George Keller; started deal that created Chevron

GEORGE M. KELLER (Associated Press/File 1980)

NEW YORK - George M. Keller, who as chairman of the Standard Oil Co. of California in the 1980s executed what was then the largest corporate takeover - a deal in which it swallowed Gulf Oil to form an even bigger oil company, Chevron - died Friday in Palo Alto, Calif. He was 84.

The cause was complications of orthopedic surgery, said his daughter-in-law Emma Gilbey Keller.

On the evening of March 4, 1984, Mr. Keller went alone to his suite in a Pittsburgh hotel to decide what to wager for Gulf Oil. He had said that Standard Oil would not join a wave of oil company mergers then roiling the industry, contending that it could acquire oil reserves more efficiently by drilling.

But Gulf Oil was fighting a hostile takeover by T. Boone Pickens, and as Mr. Keller recalled in an interview in Fortune magazine, Gulf's chairman, James E. Lee, had summoned him to Gulf's headquarters in Pittsburgh with what amounted to a one-word message: "Help!"

What persuaded Mr. Keller to bid for Gulf was not the camaraderie of industry leaders, but a minute examination of Gulf's books by Standard Oil analysts. Mr. Keller sifted through their work and came up with a price of $79 a share. The next morning, at the last minute, he raised the offer to $80. The extra dollar was the winning edge in an acquisition costing $13.3 billion.

In the Fortune interview, Mr. Keller allowed that the move had been "a little glandular." Time magazine deemed this fitting: "Its elements of cold calculation, high risk and individual daring made the move seem entirely characteristic of the oil industry, which has always rewarded the nervy gambler."

Three years later, Mr. Keller told Fortune the takeover had succeeded because it doubled Chevron's oil reserves, with much of the bill being paid by selling some Gulf assets. Industry analysts agreed, although some pointed out that the company had to wrestle with a tremendous debt load for several years.

Gregarious but also studious, Mr. Keller was known as a deft juggler of often conflicting constituencies, including shareholders, public interest groups, investment bankers, and journalists.

Strongly opinionated, he was also willing to buck his own industry. In the mid-1980s, he recommended, unsuccessfully, that the federal government set a price for oil high enough to jump-start a stagnant drilling industry, a position that defied long-held oil patch sentiment against any government intervention in pricing.

And unlike many oil chieftains, Mr. Keller was accessible to journalists. "If you wanted to get him on the phone, all you had to do was call him," said Roz Liston, who covered energy for United Press International.

George Matthew Keller was born in Kansas City, Mo. His mother died when he was in the first grade, and an aunt nurtured his passion for science. At age 10, at the DuPont exhibit at the Chicago World's Fair of 1933, he became mesmerized by chemistry.

He enrolled in the Massachusetts Institute of Technology, then joined the military as a sophomore, serving as an Army Air Forces meteorologist in Labrador. He returned to MIT and, after marrying in 1946 and graduating in 1948, received four oil-company job offers. He asked his wife, Adelaide McCague, to choose among them. She picked Standard Oil, based in San Francisco. She died last year.

Mr. Keller began at Standard Oil by designing refineries, and though he had initially hoped to be assigned to research, he climbed steadily through the corporate ranks. One job was overseeing operations in Saudi Arabia, where in 1938 the company had discovered the first oil there. A replica of Muhammad's sword, a Saudi gift, hung on his wall.

After becoming chairman in 1981, Mr. Keller quickly demonstrated both an informal management style - preferring to gather information in hallway conversations rather than in formal meetings - and a risk-taking executive approach. At his first board meeting, he approved a $600 million bid for offshore leases that led to the discovery of an oil field containing an estimated 300 million barrels.

Chevron, as the company was named after the merger, was criticized in the 1980s for doing business with Angola's Marxist government. Mr. Keller answered that if Chevron left the country, other companies would gladly fill the vacuum. Protesters nonetheless distributed "wanted" posters of Mr. Keller.

In an interview with UPI, Mr. Keller at one point expressed regret at "the remoteness" of the chairman's job. And his wife, who was known as Addie, was unimpressed with the corporate stratosphere. After dining with Queen Elizabeth II on the Royal Yacht Britannia in 1983, she was heard to say, "You know, that's the first time I've been glad George was chairman."

Mr. Keller, a rabid fan of the San Francisco 49ers, said the royal dinner party was the best thing since the 1982 Super Bowl.

He leaves three sons, Bill, of New York, who is the executive editor of The New York Times; Bob, of Denver; and Barry, of Granite Bay, Calif.; and six grandchildren.