CHEVRON MAY SHED $4 BILLION IN ASSETS

02.08.2003 [12:32]
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ChevronTexaco Corp., the second-largest U.S. oil company, probably will announce today asset sales of as much as $4 billion to reduce debt and a write down of its Caltex refining unit, analysts and investors said.

Chief Executive Dave O'Reilly will outline plans to sell properties from Canada to Cambodia at a meeting in New York, after the San Ramon-based company reports second-quarter profit that probably quadrupled because of rising energy prices, investors said.

The asset purge will be triggered by the expiration in October of a two-year ban on major transactions since the merger of Chevron Corp. and Texaco Inc. in 2001. The company must shed assets with low profit margins to improve last year's return on capital of 2.7 percent, investors said. Exxon Mobil Corp. and Royal Dutch/Shell Group had almost 14 percent.

"At least 50 percent of what they're going to sell will be in the U.S.," said Fadel Gheit, an analyst at Fahnestock & Co., who rates ChevronTexaco "buy" and owns shares of the company.

Some North Sea assets may be sold or holdings reduced in one or all of the following countries: China, Denmark, Norway, Western Canada, Colombia, Brazil, Cambodia, Bangladesh and Azerbaijan.

Proceeds from asset sales may be used to reduce debt, buy back the company's stock, make acquisitions or form joint ventures, according to analysts and investors.

CHEVRON MAY SHED $4 BILLION IN ASSETS

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