FUELS: CHEVRONTEXACO

Name: ChevronTexaco

At the end of 2000 it was announced that the Chevron and Texaco oil companies would merge their operations to create the fourth biggest oil-producing firm in the world behind Exxon/Mobil, Royal Dutch Shell and BP Amoco. Texaco and Chevron were already partners in the Asian Pacific region with the company known as Caltex but the new deal was a global one.

Texaco traced its roots back to when "Buckskin Joe" Cullinan, an employee of Standard Oil in Pennsylvania, decided to start his own oil company in Texas in 1897. When a big oil field was discovered in 1901 Cullinan concluded he would make more money selling oil drilled by others rather than drilling himself and, with the support of New York banker Arnold Schlaet he formed Texas Fuel in 1902. A few months later they changed the name to the Texas Company and began selling under the Texaco brand. Cullinan remained in control until 1916 when he was deposed by New York executives of the company.

In 1936 Standard of California (later Chevron) discovered more oil than it could sell in Saudi Arabia and so turned to the Texas Company to establish a joint venture called Caltex to sell the oil. In the 1930s the Texas Company expanded nationwide across the United States.

Renamed Texaco in 1959, the company flourished until the late 1970s when its own wells began to run out. In an effort to acquire more reserves in 1983 Texaco bid $8.6bn for Getty Oil, despite the fact that Getty had agreed a deal with Pennzoil. A Texas court later ruled that Texaco should pay Pennzoil $10.53bn in damages. As a result Texaco was forced to seek bankruptcy protection in 1987. The dispute with Pennzoil was eventually settled for $3bn but Texaco's weak state was made worse when corporate raider Carl Icahn bid for the company. Texaco had to sell off $7bn of assets to beat off Icahn's bid.

In 1989 Texaco did a deal with Saudi Arabia to form a joint venture called Star Enterprise, which linked up 60% of the company's US refining and marketing operations with Saudi Arabian cash and provided a steady supply of crude oil. The Gulf War, however, disrupted supplies and highlighted the company's weakness. In 1993 Texaco sold off its chemical operations and invested heavily in finding new oilfields in Russia, China and Colombia and in increasing outputs in the North Sea but as the oil industry consolidated it became clear that Texaco needed to merge with another major company in order to compete. A deal was struck with Chevron.

Chevron's history goes back to wildcatter Frederick Taylor, who struck oil in California in the 1870s. In 1879 he joined with other small operators to form Pacific Coast Oil in order to compete with John D. Rockefeller's Standard Oil in California. In 1900 Standard bought Pacific Coast.

When Standard Oil was broken up by the Supreme Court in 1911, the company's West Coast operations were lumped together in the Standard Oil Company of California . This was based in San Francisco.

The company quickly became known as Socal, but began marketing under the Chevron name.

In the 1930s it won important drilling concessions in Bahrain and Saudi Arabia and the wells were so succesful that Socal could not sell all its oil and formed Caltex - the California Texas Oil Company - with Texaco in order to cope. In 1948 Caltex sold 40% of its Saudi operations to Socony (later Mobil) and Jersey Standard (later Exxon) and the Saudi operations became known as the Arabian American Oil Company - Aramco.

Socal continued to explore in Louisiana and the Gulf of Mexico and in 1961 expanded its gas station empire by buying the Standard Oil Company of Kentucky.

After the oil crisis in 1973 Caltex lost most of its Saudi holdings to nationalisation and in 1980 Aramco was taken over by the Saudi government.

In 1984 Socal renamed itself Chevron and bought Gulf for $13.3bn, a move which doubled its reserves.

The Gulf Corporation had dated back to 1901 when J M Guffey Petroleum's Spindletop well in Texas came in. Guffey was soon ousted by his major backers, the Mellon family of Pittsburgh, and as a result the company name was changed to the Gulf Corporation in 1907. Gulf invested heavily in developing the oilfields of Kuwait but the company was weakened by the 1973 oil crisis and by claims of corruption in the Kuwaiti dealings.

The newly-named Chevron continued to buy up competition and in 1988 paid $2.5bn for Tenneco's oil and gas holdings in the Gulf of Mexico. The company then became a takeover victim with a bid from Pennzoil in 1992. This was fought off but Chevron had to give Pennzoil a number of its oil and gas fields as part of the settlement.

Chevron does not have a tradition of motor racing sponsorship but Gulf enjoyed a long and very successful period of sponsorship in sportscar racing. Gulf was involved with McLaren in F1 in the early days and then had a brief association with the Rondini team. In the 1980s Gulf's Italian subsidiary sponsored the Coloni team in Formula 3 with considerable success, notably with Ivan Capelli in 1983.

Texaco has had a long and successful tradition in motor racing. It sponsored Team Lotus in 1972 and 1973 before beginning a very successful period with McLaren between 1974 and 1978. After a brief period with Wolf in 1979 Texaco withdrew from F1 and developed a link with the Ford Motor Company's motorsport activities, notably in touring cars. When Ford joined forces with Stewart Grand Prix in 1997 Texaco returned to F1. The company has also had a long and successful sponsorship record in Indycar racing with Tom Sneva in the 1980s and from 1989 with Newman Haas Racing. In 2002 Chevron came in to back Newman Haas, a sponsorship which led to Cristiano da Matta winning the CART title that year.

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