press release

Chevron Press Release - Chevron Acquires New Exploration Tract Offshore China

SAN FRANCISCO, May 16, 1996 -- At ceremonies today in Beijing, Chevron Overseas Petroleum Limited signed a production-sharing contract with China National Offshore Oil Corporation (CNOOC) to explore for natural gas in a 783-square-mile (2,030-square-kilometer) offshore tract in the South China Sea.

"We are delighted to add this promising acreage to our South China Sea natural gas exploration portfolio," said Richard Matzke, president of Chevron Overseas Petroleum Inc., who signed the contract for Chevron. Matzke pointed out that the new exploration area, designated 63/15, is near two other Chevron exploration areas, 62/23 and 50/20, which the company acquired early in 1995. The Chevron areas are near the site of existing commercial gas discoveries in the South China Sea.

"We are eager to begin exploration in this new area which we believe has the potential for significant gas accumulations," said Ross Deegan, managing director of Chevron Overseas' China Business Unit, and head of Chevron's Beijing office. Deegan said seismic data from studies on the new 63/15 area will be integrated with results generated from studies on areas 62/23 and 50/20, and expressed his optimism for the area's potential due to its geologic similarities and proximity to commercial discoveries in the immediate region.

Under the new agreement, Chevron will begin a 3-D seismic survey during the summer of 1996, covering 241 square miles (623 square kilometers) of the 63/15 area. Exploratory drilling would commence in 1997, following the interpretation of the seismic data.

Wang Yan, President of China National Offshore Oil Corporation, expressed his confidence in the arrangement, pointing out that "We are pleased to have Chevron as our partner in so many oil operations in China. They have been active in exploration and production offshore China since 1983, and have greatly helped our country to enhance its natural resources."

Last June, in conjunction with CNOOC and its other partners in the CACT Operators Group, Chevron brought the two newest Huizhou oil fields onto production, raising CACT's total production in the Pearl River Delta to the current record levels of 120,000 barrels per day, and giving CACT the distinction of being the largest offshore oil producer in China.

Updated: May 1996