White Plains, New York -- Texaco Inc. Chief Executive Peter Bijur said in February that he wasn't happy with the structure of the company's U.S. refining alliance with Shell Oil Co. and Saudi Refining Co.

Shell executives haven't been pleased either, as benefits fail to materialize and the alliance's two joint ventures, formed in 1998, struggle to compete against a pair of bigger rivals created by mergers, Exxon Mobil Corp. and BP Amoco Plc.

Chevron Corp.'s proposed buyout of Texaco, the third-biggest U.S. oil company, may offer Texaco a way out. To win regulatory approval of the $45 billion transaction, analysts expect Texaco will be forced to sell all or part of its stake in the refining ventures, Equilon Enterprises LLC and Motiva Enterprises LLC.

``Now the companies can blame the breakup of the alliances on regulators,'' said Fadel Gheit, an analyst at Fahnestock & Co. ``Getting bought is a way for Texaco to tell its partners, `I'm getting married so now we have to stop seeing each other.'''

Texaco's stakes in the ventures, plus the alliance's Equiva Trading Co. unit, are valued at $2 billion to $3 billion, analysts said. A sale would give San Francisco-based Chevron cash to pay down debt, Gheit said.

Texaco spokesman Andy Norman and Chevron's Bonnie Chaikind said the companies expect they will have to shed some operations, especially on the West Coast. Texaco, based in White Plains, New York, is in talks with Shell and Saudi Refining on asset sales, Norman said.

Neither Norman nor Chaikind would comment further. Shell spokeswoman Helen Bow declined to comment.

Texaco shares were unchanged at $58 on Friday. Chevron rose $1.56 to $81.06.

Cost Savings?

Texaco likely wouldn't miss the alliance, analysts said. While Norman said the partners met their goal of cutting annual costs by $800 million a year ahead of schedule, analysts say that claim is hard to prove.

``You can't really account for the cost savings,'' Gheit said. ``Both Shell and Texaco have different ways of accounting for certain costs and expenses.''

Shell, Texaco and Saudi Refining each own about a third of Motiva, which oversees their refineries and gasoline stations in the U.S. East and Gulf Coast regions.

Equilon unites Texaco and Shell refining operations in the West and Midwest. Texaco owns 44 percent. Houston-based Shell, the U.S. arm of Royal Dutch/Shell Group, holds the rest.

Earnings from refining have been dismal for most of the industry the past two years, first because a glut of oil made fuels such as gasoline and heating oil cheap. A steep rise in oil prices then made it expensive to make the fuels.

While profits improved the past two quarters, the alliance struggled last year. Equilon posted net income of $347 million on sales of $29.4 billion, while Motiva lost $69 million on sales of $12.2 billion.

Chevron alone had net income of $357 million from U.S. refining operations last year. A division, Chevron Products Co., runs the company's two California refineries and 7,900 U.S. gas stations.

Swapping Stakes

While Texaco and Shell have suggested that their alliance may be restructured, so far they have only made management changes and sold some assets, including the Wood River refinery in Illinois.

Last month, Shell said the ventures might shed 5 percent, or 1,150, of their 23,000 U.S. gas stations in the next five years.

Some analysts think Chevron could win approval of the Texaco buyout by selling Texaco's Equilon stake, or by swapping it for Shell's stake in Motiva.

``By doing that, you don't have to disclose the terms, so people don't have to go home embarrassed,'' Gheit said. ``Besides, the Saudis don't want anyone to know the value of their U.S. assets.''

A swap would allow Chevron to maintain Texaco's relationship with Saudi Arabia, which is considering ways to allow foreign companies to invest in its energy sector. Saudi Arabia holds the world's largest proven oil reserves and significant gas deposits.