================================================================================

                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q


                                   ----------

               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended March 31, 1998        Commission file number 1-27


                                   TEXACO INC.
           (Exact name of the registrant as specified in its charter)


        Delaware                                                74-1383447
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                              Identification No.)


       2000 Westchester Avenue
        White Plains, New York                                     10650
(Address of principal executive offices)                         (Zip Code)



        Registrant's telephone number, including area code (914) 253-4000


                                   ----------


     Texaco Inc. (1) HAS FILED all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and
(2) HAS BEEN subject to such filing requirements for the past 90 days.

     As of April 30, 1998, there were outstanding  541,115,315  shares of Texaco
Inc. Common Stock - par value $3.125.

================================================================================

<PAGE>

<TABLE>
<CAPTION>
                                          PART I - FINANCIAL INFORMATION

                                       TEXACO INC. AND SUBSIDIARY COMPANIES
                                         STATEMENT OF CONSOLIDATED INCOME
                                FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
                                --------------------------------------------------
                                      (Millions of dollars, except as noted)

                                                                                        (Unaudited)
                                                                                   --------------------
                                                                                   For the three months
                                                                                      ended March 31,
                                                                                   --------------------
                                                                                   1998              1997
                                                                                   ----              ----
<S>                                                                             <C>                <C>    
         REVENUES
              Sales and services                                                $  7,922           $11,813
              Equity in income of affiliates,
                  interest,  asset sales and other                                   225               216
                                                                                --------           -------
                                                                                   8,147            12,029
                                                                                --------           -------
         DEDUCTIONS
              Purchases and other costs                                            6,114             9,298
              Operating expenses                                                     580               781
              Selling, general and administrative expenses                           276               419
              Exploratory expenses                                                   141                99
              Depreciation, depletion and amortization                               388               385
              Interest expense                                                       118               101
              Taxes other than income taxes                                          116               139
              Minority interest                                                       15                21
                                                                                --------           -------
                                                                                   7,748            11,243
                                                                                --------           -------

         Income before income taxes                                                  399               786

         Provision for (benefit from) income taxes                                   140              (194)
                                                                                --------           -------


         NET INCOME                                                             $    259           $   980
                                                                                ========           =======

         Preferred stock dividend requirements                                  $     14           $    14
                                                                                --------           -------

         Net income available for common stock                                  $    245           $   966
                                                                                ========           =======

         Per common share (dollars)
              Basic net income                                                  $    .46           $  1.86
              Diluted net income                                                $    .46           $  1.80

              Cash dividends paid                                               $    .45           $  .425

         Average shares outstanding for computation of
              earnings per share (thousands)
              Basic                                                              531,914           519,282
              Diluted                                                            551,421           540,063


<FN>
                         See   accompanying    notes   to   consolidated financial statements.
</FN>
</TABLE>










                                      - 1 -

<PAGE>

<TABLE>
<CAPTION>
                      TEXACO INC. AND SUBSIDIARY COMPANIES
                           CONSOLIDATED BALANCE SHEET
                   AS OF MARCH 31, 1998 AND DECEMBER 31, 1997
                   ------------------------------------------
                              (Millions of dollars)
                                                                                         March 31,                December 31,
                                                                                           1998                       1997
                                                                                        -----------               ------------
                                                                                        (Unaudited)
                                                                                        -----------
<S>                                                                                          <C>                    <C>    
ASSETS
   Current Assets
      Cash and cash equivalents                                                              $   335                $   311
      Short-term investments - at fair value                                                      86                     84
      Accounts and notes receivable, less allowance for doubtful
           accounts of  $20 million in 1998 and $22 million in 1997                            4,021                  4,230
      Inventories                                                                              1,160                  1,483
      Deferred income taxes and other current assets                                             290                    324
                                                                                             -------                -------
           Total current assets                                                                5,892                  6,432

   Investments and Advances                                                                    7,574                  5,097

   Properties, Plant and Equipment - at cost                                                  34,821                 38,956
   Less - accumulated depreciation, depletion and amortization                                20,226                 21,840
                                                                                             -------                -------
      Net properties, plant and equipment                                                     14,595                 17,116

        Deferred Charges                                                                         810                    955
                                                                                             -------                -------

           Total                                                                             $28,871                $29,600
                                                                                             =======                =======
      
LIABILITIES AND STOCKHOLDERS' EQUITY
   Current Liabilities
      Short-term debt                                                                        $   889                $   885
      Accounts payable and accrued liabilities
           Trade liabilities                                                                   1,946                  2,669
           Accrued liabilities                                                                 1,195                  1,480
      Estimated income and other taxes                                                           899                    960
                                                                                             -------                -------
           Total current liabilities                                                           4,929                  5,994

