Business Notes OIL

Long the world's leading exporter of crude, Saudi Arabia now wants more of the profits its oil generates -- from the ground to the gas tank. The Saudi government has agreed to pay $1.2 billion for a 50% interest in Texaco's refining and marketing operations in 23 U.S. states, mostly in the East. If the deal is approved by both governments and Texaco's shareholders, it would represent the largest Arab investment in the U.S. oil industry.

The Saudi money would reduce Texaco's $10.4 billion debt and perhaps help ward off a takeover by Carl Icahn. In fact, the proposed pact was made public the day before Texaco stockholders met to vote on Icahn's bid to win five seats on its 14-member board, a crucial step toward a takeover. Counting of the ballots will not be finished for several weeks, but Icahn says he would not mind sharing Texaco with the Saudis.