TEXACO <TX> SAYS SOME OIL FLOWS RE-ESTABLISHED
  Texaco Inc has re-established some key
  oil supply lines following yesterday's court filing for
  protection under Chapter 11 of the U.S. bankrupcty code, said
  Elton Yates, Texaco's coordinator of worldwide operations.
      "Several companies say they are willing to start trading,"
  Yates told Reuters in an interview.
      The company last week had stated that a number of domestic
  and international oil suppliers were demanding cash for oil
  shipments, and in some cases, had cut supplies altogether.
  Banks had also cut credit lines, it said in court filings.
      Manufacturers Hanover Corp <MHC> and other banks told
  Texaco it would cut off a one billion dlr credit line, Texaco
  said in the court filing. Chase Manhattan Corp <CMB> and J.P.
  Morgan Co's <JPM> Morgan Guaranty Trust Co asked for deposits
  to cover transactions, it said.
      The severe conditions with suppliers and creditors arose
  from an unfavorable ruling last Monday by the U.S. Supreme
  Court in Texaco's ongoing dispute with Pennzoil Co <PZL> over
  the acquisition of Getty Oil Co in 1984.
      The High Court said Texas Courts must consider Texaco's
  plea to cut its 10.3 billion dlr bond while appealing the case.
      "Most of the suppliers stayed with us as long as they
  could," Elton said. But following Monday's Supreme Court
  ruling, Texaco's suppliers began demanding cash and halting
  supplies.
      "It wasn't until last Wednesday that it turned into an
  avalanche," he said. "Supplies were cut to the point where we
  could not run the system at anywhere near capacity."
      He said less than half of Texaco's oil supplies had been in
  jeapordy, but the cut off would have produced severe shortages
  by mid-May. Now the situation appears much less severe, Elton
  said.
      It said that Sonatrach, the Algerian national oil company,
  canceled future deliveries of crude oil and natural gas,
  Occidental Petroleum Co <OXY> demanded cash for crude, and
  Atlantic Richfield Co <ARC> asked for special safeguards.
      The company also said British Petroleum Co PLC <BP> last
  week refused to accept an order for fuel oil. But Yates today
  said, "a big U.K. company has in fact said they would go on
  supplying. They had cancelled last week."
      He declined to identify the company.
      <Petroleos de Venezuela S.A.>, the Venezuelan state oil
  company that supplies a large portion of Texaco's oil, also
  halted shipments two weeks ago, Yates said.
      But he added that Texaco expected to meet with the
  Venezuelans later today in an attempt to reestablish that key
  supply line. Talks were also expected to take place with the
  Algerians, he added.
      Bankruptcy specialists said it was likely Texaco's chapter
  11 filing would allow the company to secure its credit lines
  and oil supplies that are key to the company's business.
      "It will be business as usual for Texaco," said Martin
  Klein, a bankruptcy attorney at the New York law firm Dreyer
  and Traub.
      "Creditors are a nervous bunch of people," he said. "But
  when the dust settles they will reevaluate the situation and
  will likely extend credit to the chapter 11 company."
      But other officials at Texaco were not immediately
  available to say whether discussions were being held with its
  banks, or whether credit lines had been reestablished.