   Long-Term Debt and Capital Lease Obligations                                                5,927                  5,507
   Deferred Income Taxes                                                                       1,846                  1,825
   Employee Retirement Benefits                                                                1,213                  1,224
   Deferred Credits and Other Noncurrent Liabilities                                           1,572                  1,639
   Minority Interest in Subsidiary Companies                                                     652                    645
                                                                                             -------                -------
           Total                                                                              16,139                 16,834
   Stockholders' Equity
      Market Auction Preferred Shares                                                            300                    300
      ESOP Convertible Preferred Stock                                                           448                    457
      Unearned employee compensation and benefit plan trust                                     (372)                  (389)
      Common stock (authorized: 700,000,000 shares, $3.125 par
           value; 567,606,290 shares issued)                                                   1,774                  1,774
      Paid-in capital in excess of par value                                                   1,682                  1,688
      Retained earnings                                                                       10,002                  9,987
      Other accumulated nonowner changes in equity
         Currency translation adjustment                                                        (107)                  (105)
         Minimum pension liability adjustment                                                    (14)                   (16)
         Unrealized net gain on investments                                                       31                     26
                                                                                             -------                -------
           Total other accumulated nonowner changes in equity                                    (90)                   (95)
                                                                                             -------                -------
                                                                                              13,744                 13,722
      Less - Common stock held in treasury, at cost                                            1,012                    956
                                                                                             -------                -------
         Total stockholders' equity                                                           12,732                 12,766
                                                                                             -------                -------
           Total                                                                             $28,871                $29,600
                                                                                             =======                =======

<FN>
                      See accompanying  notes to consolidated  financial statements.
</FN>
</TABLE>

                                       -2-
<PAGE>

<TABLE>
<CAPTION>
                      TEXACO INC. AND SUBSIDIARY COMPANIES
                 CONDENSED STATEMENT OF CONSOLIDATED CASH FLOWS
               FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
               --------------------------------------------------
                              (Millions of dollars)
                                                                                                     (Unaudited)
                                                                                                --------------------
                                                                                                For the three months
                                                                                                   ended March 31,
                                                                                                --------------------
                                                                                              1998               1997
                                                                                              ----               ----
<S>                                                                                           <C>                <C>  
OPERATING ACTIVITIES
   Net income                                                                                 $ 259              $ 980
   Reconciliation to net cash provided by (used in)
      operating activities
         Receivable for refund of IRS deposits                                                    -               (700)
         Depreciation, depletion and amortization                                               388                385
         Deferred income taxes                                                                   56                100
         Exploratory expenses                                                                   141                 99
         Minority interest in net income                                                         15                 21
         Dividends from affiliates, less than equity
            in income                                                                          (130)               (40)
         Gains on asset sales                                                                    (5)               (19)
         Changes in operating working capital                                                  (242)               257
         Other - net                                                                            175                (49)
                                                                                              -----              -----
            Net cash provided by operating activities                                           657              1,034

INVESTING ACTIVITIES
   Capital and exploratory expenditures                                                        (784)              (678)
   Proceeds from asset sales                                                                     42                140
   Purchases of investment instruments                                                         (256)              (349)
   Sales/maturities of investment instruments                                                   247                389
   Other - net                                                                                    -                (57)
                                                                                              -----              -----
            Net cash used in investing activities                                              (751)              (555)

FINANCING ACTIVITIES
   Borrowings having original terms in excess
      of three months
         Proceeds                                                                               396                150
         Repayments                                                                            (277)               (75)
   Net increase (decrease) in other borrowings                                                  363               (174)
   Purchases of common stock                                                                   (105)               (31)
   Dividends paid to the company's stockholders
      Common                                                                                   (239)              (221)
      Preferred                                                                                  (5)                (4)
   Dividends paid to minority shareholders                                                       (9)               (10)
                                                                                              -----              -----
            Net cash provided by (used in) financing activities                                 124               (365)

CASH AND CASH EQUIVALENTS
   Effect of exchange rate changes                                                               (6)                (6)
                                                                                              -----              -----
   Increase during period                                                                        24                108
   Beginning of year                                                                            311                511
                                                                                              -----              -----
   End of period                                                                              $ 335              $ 619
                                                                                              =====              =====






<FN>
                           See  accompanying  notes  to  consolidated  financial statements.
</FN>
</TABLE>

                                       -3-
<PAGE>

<TABLE>
<CAPTION>
                      TEXACO INC. AND SUBSIDIARY COMPANIES
          CONDENSED STATEMENT OF CONSOLIDATED NONOWNER CHANGES IN EQUITY
               FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
               --------------------------------------------------
                              (Millions of dollars)
                                                                                                     (Unaudited)
                                                                                                --------------------
                                                                                                For the three months
                                                                                                   ended March 31,
                                                                                                --------------------
                                                                                              1998               1997
                                                                                              ----               ----

<S>                                                                                            <C>                <C> 
   NET INCOME                                                                                  $259               $980
   Other nonowner changes in equity (net of tax)
      Currency translation adjustment                                                            (2)               (30)
      Minimum pension liability adjustment                                                        2                  -
      Unrealized net gain (loss) on investments                                                   5                (11)
                                                                                               ----               ----
                                                                                                  5                (41)
                                                                                               ----               ----
   TOTAL NONOWNER CHANGES IN EQUITY                                                            $264               $939
                                                                                               ====               ====
</TABLE>


                      TEXACO INC. AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------

Note 1. Formation of Equilon Enterprises LLC
--------------------------------------------

On January 15,  1998,  Texaco and Shell Oil  Company  reached  agreement  on the
formation  and  operational  start up,  effective  January 1,  1998,  of Equilon
Enterprises LLC (Equilon),  a Delaware limited liability  company.  Equilon is a
joint  venture  that  combines  major  elements  of the  companies'  western and
midwestern U.S. refining and marketing  businesses and their nationwide trading,
transportation and lubricants businesses.  Texaco owns 44 percent and Shell owns
56 percent of Equilon.

