Texaco Aims to Regain Star Status in U.S.

Odd as it sounds, the U.S. arm of ChevronTexaco Corp. is getting back into the business of Texaco.

The Texaco brand of gasoline had withered in the U.S. market since 2001, when Chevron Corp. bought Texaco Inc. for $39 billion.

To get their merger cleared by antitrust authorities, the companies sold exclusive rights to the Texaco brand for three years to a group led by the Shell division of Royal Dutch/Shell Group.

There were about 12,800 Texaco stations in the U.S. at the time, including more than 700 in California. Most were converted to Shell stations over the next three years, and Texaco was poised to disappear from the U.S. market.

But San Ramon, Calif.-based ChevronTexaco regained the U.S. rights to Texaco last year, and it's bringing back the brand.

"Texaco still has incredible strength and awareness out there," said Danny Roden, head of ChevronTexaco's North American marketing operations. "Our strategy is to maximize that benefit."

It has already converted nearly 1,200 gas stations in the East and South to carry the Texaco banner. ChevronTexaco also plans to add 300 Texaco stations in eight Western states by year's end, including about 75 in California.

The oil giant is convinced that the Texaco name still attracts loyalty, even in a commodity business such as gasoline. ChevronTexaco said that was evident overseas, where ChevronTexaco has continued to supply about 9,000 Texaco stations.

The company also plans to issue dual-branded credit cards that holders can use at either Chevron or Texaco stations, which would give Texaco an immediate base of 7 million potential customers nationwide.

In California, Chevron has 17.9% of the gasoline market, second only to BP's Arco brand with 18.7%, according to Pacific West Oil Data, a monthly analytical report published by Economic Insight Inc. Shell has 14.5% of the California market.

Some analysts also believed that the Texaco brand still had value. "With the right visibility, advertising and support, they can build a good story and resurrect it," said Alan Siegel, chairman of Siegel & Gale, a New York consultant on corporate branding.

Shell still supplies about 2,700 Texaco stations around the country, said spokesman Cameron Smyth, who otherwise declined to comment on ChevronTexaco's efforts.

ChevronTexaco says its consumer surveys show that Texaco's once widespread presence and its catchy advertising over the several decades still resonate with motorists.