Specifically, Mr. Miller said, the two companies have enormous similarities in their domestic refining and marketing businesses.

Saudi Arabia reserves about 1.5 million barrels a day for home consumption and domestic refining.

Profits in domestic refining and marketing fell to $39 million from $99 million, although gasoline sales rose 5 percent.

The company reported third-quarter profits from domestic refining and marketing operations of a scant $7 million, down from $106 million a year ago.

The companies acted on this premonition in last week's proposal: Texaco will sell all its domestic refining and gasoline-selling assets.

Profits from domestic refining and marketing soared to $370 million, the highest in the company's history, compared with $103 million in the period last year.

Also, 700 positions in the company's domestic refining and marketing operations are to be eliminated.

The domestic refining and marketing unit lost $53 million in the quarter, compared with a profit of $130 million a year ago.

And earnings from the domestic refining and marketing operations increased to $101 million, from $2 million in the quarter last year.

It will be the largest single addition of new capacity in domestic refining in two decades.