Beginning  January 1, 1998, we are  accounting for our interest in Equilon using
the equity method.  Under this method,  we record our share of Equilon's results
of  operations  on a  one-line  basis to Equity in Income of  Affiliates  in the
Consolidated  Statement of Income.  We reclassified the net amount of assets and
liabilities of the businesses contributed to Equilon to Investments and Advances
in the  Consolidated  Balance Sheet.  Additionally,  we now record  transactions
between Texaco and Equilon as outside  third-party  transactions.  The foregoing
results  in  significant  variances  between  the 1998 and 1997  periods  in the
individual line captions appearing in our financial statements.

The carrying amounts at January 1, 1998, of the principal assets and liabilities
of the  businesses  we  contributed  to Equilon  were $.3 billion of net working
capital  assets,  $2.8 billion of net  properties,  plant and  equipment and $.2
billion of debt.

Summarized  unaudited  financial  information  for Equilon,  for the three month
period ended March 31,  1998,  is  presented  below on a 100% Equilon  basis (in
millions of dollars):

<TABLE>
<S>                                                    <C>   
           Gross revenues                              $6,360
           Income before income taxes                  $  112
</TABLE>

We record  provision  for income taxes and related  liability  applicable to our
share of Equilon's income in our consolidated financial statements.

At March 31,  1998,  we had a note  receivable  from  Equilon  of $463  million,
representing reimbursement of certain capital expenditures incurred prior to the
formation of the joint venture. These proceeds were received in April, 1998.





                                      - 4 -
<PAGE>


In  April,  1998,  Shell  Oil  Company  entered  into an  agreement  to sell its
Anacortes refinery to Tesoro Petroleum  Corporation as part of an agreement with
the Federal Trade Commission  (FTC).  Equilon is entitled to the net proceeds of
the sale and any gain or loss  which  may  result  from the  disposition  of the
refinery.  Tesoro will  acquire the  refinery  for $237  million  plus a working
capital adjustment.  Subject to final FTC approval,  the transaction is expected
to close during the summer of 1998.

Texaco, Shell and Saudi Refining,  Inc. are working to finalize agreements for a
separate  joint venture  involving  their  eastern  United States and Gulf Coast
refining and marketing businesses.  Initially,  Texaco and Saudi Refining,  Inc.
will each own 32.5 percent and Shell will own 35 percent of the joint venture.


Note 2. Inventories
-------------------

The inventory accounts of Texaco Inc. and consolidated  subsidiary companies are
presented below (in millions of dollars):

<TABLE>
<CAPTION>

                                                                                                 As of
                                                                                --------------------------------------
                                                                                 March 31,                December 31,
                                                                                   1998                       1997
                                                                                -----------               ------------
                                                                                (Unaudited)

<S>                                                                               <C>                       <C>   
     Crude oil                                                                    $  169                    $  308

     Petroleum products and petrochemicals                                           768                       893

     Other merchandise                                                                39                        59

     Materials and supplies                                                          184                       223
                                                                                  ------                    ------
          Total                                                                   $1,160                    $1,483
                                                                                  ======                    ======


Note 3. Contingent Liabilities
------------------------------

Information  relative to commitments  and contingent  liabilities of Texaco Inc.
and  subsidiary  companies  is presented in Notes 16 and 18, pages 57-58 and 61,
respectively, of Texaco Inc.'s 1997 Annual Report to Stockholders.


                                   ----------

In the company's opinion, while it is impossible to ascertain the ultimate legal
and financial liability with respect to contingent  liabilities and commitments,
the aggregate  amount of such  liability in excess of financial  reserves is not
anticipated to be materially important in relation to the consolidated financial
position or results of operations of Texaco.












                                      - 5 -
<PAGE>

Note 4. Caltex Group of Companies
---------------------------------

Summarized  unaudited  financial  information for the Caltex Group of Companies,
owned 50% by Texaco and 50% by Chevron Corporation, is presented below on a 100%
Caltex Group basis (in millions of dollars):


                                                                              For the three months
                                                                                 ended March 31,
                                                                              --------------------
                                                                              1998            1997
                                                                              ----            ----
<S>                                                                          <C>             <C>   
                  Gross revenues                                             $4,306          $4,694

                  Income before income taxes                                 $  319          $  320

                  Net income                                                 $  204          $  186
</TABLE>


Effective  October 1, 1997,  Caltex  changed  the  functional  currency  used to
account for operations in its Korean and Japanese affiliates to the U.S. dollar.

