================================================================================

                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON D.C. 20549


                                   ----------

                                    FORM 8-K



                                 CURRENT REPORT
                       Pursuant to Section 13 or 15 (d) of
                       the Securities Exchange Act of 1934



                Date of Report (Date of earliest event reported):
                                  July 16, 1997

                                   ----------

                                   TEXACO INC.
             (Exact name of registrant as specified in its charter)



             Delaware                      1-27                 74-1383447
(State or other jurisdiction of       (Commission File       (I.R.S. Employer
           incorporation)                  Number)        Identification Number)



      2000 Westchester Avenue,                                      10650
       White Plains, New York                                     (Zip Code)
(Address of principal executive offices)

                                 (914) 253-4000

              (Registrant's telephone number, including area code)



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Item 5. Other Events
- --------------------

1.       On July 16, 1997,  the  Registrant  announced that it, Saudi Aramco and
         Shell Oil Company signed a memorandum of understanding to combine their
         Eastern and Gulf Coast U.S. refining and marketing businesses.  The new
         company  will  continue  to market  gasoline  under both the Texaco and
         Shell brands  through the  thousands  of  independent  wholesalers  and
         retailers   who  bring  the  products  to  the   consumer.   Currently,
         Texaco-branded  products are marketed in this  geographic  area by Star
         Enterprise,  a 50/50 joint venture  between  subsidiaries of Texaco and
         Saudi Aramco.

         Under the terms of the memorandum of  understanding,  Texaco, Shell and
         Saudi Refining, Inc. a corporate affiliate of Saudi Aramco, will form a
         limited  liability  company  comprising  their  Eastern  and Gulf Coast
         refining and  marketing  businesses.  The initial  ownership of the new
         venture will be 35 percent Shell,  32.5 percent Texaco and 32.5 percent
         Saudi  Refining,  Inc.  The  percentages  may be adjusted in the future
         according  to  the  performance  of the  assets.  Until  completion  of
         regulatory   review   and   definitive  agreements,  all  Texaco,  Star
         Enterprise  and  Shell  downstream  operations will continue to operate
         separately.

         On July  16,  1997,  the  Registrant  issued a Press  Release  entitled
         "Shell,   Texaco  and  Saudi   Refining,   Inc.   Sign   Memorandum  of
         Understanding  To Combine Eastern and Gulf Coast Refining and Marketing
         Operations,"  a copy of which is  attached  hereto as Exhibit  99.1 and
         made a part hereof.

Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
- --------------------------------------------------------------------------

(c)      Exhibits

   99.1  Press Release  issued  by  Texaco  Inc.  dated July 16, 1997,  entitled
         "Shell,   Texaco   and   Saudi   Refining,   Inc.  Sign  Memorandum  of
         Understanding   To  Combine   Eastern   and  Gulf Coast   Refining  and
         Marketing Operations".

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PR8knov14.doc








                                   SIGNATURES




Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.








                                                                  TEXACO INC.
                                                           ---------------------
                                                                 (Registrant)





                                                       By:     Robert E. Koch
                                                           ---------------------
                                                           (Assistant Secretary)






Date: July 17, 1997
- -------------------
                                                                    EXHIBIT 99.1


            SHELL, TEXACO AND SAUDI REFINING, INC. SIGN MEMORANDUM OF
            ---------------------------------------------------------
          UNDERSTANDING TO COMBINE EASTERN AND GULF COAST REFINING AND
          ------------------------------------------------------------
                              MARKETING OPERATIONS
                              --------------------

FOR  IMMEDIATE  RELEASE:   WEDNESDAY,   JULY  16,  1997.
- -------------------------------------------------------
         WHITE PLAINS, N.Y.,  July 16  -  Saudi Aramco,  Shell Oil Company, and 
Texaco Inc.  today  announced  the signing of a memorandum of  understanding  to
combine their Eastern and Gulf Coast U.S. refining and marketing businesses.
         The new company will continue to market  gasoline under both the Texaco
and Shell brands through the thousands of independent  wholesalers and retailers
who bring the products to the consumer.  Currently,  Texaco-branded products are
marketed in this  geographic  area by Star  Enterprise,  a 50/50  joint  venture
between subsidiaries of Texaco and Saudi Aramco.
         The signing of  this memorandum of  understanding  follows  the  recent
announcement of a similar  agreement between  Shell Oil  Company and Texaco Inc.
to combine  the major  elements of their  Midwestern  and Western  U.S. refining
and  marketing  activities  and  their  total  U.S.  transportation, trading and
lubricants businesses.
         In a joint statement Saudi Aramco President and CEO Abdallah S. Jum'ah,
Shell Oil Company  President and CEO Philip J. Carroll,  and Texaco Chairman and
CEO Peter I. Bijur said, "We believe this  combination  of the three  companies'
assets will allow us to accomplish  fundamental change in the way we operate our
downstream  businesses leading to improved  performance and growth. The alliance
will create new  opportunities  for our  customers,  employees,  vendors and the
communities in which we work and live."
         Under  the  terms of the  memorandum  of  understanding  signed  today,
Texaco, Shell, and Saudi Refining,  Inc., a corporate affiliate of Saudi Aramco,
will form a limited  liability  company  comprising their Eastern and Gulf Coast
refining and marketing businesses. The initial ownership of the new venture will
be 35 percent Shell,  32 1/2 percent  Texaco and 32 1/2 percent Saudi  Refining,
Inc. The percentages may be adjusted in the future  according to the performance
of the assets.

