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.