Effective  April 1, 1997,  Caltex' 40%  interest in its Bahrain  refining  joint
venture  (Bapco)  was  sold  to  the  Government  of the  State  of  Bahrain  at
approximately net book value.







                              * * * * * * * * * * *







In the determination of preliminary and unaudited  financial  statements for the
three-month  periods ended March 31, 1998 and 1997, our accounting policies have
been applied on a basis  consistent with the application of such policies in our
financial  statements  issued in our 1997 Annual Report to Stockholders.  In our
opinion,  we have made all  adjustments  and  disclosures  necessary  to present
fairly our results of operations  for such periods.  These  adjustments  include
normal  recurring  adjustments.  The information is subject to year-end audit by
independent public  accountants.  We make no forecasts or  representations  with
respect to the level of net income for the year 1998.











                                      - 6 -
<PAGE>

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------



RESULTS OF OPERATIONS
---------------------

Texaco's  net income for the first  quarter of 1998 was $259  million  ($.46 per
share).  This  compares  with net income  for the first  quarter of 1997 of $980
million  ($1.80 per share),  including a special item.  Net income for the first
quarter of 1997, before a special benefit of $488 million  associated with a tax
settlement, was $492 million ($.90 per share).

In the first quarter of 1998:
           o    Worldwide daily production rose 16 percent;
           o    Cash  operating  expenses  per  barrel  dropped  more  than five
                percent, aided by lower energy costs and higher volumes;
           o    Capital and exploratory expenditures grew 21 percent; and
           o    Equilon Enterprises LLC, a joint venture combining Texaco's and
                Shell's western and midwestern U.S. downstream assets, began 
                commercial operations.

Our first quarter 1998 results were marked by increases in production,  improved
downstream results and tight controls on cash operating expenses. However, these
positive  factors  could not  overcome  the decline in  worldwide  crude oil and
natural gas prices.  Operationally,  we  experienced a very good first  quarter.
Production  increases were on target toward  achieving our planned  double-digit
growth for the year; however,  total earnings were significantly impacted by the
drop in worldwide crude oil and natural gas prices.

The first quarter of 1998 included a full quarter of production from the Captain
and Erskine  fields,  both in the U.K.  North Sea.  Production  increased in the
Partitioned Neutral Zone (between Saudi Arabia and Kuwait), Colombia, and in the
U.S.  as a result of the  November,  1997  acquisition  of  Monterey  Resources.
Additionally, first quarter production included the recently acquired 20 percent
interest in the Karachaganak field in Kazakhstan.

Our worldwide downstream operations benefited from higher gasoline sales volumes
and higher margins.  In the U.S.,  margins  improved over last year's  depressed
levels but  weakened  during the quarter due to  oversupply.  Equilon,  our U.S.
downstream  alliance  with Shell Oil  Company,  recently  began  operations  and
agreements are being finalized by Texaco,  Shell and Saudi Refining,  Inc. for a
separate  joint  venture  involving  the  Eastern  and Gulf Coast  refining  and
marketing businesses.








                                      - 7 -
<PAGE>


OPERATING EARNINGS

PETROLEUM AND NATURAL GAS
     EXPLORATION AND PRODUCTION
        United States

First quarter 1998 earnings were $107 million,  compared to $311 million for the
first  quarter of 1997.  The decline was a result of lower crude oil and natural
gas prices.  Average  realized  crude oil prices  were $11.78 per barrel,  $7.84
below 1997. Crude oil prices have plummeted due to rising oil stocks and slowing
of world demand growth. Average natural gas prices were $2.14 per thousand cubic
feet (MCF),  $.52 below  1997.  Prices for  natural  gas  decreased  due to mild
weather as well as increased inventory levels.

Production   increased  more  than  12  percent;   however,   earnings  did  not
significantly  benefit  from this  increase  due to low heavy  crude oil prices.
Higher volumes  included  production from the acquired  Monterey  properties and
continued development of natural gas opportunities in Texas and Louisiana.

We continued  to  aggressively  pursue  producing  opportunities  in the Gulf of
Mexico leading to higher exploration  expenses this year.  Exploration  expenses
for the first quarter were $96 million  before tax versus $42 million last year.
Operationally, cash operating expenses on a per barrel basis were lower than the
first quarter of 1997.

         International

First quarter 1998  earnings were $40 million,  compared to $156 million for the
first quarter of 1997. The decline in earnings was the result of lower crude oil
prices.  Average  realized  crude oil  prices  were  $11.95  per  barrel for the
quarter,  $7.53  below  1997.  At  these  depressed  prices,  earnings  did  not
significantly  benefit  from a daily  production  increase  of 20  percent.  The
increase was from a full quarter of Captain and Erskine production in 1998, both
of which are in the U.K. North Sea. Production also increased in the Partitioned
Neutral Zone and Colombia,  and as a result of our recently  acquired 20 percent
interest in the Karachaganak field in Kazakhstan.

