press release

Chevron Press Release - Agip, Chevron And Texaco Sign Agreement to Study New Tract Offshore China

SHEKOU, CHINA, Feb. 29, 1996 -- Agip, Chevron, and Texaco announced they have entered into an 18-month geophysical survey agreement with China National Offshore Oil Corporation (CNOOC) to conduct seismic surveys on a 241-square-mile (625-square-kilometer) offshore tract in the Pearl River Mouth Basin of the South China Sea.

The survey area, designated 16/19, is adjacent to and west of petroleum contract area 16/08, site of the prolific Huizhou oil fields which were discovered, brought onstream and are operated by the CACT Operators Group, an international consortium including CNOOC, Agip, Chevron and Texaco.

The international consortium is eager to begin the seismic program in 16/19, particularly in view of its geographic and geologic proximity to the four Huizhou producing fields. Crude oil from the two newest Huizhou fields came onto production last June, raising CACT's total production from the Pearl River Delta to the current record level of 120,000 barrels per day, and giving CACT the distinction of being the largest offshore oil producer in China.

Under the new agreement, the consortium will begin a survey in April covering 77 square miles (200 square kilometers) of the 16/19 area. This survey will be conducted in conjunction with a larger, 350-square-mile (900-square-kilometer) 3-D seismic survey currently in progress in the 16/08 contract area. Should the surveys confirm the exploration potential of the 16/19 area, Agip, Chevron and Texaco will have an option to negotiate a petroleum contract with CNOOC.

The participants are optimistic that the seismic data from both area 16/19 and 16/08 will yield positive benefits not only for CACT's future exploration efforts, but also for its continuing development activity in the existing Huizhou fields.

Notes to editors:

Agip, Chevron and Texaco formed the ACT Operators Group in 1983 to develop hydrocarbon resources offshore China in the Pearl River Mouth Basin of the South China Sea. ACT drilled its first well in 1984, and made its first commercial discovery in 1985. That discovery subsequently became the consortium's first oil field, Huizhou 21-1, brought onto production in 1990, and followed by a second field, Huizhou 26-1, in 1991, and the third and fourth fields, Huizhou 32-2 and 32-3 in 1995.

Effective Jan. 1, 1996, CNOOC formally joined the ACT Operators Group as their fourth partner in the operation of the offshore fields, and the new joint operating group changed its name to the CACT Operators Group. Agip, Chevron and Texaco each hold a 16 1/3-percent interest in the South China Sea oil fields, with CNOOC holding the remaining 51 percent.

Updated: February 1996