Report to Stockholders

By David J. O'Reilly, Chairman and CEO
ChevronTexaco Corporation

Summary Remarks

San Ramon, California, April 27, 2005

Also see a press release regarding this speech.

As you can see, this has been a year of great accomplishment in all of our businesses.

Our success demonstrates that we're moving in the right direction - driven by our corporate strategies. They are the right strategies at the right time.

And our success is due to excellent execution of those strategies by our people. Despite extraordinary challenges, ChevronTexaco people deliver the results we need in the world's most challenging areas.

We have the right strategies, the right people, a strong queue of projects and great momentum.

We took a significant step to enhance those strategies earlier this month when we announced that we will acquire Unocal Corporation. This is a rare opportunity to acquire a unique independent with supermajor assets that complement our strategies and core assets.

The combination of the two companies is a powerful one and offers strong synergies. For ChevronTexaco, the acquisition provides both immediate and long-term value, with the addition of significant resources. Unocal's assets strongly complement those of ChevronTexaco; in fact, they fit like a glove.

The acquisition will enhance our oil and gas production and reserves in key strategic regions of Southeast Asia and deepwater Gulf of Mexico and in the Caspian region.

The combined production will be about 3 million barrels per day, with combined proved reserves of approximately 13 billion barrels, increasing our reserve base by about 15 percent.

Additionally, the acquisition provides the opportunity to extract additional value through sound project execution and to capitalize on Unocal's large undeveloped resource base.

Because of the natural fit of Unocal's resources, we expect to be able to rapidly integrate operations efficiently and benefit from Unocal's talented workforce and best practices.

Technology is critical to the success of our company. We leverage technology to deliver world-class performance and use technology partnerships to expand current energy sources and to develop solutions for the future.

We have a unique organization that delivers integrated technologies and services to the entire value chain of upstream, downstream and natural gas-based businesses.

Our technology strategies focus on opportunities for growth by building competency and capability in exploration, deepwater development, natural gas and heavy oil.

We know the key to long-term success is our ability to foster and maintain both close and lasting relationships. We are intimately tied to the communities in which we operate, and we typically operate in communities for many, many years. Going forward, the model of long-term partnerships is one we will continue to follow.

These sorts of lasting relationships can only happen when we act as responsible partners, as we have demonstrated by programs as diverse as our Angola Partnership Initiative and our HIV/AIDS policy.

This connection to the communities in which we operate is reflected in our Corporate Responsibility Report, which is currently being updated and soon will be available online.

Ladies and gentlemen, since we met last year, we have had the best year in our history. And we are maintaining our momentum moving forward.

We are building on tremendous financial strength, a strong asset base, our world-class people and our commitment to a successful long-term strategic direction and partnerships around the world.

We are reaping the rewards from having the right strategies and being focused on the right things.

Our success is a reflection of the great efforts of the thousands of ChevronTexaco people around the world.

Updated: April 2005