ChevronTexaco overhauls PR in post-merger review

SAN FRANCISCO: Last month's merger of oil giants Chevron and Texaco

has sparked a sweeping review of all its supplier contracts - including

its PR business.

The company is scrutinizing its relationships with everything from

office supplies to advertising. "What our procurement people are doing

is going out in all directions," said company spokesman Fred Gorell.

In late November, Chevron-Texaco announced "higher post-merger synergy

goals," increasing expected cost savings from $1.2 billion to

$1.8 billion, and staff cuts from 4,000 to 4,500. As part of

this, all of the three merged entities - Chevron, Texaco, and their

Caltex joint venture - are reviewing their vendors.

What this review means for PR is unclear, since Gorell - a former

Chevron employee - would not discuss which agencies Chevron and Texaco

had been working with prior to the merger.

Other sources, however, confirmed that Texaco has a long-standing

relationship with Robinson, Lerer & Montgomery. Joele Frank, Wilkinson

Brimmer Katcher assisted Chevron with the merger plan announcement in

October 2000. The largest firm involved is Burson-Marsteller, which

worked with Texaco on merger-related issues. Chevron appears to have

handled most PR in-house.

Chevron clearly emerged as the dominant company in the merger. The new

organization occupies Chevron's San Francisco headquarters, and its

chairman and CEO, David O'Reilly, assumed the same positions with


However, Texaco VP Rosemary Moore has been made public and government

affairs VP for ChevronTexaco, reporting to Greg Matiuk, EVP of

administration and corporate services. And former Chevron exec Pierre

Breber manages IR under the CFO's chain of command.

The merger, which was announced on October 16 as O'Reilly and Texaco

chairman and CEO Peter Bijur shook hands on the deal, made ChevronTexaco

a $100-billion concern, and the nation's second-largest oil

company behind ExxonMobil.

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