SOME JAPAN OIL FIRMS MAY STOP TRADING WITH TEXACO
Japanese oil traders and refiners are
considering whether to suspend further business with Texaco Inc
<TX>, which yesterday filed for protection under Chapter 11 of
the U.S. Bankruptcy code, industry sources told Reuters.
    Texaco, the third biggest U.S. Oil company, said it filed
to protect itself from creditors while it fights a legal battle
with Pennzoil Co <PZL> over the purchase of Getty Petroleum
Corp <GTY> in 1984.
    Many Japanese trading houses decided to stop dealing with
Texaco several months ago as rumours it was about to file for
bankruptcy spread through the market, the sources said.
    "We haven't dealt with them for six months," said one
Japanese trader.
    Some Japanese trading houses with offices in the U.S. May
ask for letters of credit if they decide to continue trading
with Texaco, oil sources said.
    They said Texaco, which said its bankrupcty protection
measure will not affect the majority of its businesses, may
find industry reaction stronger than anticipated.
    "Texaco tried to buy substantial volumes of gasoline on the
U.S. Gulf on Friday but no one offered to them," one trading
house source said.
    One U.S. Major is reviewing its relationship with Texaco,
and an international oil trading company, while continuing
limited transactions with Texaco, will send its lawyers to meet
with the company tonight in New York, oil sources said.
    But one Japanese oil company, which holds several joint
venture oil exploration interests with Texaco, said business
would continue as usual pending the outcome of the dispute, a
company spokesman said.
 REUTER
