Texaco was at the heart of a public relations disaster last week when a taped conversation of senior executives using racial slurs and discussing how to destroy documents which reflected its poor record of hiring minorities and women was made public. One of the executives who was taped was David Keough, then the company's assistant treasurer and now the suspended chief financial officer of Bermuda-based Heddington Insurance. The following Wall Street Journal story describes how Texaco chairman Peter Bijur worked to control the damage.

NEW YORK (The Wall Street Journal) -- Peter Bijur spent 30 years at Texaco Inc. figuring out how to get oil and gas out of the ground in some of the most remote regions of the world. He has spent the past week adroitly managing a public-relations disaster at home.

Unlike his counterparts, for example, at Mitsubishi Motors Corp., who initially defended management in sexual harassment disputes with employees this year, the Texaco chairman has distinguished himself by admitting corporate wrongdoing and pledging to do what is right in the future.

Mr. Bijur, 54 years old, quickly took action against high-ranking officials connected with a meeting caught on tape during which racial slurs were made.

He suspended with pay two officials attending the meeting and launched an internal investigation into the incident. He also stopped benefits for two other officers caught on tape at the same gathering.

Some of the credit for Mr. Bijur's performance -- at a news conference on Wednesday afternoon and on ABC's Nightline that evening -- goes to public-relations power broker Linda Gosden Robinson. Mrs. Robinson has worked with Texaco for years, playing an integral role in shaping public opinion during the company's bitter takeover battle in the 1980s with Pennzoil Co. and its proxy fight with Carl Icahn. She was among the advisers and executives Mr.

Bijur gathered together on Monday at Texaco's White Plains, New York, headquarters, and was present at the news conference in a Manhattan hotel.

Does that suggest Mr. Bijur is engaged in nothing more than a slick public-relations campaign? Not according to Texaco. "There's no spin doctor here,'' said Peter Maneri, an official in the company's communications division. In fact, Mr. Bijur himself insisted on writing the script for a videotape, beamed by satellite to Texaco offices worldwide, in which he apologizes to employees and expresses his outrage. "This is very typical of his management style,'' said C. Robert Black, who heads Texaco's exploration and production operations. "It's not easy for someone to do what he did.'' Others are less eager to applaud Mr. Bijur. Cyrus Mehri, an attorney for the plaintiffs in the race-discrimination case at the root of the current crisis, complimented Mr. Bijur for being "very well prepared'' and handling himself "well in a difficult position''. But that, Mr. Mehri added, was the "handiwork'' of Mrs. Robinson. "He's still not facing up to the fact that this incident wouldn't have happened if a corporate culture of disrespect for minorities hadn't existed.'' Certainly, Mr. Bijur is part of the Texaco culture, having joined the company straight out of graduate school at Columbia University. A native of New York, Mr. Bijur got onto the fast track early at Texaco. In 1983, at the age of 42, he became the company's youngest vice president ever. He scored big with management -- and Wall Street -- with his swift handling of the sale of $1 billion of Getty Oil Co. assets after Texaco took over that company and his whittling down of the debt accrued with the acquisition.

Then, heading up Texaco's far-flung international divisions, he guided the company's all-important production assets in the North Sea and in the Saudi-Kuwaiti neutral zone. Since being named chairman in July, Mr. Bijur has broached the unthinkable for the Texaco of old: a major partnership with a fierce rival. Texaco last month confirmed talks with Shell Oil Co., the US unit of the Royal/Dutch Shell Group, and Saudi Arabian state oil company Saudi Aramco about combining their refining and marketing assets in the US.

What the Shell deal, which is still being negotiated, suggests about Mr. Bijur "is a man who is prepared to consider alternatives and be open-minded and not inflexible'', said an oil-industry friend of the chairman's. "Peter's ego doesn't demand that he dominate and humiliate.'' Mr. Bijur's style, according to associates, is to be inclusive, to seek out advice from as many different people as possible before making a decision.

"He was raised during the tumultuous 1960s, and his sensitivities are rooted in the reality of today,'' said a Texaco colleague.

Edward Gadsden Jr., Texaco's director of employment and diversity, said Mr.

Bijur was one reason he agreed to leave Johnson & Johnson Co. to join the oil giant. Mr. Gadsden, who is black, said he had to be sure senior management was serious about establishing an aggressive diversity programme. Then-chairman Alfred DeCrane moved to set up the programme in 1994, but Mr. Bijur was also involved.

"I believe that Peter Bijur is sincere about creating opportunities for women and minorities,'' Mr. Gadsden said. "They had a vision for Texaco and that's why I came here, to start something from scratch.'' Damage control at Texaco During his live appearance on Nightline, the telegenic Mr. Bijur said Texaco -- which has one black board member and no black department heads or vice presidents -- has come far in achieving greater diversity in the company.

According to Texaco, 16.6 percent of its US work force of 27,426 were minorities in 1991, while as of last June, 22.3 percent of its 19,554 employees were minorities. The company said the figures show it has a better record for hiring minorities than many in the industry -- though not as good as some.

Critics of the company see vast room for improvement. "We still see people who are problems within Texaco's management,'' said Gary Brouse, director of equality programmes for the Interfaith Center for Corporate Responsibility, which represents 280 religious institutional investors. "It's not just these officials'' who were captured on the audio tapes.

The oil industry as a whole isn't known for racial diversity or for its ability to bite the bullet when disaster strikes. The public remembers Exxon Corp.'s defensiveness after the 1989 Exxon Valdez oil spill in Alaska, and what even Shell admits was a less-than-smooth handling of environmentalists' attack on the company's plan to sink a drilling rig in the North Sea.

And as facilely as Texaco appears to be managing the race-tapes crisis, Mr.

Bijur is far from out of the woods. He has said he is willing to engage in settlement talks with plaintiffs in the $520 million racial-discrimination lawsuit the four Texaco officials were discussing when they were taped, which could cost Texaco millions of dollars. The company has received subpoenas from a grand jury investigating whether documents sought by the plaintiffs were destroyed by company officers.

But if anyone can handle the emergency, it is the Texaco chairman, friends and associates said. They said Mr. Bijur is different from the old oil industry guard, not only in his management style but also in his personal tastes. He can often be found having lunch in the company cafeteria, where he frequently selects hot dogs over pepper steak. Asked once why he chose to drive into Manhattan for a meeting instead of taking a company helicopter, he responded: "I have shareholders who wouldn't put up with that.'' TEXACO chairman Peter Bijur speaks at a press conference last Wednesday.