Shell Game

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Shell Game

07/26/2002
SEATTLE -- Shell Oil Products US announced plans to convert about 300 Texaco stations in the Seattle area to its prototype U.S. Shell brand.

The move involves converting signs on pumps, buildings and canopies and mailing Shell credit cards to about 223,000 Texaco customers in the Seattle market, according to the Seattle Post-Intelligencer. Shell detailed its U.S. retailing strategy in the June 17 issue of Convenience Store News.

The conversions are expected to take about six months.

A Shell spokesman said the plan covers company-owned stations and independent dealers operating under the Texaco brand. But the announcement leaves unresolved a dispute involving about 100 independent operators in Washington. Half of them are questioning the terms of contracts Shell wants them to sign and are seeking more information about the possible penalties or fees should they decide to switch to another brand. The other half haven't been offered contracts by Shell, but also are faced with the possibility of penalties should they switch now.

The Texaco-to-Shell switch results from the merger of Chevron and Texaco, a deal that was completed last year. Shell and Texaco previously had combined their Western refining and marketing operations into a partnership called Equilon. As a condition of regulatory approval of the Chevron-Texaco combination, Texaco's refining and marketing operations were put up for sale. Shell bought Texaco's share of Equilon, which included a refinery at Anacortes, the report said.

Shell has an exclusive right to the Texaco brand until 2004 and a non-exclusive right until 2006.