Operating results for the first quarter 1998 included a non-cash currency charge
of $4 million  related to deferred  income taxes  denominated in British pounds.
This compares to a benefit of $19 million for the first quarter of 1997.


     MANUFACTURING, MARKETING AND DISTRIBUTION
         United States

First  quarter  1998  earnings  were $47 million and  include  results  from the
recently  formed  Equilon,  our  downstream  alliance  with  Shell Oil  Company.
Earnings for the first quarter of 1997 were $6 million.

Earnings  in 1998  included  the  impact  of  overall  lower  crude  costs  that
temporarily  improved margins.  However,  weather conditions weakened demand for
heating oil and West Coast gasoline.  Gasoline  prices,  adjusted for inflation,
hit their lowest levels in 25 years.  Additionally,  refinery  results  included
scheduled downtime at several plants within our system.

Earnings  for 1997  included  the adverse  effects of intense  competition  that
squeezed margins in the West Coast marketplace.  Refinery fires late in 1996 and
early in 1997  negatively  affected  product  yields  and caused  casualty  loss
expenses during 1997.







                                      - 8 -
<PAGE>

         International

First quarter 1998 earnings were $182 million,  compared to $104 million for the
first quarter of 1997. The  international  refining and marketing  businesses in
Europe, Latin America and our affiliate Caltex, reported higher 1998 earnings.

Our refining operations in Europe and Latin America experienced improved margins
from lower crude costs in 1998.  Improved European marketing results were due to
increased  sales  volumes  and higher  retail  margins  primarily  in the United
Kingdom.  The recovery from the 1997 Scandinavian  price war also contributed to
the  higher  earnings.  Improved  margins  and higher  sales  volumes in Central
America,  the Caribbean,  and Brazil drove stronger  marketing  results in Latin
America.

In the Caltex area,  margins in Korea improved due to decreased  crude costs and
partial recovery of local fourth quarter 1997 currency  losses.  The Caltex area
also  experienced a modest increase in refined  product sales volumes.  Although
inland sales  volumes were lower due to the economic  crisis in Southeast  Asia,
higher trading volumes led to the overall volume  improvement.  Included in 1998
earnings were unfavorable net currency-related effects of $16 million; primarily
tax  charges on local  currency  gains on U.S.  obligations  resulting  from the
strengthening  of the Korean won. Last year's results  included  Korean currency
losses of $21 million.

Results for 1998 included a non-cash currency charge of $3 million for the first
quarter  related to deferred income taxes  denominated in British  pounds.  This
compares to a benefit of $5 million for the first quarter of 1997.

         NONPETROLEUM

Nonpetroleum  earnings for the first  quarter of 1998 were $2 million,  compared
with $12 million for the first quarter of 1997.


                             CORPORATE/NONOPERATING

Corporate and nonoperating results for the first quarter of 1998 were charges of
$119 million,  compared to $97 million for the first quarter of 1997,  excluding
special items.  The change was due principally to increased  interest expense on
higher debt levels and Texaco's corporate advertising campaign introduced in the
second half of 1997.

Including a special  benefit of $488 million  associated with an IRS settlement,
corporate/nonoperating  earnings  for the first  quarter  of 1997  totaled  $391
million.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

Our cash, cash equivalents and short-term investments were $421 million at March
31, 1998, as compared with $395 million at year-end 1997.

During  1998,  our  operations  provided  cash of $657  million.  We  raised  an
additional  $482  million  from net  borrowings.  We spent  $784  million on our
capital and exploratory  program and paid $253 million in common,  preferred and
minority interest dividends.

At March  31,  1998,  our ratio of total  debt to total  borrowed  and  invested
capital was 33.7%,  as compared with 32.3% at year-end  1997. At March 31, 1998,
our long-term  debt included $1.7 billion of debt scheduled to mature within one
year which we have both the  intent and  ability  to  refinance  on a  long-term
basis.  During  the first  quarter  of 1998,  we issued  $83  million  under our
Medium-Term  Note Program and borrowed  $150 million at 5.92% for seven years to
cover expenditures at our Erskine field in the U.K. North Sea.  Commercial paper
at March 31, 1998  totaled  $1,245  million,  as compared  with $892  million at
December 31, 1997. We maintained revolving credit facilities with commitments of
$1.7 billion, which were unused at March 31, 1998.



                                      - 9 -

<PAGE>

During the first  quarter of 1998,  we  purchased  about $100  million of common
stock in the open market. This completed a program under which we purchased $650
million of our common  stock during the last two years.  On March 30,  1998,  we
announced  that we will  purchase up to an  additional  $1 billion of our common
stock, subject to market conditions,  through open market purchases or privately
negotiated transactions.

In  April  ,1998,   we  received   $463  million  from   Equilon,   representing
reimbursement of certain capital expenditures incurred prior to the formation of
Equilon.  Also in April,  1998, we received a cash  distribution from Equilon of
$83 million.

