Shell Oil Co. will spend more than $500 million to convert about 13,000 Texaco stations to Shell outlets, the company said Thursday. Shell and Saudi Refining Inc. agreed to buy the stations as well as eight refineries and numerous pipelines and storage terminals from ChevronTexaco Corp. in December for $3.86 billion.
ChevronTexaco got the assets when Chevron Corp. purchased Texaco Inc. in October for $45.8 billion. The U.S. Federal Trade Commission required the sale for the merger to be completed.
Shell said it would save $400 million in costs by 2004 from the purchase, partly by cutting 1,200 jobs. Once the re-branding is complete, Shell will control 22,000 U.S. stations, selling one in every six gallons of gasoline.
"We're not just converting from another brand to Shell," said Russell Caplan, who will serve as vp of retail for both U.S. Shell affiliates – Equilon Enterprises LLC, which will become Shell Oil Products U.S., and Motiva Enterprises LLC. "This is a very dynamic time with considerable momentum surrounding the Shell brand, our retailers, wholesalers and customers."
Shell Oil Products U.S. and Motiva will have exclusive rights to the Texaco name for use at retail gasoline stations through June 2004 and then on a non-exclusive basis until June, 2006. Concerning the lubricants portion of the business, Shell will have non-exclusive use of Texaco-branded lubricants for 18 months after the transaction is closed.
