Texaco Inc. and Pennzoil Co. will reach an agreement to settle their dispute for considerably less than the $10.53 billion that a Texas jury ordered Texaco to pay its rival, oil industry analysts predicted yesterday.

Despite an apparent lull in the negotiations between the two firms, a settlement would be in the interests of both companies and probably will be reached early this year, several of the industry analysts said.

"Generally speaking, both parties have a very deep interest in getting this thing settled out of the courts soon," said Alan L. Edgar, director of energy services for Schneider, Bernet & Hickman in Dallas.

"Pennzoil does not want to risk an appeals process and retrial, which in the worst case could reverse" the judgment, he said. "Texaco does not want to risk having to go into Chapter 11" of the federal bankruptcy laws to seek protection from its creditors, which it might have to do, Edgar added.

"I think it behooves both of them to arrive at an agreement," said Ronald Londe of A. G. Edwards & Sons in St. Louis. "There are bound to be some bumps along the way."

On Dec. 10, a Texas judge upheld a jury finding that Texaco must pay $10.53 billion to Pennzoil as compensation for snatching Getty Oil Co. away from Pennzoil after those two companies had agreed to merge.

The judge also added some $600,000 in accrued interest to the award, making the total judgement more than $11.1 billion.

Interest on that verdict continues to mount at the rate of $3 million a day, giving Texaco an added incentive to settle quickly.

Because Pennzoil would have to pay federal income taxes on a cash payment, it can afford to settle for much less than $11 billion if a tax-free compromise can be worked out.

Both companies continued to refuse to discuss the negotiations. Mickey Gentry, a spokesman for Houston-based Pennzoil, said only that his company still is holding discussions; he refused to say whether meetings took place yesterday.

Texaco spokesman Larry Bingaman declined comment as well.

Pennzoil is said to be demanding that Texaco, which is based in White Plains, N.Y., give it oil-producing assets worth between $5.5 billion and $6 billion. One analyst pointed out that amount is as much as the company would get after taxes if it received the full cash award.

"I'm not talking dream stuff," Edgar said. "Six billion dollars is their Pennzoil's starting point."

Edgar predicted Pennzoil would use some of its $2.5 billion available line of credit to buy, at a substantial discount, Texaco properties that would include oil reserves in Kern County, Calif., that formerly belonged to Getty.

Those oil fields would add about 1 billion barrels to Pennzoil's reserves; the company could sell pieces of the property to retire the debt, Edgar said. The tax consequences of that and other possibilities suggested by analysts are not clear.

Several analysts said the goal of both companies is to find a transaction with sufficiently ambiguous worth that each can report different amounts to their shareholders.

The Kern River properties, described by one analyst as a "mother lode," fit into that scenario because, although they now produce about 100,000 barrels per day, they can be expanded significantly.

They also could be combined with oil shipments from Pennzoil's fields off the shore of southern California for refining, transporting or sale.

"The beauty of those Kern River properties is that they can mean one thing to the buyer and another to the seller," said an energy analyst in Houston who asked that his name not be used. The expectation is that Texaco will respond with a counteroffer to Pennzoil.

Londe pointed out that Pennzoil's desire to avoid taxes gives Texaco additional leverage: It could insist on transferring fewer properties in return for structuring the deal to Pennzoil's tax advantage.

"It's a complex transaction, and Pennzoil tends to like complex transactions, if you look back at what they have done before," Londe said. "But they tend to work toward the benefit of their shareholders. I think they are creative."

Texaco, on the other hand, would be acting uncharacteristically if it managed to turn these negotiations to its advantage, Edgar said.

Texaco has been criticized in the past for not making the best use of its resources and of dealing with the financial community in a high-handed manner.

Pointing out that his scenario involves Texaco behaving in a rational and businesslike manner, Edgar said, "They have never done it in the past, so why would they start now? Maybe this arrogant company is about to realize they have to change their ways."