ChevronTexaco Corp., which this week reported a huge drop in earnings for 2001 related to their merger, are set to go after either Phillips Petroleum Co. or Conoco Inc. to pick up assets that would boost production, according to an article in Wednesday’s Wall Street Journal. Phillips and Conoco announced their merger of equals last year, which would create the third largest integrated major in the United States and the sixth largest in the world (see Daily GPI, Nov. 20, 2001).

The Journal reported that ChevronTexaco’s board of directors was considering making an offer for one of the two companies on Wednesday, but on Tuesday night, was still unsure which major to pursue. If ChevronTexaco did pursue one of the two companies, however, another major would most likely make a bid for the other, including TotalFina Elf of France or Royal Dutch/Shell Group, said the newspaper.

A move by ChevronTexaco most likely would be done to raise its production levels and reduce some of its costs. Conoco has assets in Southeast Asia, where ChevronTexaco also has development. However, acquiring Phillips would open access in Alaska as well as other parts of the world.

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