refining

Shell Oil Co. and Texaco Inc. announced Tuesday they will combine refining and marketing operations that account for 14 percent of gasoline sales in the Western and Midwestern United States.

The two oil giants also said “significant progress” had been made in talks to join their eastern U.S. refining and marketing businesses with Saudi Refining Inc.

Shell will own 56 percent and Texaco 44 percent of the as-yet-unnamed company, which also will combine nationwide transportation and lubricants businesses.

With gasoline prices subject to wide fluctuations, oil companies have been looking for ways to cut the costs of turning oil into fuel.

Mobil and British Petroleum last year agreed to put together their European refining and marketing operations. Phillips Petroleum Co. and the Conoco Inc. unit of DuPont Co. tried a combination, but the deal fell apart when the companies couldn’t agree on price.