During April,  1998, we repurchased  approximately  $200 million of 10.61% notes
which we assumed in connection with the November,  1997  acquisition of Monterey
Resources. We funded the repurchase by issuing commercial paper.


CAPITAL AND EXPLORATORY EXPENDITURES
------------------------------------

Capital and exploratory  expenditures were $967 million for the first quarter of
1998, compared to $799 million for the same period in 1997.

In the United States upstream,  offshore development  continued in the deepwater
Gulf  of  Mexico  where  Texaco  holds a  strong  lease-acreage  position.  Work
continued  during  the  quarter  on  the  fabrication  and  installation  of the
Petronius  compliant tower.  Also, subsea  development work moved forward on the
Gemini  field,  a major  gas  reserve  with  production  expected  during  1999.
Expenditures in 1998 increased for enhanced oil recovery projects using advanced
thermal recovery  techniques to increase  production from the acquired  Monterey
properties and other core producing fields.  Exploratory  expenses in the United
States  increased  as we  aggressively  pursued  our program to grow oil and gas
production and reserves.

Internationally,   higher  upstream   expenditures  include  our  investment  in
discovered reserve opportunities,  such as the Karachaganak venture. Development
work continued in the U.K. North Sea, Indonesia and other promising areas.

In the downstream operations,  through domestic and international  alliances and
subsidiaries,  Texaco continues to invest in projects that enhance brand loyalty
and increase market share.











                                     - 10 -
<PAGE>


                           PART II - OTHER INFORMATION



Item 1. Legal Proceedings
-------------------------

Reference is made to the  discussion of Contingent  Liabilities in Note 5 to the
Consolidated  Financial  Statements  of this  Form  10-Q and to Item 3 of Texaco
Inc.'s  1997  Annual  Report  on Form  10-K,  which are  incorporated  herein by
reference.

Environmental Matters

As of March 31,  1998,  Texaco  Inc.  and/or its  subsidiaries  were  parties to
various  proceedings,  instituted by governmental  authorities arising under the
provisions  of  applicable  laws or  regulations  relating to the  discharge  of
materials into the  environment  or otherwise  relating to the protection of the
environment, none of which is material to the business or financial condition of
the company.  The following is a brief  description of a new  proceeding  which,
because of the amount involved,  requires disclosure under applicable Securities
and Exchange Commission regulations:

         On March 26, 1998, the Department of Justice and the U.S. Environmental
         Protection  Agency sued Texaco  Exploration  and Production Inc. (TEPI)
         alleging  that TEPI  violated the Clean Water Act and the Oil Pollution
         Act due to leaks and spills at the Aneth unit,  located in southeastern
         Utah.  The  complaint  seeks $2.3  million and  unspecified  injunctive
         relief  for  spills  between  December  6,  1991  and  the  time of the
         complaint.



Item 4. Submission of Matters to a Vote of Security Holders
-----------------------------------------------------------

The Annual  Meeting of the  Stockholders  of Texaco  Inc.  was held on April 28,
1998,  for the  purpose  of (1)  electing  five  directors,  (2)  approving  the
appointment  of auditors for the year 1998,  (3) approval of an amendment to the
Stockholder Rights Plan and (4) acting on two stockholder  proposals relating to
an independent  chairperson and  classification  of the Board of Directors.  The
following summarizes the stockholder voting results:

Stockholders  elected Peter I. Bijur, John Brademas,  Mary K. Bush, Sam Nunn and
Charles H. Price,  II, each for a  three-year  term  expiring at the 2001 Annual
Meeting. The vote tabulation for each individual director was as follows:

<TABLE>
<CAPTION>


                    Director                   Shares Voted for           % of Vote           Shares Withheld
                    --------                   ----------------           ---------           ---------------
<S>                                                <C>                        <C>                    <C>       
                    Peter I. Bijur                 477,015,808                97.7%                  11,212,699
                    John Brademas                  478,602,997                98.0%                   9,625,510
                    Mary K. Bush                   478,489,714                98.0%                   9,738,793
                    Sam Nunn                       478,865,062                98.1%                   9,363,445
                    Charles H. Price, II           478,979,573                99.1%                   9,248,934
</TABLE>

Directors  continuing  in office were Willard C. Butcher,  Edmund M.  Carpenter,
Michael C. Hawley,  Franklyn G. Jenifer, Robin B. Smith, William C. Steere, Jr.,
Thomas A. Vanderslice and William Wrigley.

The  appointment of Arthur Andersen LLP to audit the accounts of the company and
its subsidiaries  for the fiscal year 1998 was approved.  Of those shares voted,
483,830,368  shares,  or 99.4%,  voted in favor,  2,829,316 shares, or .6% voted
against, and 1,568,421 shares abstained.




                                     - 11 -
<PAGE>


The proposal to approve an amendment to the Stockholder Rights Plan as set forth
in Item 3 of the 1998 Proxy  Statement  was  approved.  Of those  shares  voted,
281,120,105 shares, or 65.6%, voted in favor, 147,633,897 shares, or 34.4% voted
against, and 3,326,210 shares abstained.