                                    - more -






                                      - 2 -


         For  several  years,   the  industry  has  faced   difficult   business
conditions.  Meeting the challenge of this new competitive  environment requires
changing the way refining and marketing  companies operate in the United States.
The  parties  expect  the  new  company  to  be  able  to  achieve   substantial
efficiencies  largely by adopting best  practices of the parent  companies,  and
from shared management systems, business processes and support functions.  These
savings  are not based  upon  closure of  refineries  or other  major  operating
facilities.  However, future decisions regarding the new company will be made on
the basis of achieving the objectives of the business plan.
         Until completion of regulatory  review and definitive  agreements,  all
Texaco, Star Enterprise and Shell downstream operations will continue to operate
separately.
         The exploration,  production and chemical businesses of these companies
are not included in the new company.
         Shell Oil Company is a Houston-based affiliate of the Royal Dutch/Shell
Group of Companies.  Texaco Inc. is based in White Plains, N.Y.  Saudi Aramco is
the state-owned oil company of the kingdom of Saudi Arabia.  The company's  U.S.
corporate affiliate Saudi Refining, Inc. is based in Houston.


                                     - xxx -



For more information contact:  Shell Oil Company
                               Kitty Borah, Stacy Hutchinson        713-241-4544

                               Texaco
                               Maripat Sexton                       713-752-6461
                               Jim Swords                           914-253-4156
                               Cynthia Michener                     914-253-4743

                               Saudi Refining, Inc.
                               Henry Hayes                        (713) 432-4149
                               Bill Tracy                         (713) 432-4645

NOTE TO  EDITORS:  The attached fact sheet identifies operations included in the
                   new company.


Additional  Texaco  and Shell information is available on the World Wide Web at:
http://www.texaco.com
http://www.shellus.com






TOTAL ASSETS OF NEW COMPANY FACT SHEET SHELL STAR ENTERPRISE COMBINED COMPANY - --------------------------------------------------------------------------------------------------------------------- Shell Eastern Refineries Star Enterprise Refineries Refineries - --------------------------------------------------------------------------------------------------------------------- Convent, La. Convent, La. Capacity: 230,000 BPD Capacity: 230,000 BPD - --------------------------------------------------------------------------------------------------------------------- Norco, La Norco, La Capacity: 218,000 BPD Capacity: 218,000 BPD - --------------------------------------------------------------------------------------------------------------------- Delaware City, Del. Delaware City, Del. Capacity: 140,000 BPD Capacity: 140,000 BPD - --------------------------------------------------------------------------------------------------------------------- Port Arthur, Texas Port Arthur, Texas Capacity: 235,000 BPD Capacity: 235,000 BPD - --------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------- Total Shell Eastern Capacity: Total Star Enterprise Capacity: 605,000 Total Capacity: 823,000 BPD 218,000 BPD BPD - --------------------------------------------------------------------------------------------------------------------- Shell Eastern Percent of U.S. Star Enterprise Percent of U.S. Capacity: Capacity: 1.4% 3.9% - --------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------- Terminals Terminals Terminals - --------------------------------------------------------------------------------------------------------------------- 17 products/crude terminals 33 products terminals (own or have 50 products terminals (own or (own or have partial interest) partial interest) have partial interest) - --------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------- Retail Marketing Retail Marketing Retail Marketing - --------------------------------------------------------------------------------------------------------------------- Approximately 4,973 Approximately 9,744 Texaco-branded Approximately 14,717 Texaco and Shell-branded outlets in 23 outlets in 26 states. Shell-branded outlets in 26 states. eastern states. - --------------------------------------------------------------------------------------------------------------------- Shell Eastern percent of Star Enterprise percent of marketshare: marketshare: 3.6% (nationwide) 4% (nationwide) - ---------------------------------------------------------------------------------------------------------------------
SOURCE: Oil & Gas Journal