ChevronTexaco Expects Larger Merger Savings

ChevronTexaco Corp., the second-biggest U.S. oil company, said it expects an additional $400 million in savings from the merger of Chevron Corp. and Texaco Inc. by April, up 22% from earlier estimates.

The San Francisco-based company increased the annual savings target to $2.2 billion and said it expects to meet the previous goal of cutting $1.8 billion in costs by October.

In a presentation to analysts in New York, ChevronTexaco Chief Executive David O’Reilly and other company executives outlined plans to reduce worldwide refining and marketing costs by as much as $700 million next year. The company also plans to boost annual production and return on capital by as much as 3%.

The company was formed in October through the $45.8-billion merger of Chevron and Texaco. O’Reilly said at the time that he expected annual savings of $1.2 billion from the deal.

Since then, ChevronTexaco has announced plans to cut 4,500 jobs and has sold its stake in Texaco’s U.S. refineries and gas stations.

Shares of ChevronTexaco fell $1.83 to $86.60 on the New York Stock Exchange.