Stockholders rejected the two stockholder proposals. The proposal relating to an
independent chairperson, as set forth in Item 4 of the 1998 Proxy Statement, was
rejected  by a vote of  315,507,089  shares,  or 74.3%.  Shares  voting  for the
proposal totaled 109,171,418 shares, or 25.7%, and 7,395,177 shares abstained.

The proposal relating to the  classification  of the Board of Directors,  as set
forth  in  Item 5 of  the  1998  Proxy  Statement,  was  rejected  by a vote  of
240,083,047 shares, or 56.5%. Shares voting for the proposal totaled 184,737,419
shares, or 43.5%, and 7,234,521 shares abstained.






                                     - 12 -
<PAGE>


Item 5. Other Information
-------------------------
<TABLE>
<CAPTION>
                                                                                                    (Unaudited)
                                                                                                --------------------
                                                                                                For the three months
                                                                                                   ended March 31,
                                                                                                --------------------
                                                                                              1998               1997
                                                                                              ----               ----
                                                                                                (Millions of dollars)
<S>                                                                                           <C>                <C>  
FUNCTIONAL NET INCOME
---------------------
Operating earnings
   Petroleum and natural gas
      Exploration and production
         United States                                                                        $ 107              $ 311
         International                                                                           40                156
                                                                                              -----              -----
           Total                                                                                147                467
                                                                                              -----              -----
      Manufacturing, marketing and distribution
         United States                                                                           47                  6
         International                                                                          182                104
                                                                                              -----              -----
           Total                                                                                229                110
                                                                                              -----              -----

           Total petroleum and natural gas                                                      376                577
   Nonpetroleum                                                                                   2                 12
                                                                                              -----              -----
           Total operating earnings                                                             378                589
Corporate/Nonoperating                                                                         (119)               391
                                                                                              -----              -----
Total net income                                                                              $ 259              $ 980
                                                                                              =====              =====

CAPITAL AND EXPLORATORY EXPENDITURES
------------------------------------
Exploration and production
         United States                                                                        $ 476              $ 352
         International                                                                          290                282
                                                                                              -----              -----
           Total                                                                                766                634
                                                                                              -----              -----
Manufacturing, marketing and distribution
         United States                                                                           88                 60
         International                                                                           99                101
                                                                                              -----              -----
           Total                                                                                187                161
                                                                                              -----              -----
Other                                                                                            14                  4
                                                                                              -----              -----
           Total                                                                              $ 967              $ 799
                                                                                              =====              =====

</TABLE>

                                     - 13 -
<PAGE>


<TABLE>
<CAPTION>
                                                                                                           (Unaudited)
                                                                                                      --------------------
                                                                                                      For the three months
                                                                                                         ended March 31,
                                                                                                      --------------------
                                                                                                      1998            1997
                                                                                                      ----            ----
<S>                                                                                                  <C>            <C>   
OPERATING DATA
--------------

Exploration and Production
--------------------------

United States
-------------
     Net production of crude oil and natural
         gas liquids (000 BPD)                                                                          452            384
     Net production of natural gas - available
         for sale (000 MCFPD)                                                                         1,738          1,656
     Total net production (000 BOEPD)                                                                   742            660

     Natural  gas sales (000 MCFPD)                                                                   3,882          3,841

     Average U.S. crude (per bbl)                                                                    $11.78         $19.62
     Average U.S. natural gas (per mcf)                                                              $ 2.14         $ 2.66
     Average WTI (Spot) (per bbl)                                                                    $15.92         $22.76
     Average Kern (Spot) (per bbl)                                                                   $ 8.89         $15.98

International
-------------
     Net production of crude oil and natural
         gas liquids (000 BPD)
         Europe                                                                                         158            114
         Indonesia                                                                                      155            140
         Partitioned Neutral Zone                                                                       108             90
         Other                                                                                           70             69
                                                                                                     ------         ------
              Total                                                                                     491            413
     Net production of natural gas - available
         for sale (000 MCFPD)
         Europe                                                                                         258            241
         Colombia                                                                                       208            132
         Other                                                                                          123            102
                                                                                                     ------         ------
              Total                                                                                     589            475

     Total net production (000 BOEPD)                                                                   589            492

     Natural gas sales (000 MCFPD)                                                                      777            620

     Average International crude (per bbl)                                                           $11.95         $19.48
     Average U.K. natural gas (per mcf)                                                              $ 2.65         $ 2.85
     Average Colombia natural gas (per mcf)                                                          $  .91         $ 1.05

Worldwide
---------
     Total worldwide net production (MBOEPD)                                                          1,331          1,152

</TABLE>


                                     - 14 -
<PAGE>

<TABLE>
<CAPTION>
                                                                                                           (Unaudited)
                                                                                                      --------------------
                                                                                                      For the three months
                                                                                                         ended March 31,
                                                                                                      --------------------
                                                                                                      1998            1997
                                                                                                      ----            ----
<S>                                                                                                  <C>            <C>   
OPERATING DATA
--------------

