press release

Chevron Press Release - Chevron And Caspian Transco Announce Transportation Agreement

TBILISI, GEORGIA, March 2, 1998 -- Chevron and Caspian TransCo announced today that they have entered into an agreement with the Republic of Georgia which gives Chevron and Caspian TransCo the right to use and operate Georgian oil transportation facilities from the Georgian town of Khashuri to the port of Batumi on the Black Sea.

President Eduard Shevardnadze represented the government of Georgia at the signing. The agreement was signed by Richard Matzke, president of Chevron Overseas Petroleum Inc., and a director of Chevron Corp.; and Okan Tapan, president of Caspian TransCo.

"Diversifying the transportation routes in the region will benefit all the countries of the Caspian. This is a situation where all countries win," said Matzke. "Georgia benefits from the use of its transportation facilities, and the increase in exports supports the rapid development of the Tengiz field in Kazakhstan. Upon completion of the Caspian Pipeline Consortium project through Kazakhstan and Russia, Tengizchevroil will have the optimum capacity available for transport, thereby greatly enhancing Tengiz's production level and economic value," added Matzke.

Chevron and Caspian TransCo are currently transporting Tengiz crude from Kazakhstan through Azerbaijan and Georgia. "The fact that we have successfully transported over 1 million tons of crude oil demonstrates the high level of cooperation we have received from the authorities in both Georgia and Azerbaijan," said Tapan. "We are looking forward to expanding our mutually beneficial relationship."

Notes to editors:

Tengiz's pipeline exports are currently limited by Russian pipeline capacity to about 3.5MM tons per year. In order to have the optimum production available for transport when the Caspian Pipeline is completed, various alternative routes and methods of selling oil have been and continue to be devised. For example, Tengizchevroil currently ships by railroad to Finland and Odessa; ships by barge through the Volga/Don canal; and ships by railroad through Georgia and Azerbaijan.

Updated: March 1998