Manufacturing, Marketing and Distribution
-----------------------------------------

United States
-------------
     Refinery input (000 BPD)
         Western U.S.                                                                                   358            409
         Eastern U.S.                                                                                   313            336
                                                                                                     ------         ------
              Total                                                                                     671            745

     Refined product sales (000 BPD)
         Gasolines                                                                                      492            497
         Avjets                                                                                         163             89
         Middle Distillates                                                                             180            214
         Residuals                                                                                       96             85
         Other                                                                                          120            120
                                                                                                     ------         ------
              Total                                                                                   1,051          1,005

International
     Refinery input (000 BPD)
     Europe                                                                                             374            348
     Affiliate - Caltex                                                                                 437            407
     Latin America/West Africa                                                                           57             62
                                                                                                     ------         ------
         Total                                                                                          868            817

     Refined product sales (000 BPD)
     Europe                                                                                             564            495
     Affiliate - Caltex                                                                                 593            586
     Latin America/West Africa                                                                          428            366
     Other                                                                                               49             44
                                                                                                     ------         ------
     Total                                                                                            1,634          1,491

</TABLE>




                                     - 15 -
<PAGE>

Item 6. Exhibits and Reports on Form 8-K
----------------------------------------

(a)  Exhibits

     --   (11) Computation of Earnings Per Share of Common Stock.

     --   (12) Computation of Ratio  of Earnings to Fixed Charges of Texaco on a
               Total Enterprise Basis.

     --   (20) Copy  of  Texaco  Inc.'s  Annual  Report  on  Form  10-K for  the
               fiscal year ended December 31, 1997 (including portions of Texaco
               Inc.'s  Annual  Report to  Stockholders  for the year  1997),  as
               previously  filed  by the  Registrant  with  the  Securities  and
               Exchange Commission, File No. 1-27.

     --   (22) Information  relative  to  the  various  matters  submitted  to a
               vote of security  holders are  described on pages 9 through 28 of
               the 1998 Proxy  Statement of Texaco Inc.,  relating to the Annual
               Meeting of  Stockholders  held on April 28, 1998,  as  previously
               filed  by  the  Registrant   with  the  Securities  and  Exchange
               Commission, File No. 1-27.

     -- (27.1) Financial Data Schedule for the three months ended March 31,
               1998.


     -- (27.2) Financial Data Schedules for periods ended  March 31, 1996,  June
               30, 1996,  September 30, 1996,  and  December 31, 1996,  restated
               from previous filings to report  basic  and  diluted Earnings per
               Share in accordance  with  FASB  Statement No. 128, "Earnings per
               Share."


     -- (27.3) Financial Data Schedules for periods  ended  March 31, 1997, June
               30, 1997, and September 30, 1997,  restated from previous filings
               to report basic and diluted Earnings per Share in accordance with
               FASB Statement No. 128, "Earnings per Share."


(b) Reports on Form 8-K:

     During the first quarter of 1998, the Registrant  filed Current  Reports on
     Form 8-K for the following events:

     1.   January 23, 1998 (date of earliest event reported: January 22, 1998)

          Item 5. Other Events -- reported that Texaco issued an Earnings  Press
          Release for the fourth quarter and year 1997.

     2.   January 30, 1998 (date of earliest event reported: January 15, 1998)

          Item 2.  Acquisition  or Disposition of Assets -- reported that Texaco
          and  Shell  Oil  Company  reached   agreement  on  the  formation  and
          operational  start  up of  Equilon  Enterprises  LLC,  a newly  formed
          Delaware limited  liability  company.  Equilon is a joint venture that
          combines major elements of the companies' western and mid-western U.S.
          refining  and  marketing  businesses  and  their  nationwide  trading,
          transportation  and  lubricants  businesses;  and Item 7(b),  Proforma
          Financial   Information,   provided   applicable   unaudited  proforma
          financial statements.

                                     - 16 -
<PAGE>

     3.   March 5, 1998 (date of earliest event reported: March 4, 1998)

          Item 5.  Other  Events  --  provided  a  description  of an  Officer's
          Certificate executed by Texaco Capital Inc., a wholly-owned subsidiary
          of the  Registrant,  which  established  the terms and provisions of a
          series of securities  designated "Series 1998 Medium-Term  Notes," for
          up to $500 million.

     4.   April 1, 1998 (date of earliest event reported: March 30, 1998)

          Item 5.  Other  Events  --  reported  that  Texaco  announced  a stock
          repurchase program for up to $1 billion.





                                     - 17 -
<PAGE>

                                   SIGNATURES
                                   ----------



     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.




                                                      Texaco Inc.
                                                --------------------------------
                                                     (Registrant)




                                        By:            R.C. Oelkers
                                                --------------------------------
                                                (Vice President and Comptroller)




                                        By:             R.E. Koch
                                                --------------------------------
                                                   (Assistant Secretary)




Date:    May 13, 1998
         ------------








                                     - 18 -