press release

Chevron Press Release - Chevron And Lukoil Sign Framework Agreement For Crude Oil Purchases

MOSCOW, July 1, 1994 -- Chevron International Oil Company (CIOC) and LUKoil, the largest oil company in the Russian Federation, signed a framework agreement here today outlining the terms by which Chevron will purchase approximately 70,000 barrels per day of Urals Blend crude oil from LUKoil. Over the eight-year life of the agreement, Chevron's purchases of Urals Blend crude oil, intended for the export market, could total approximately 180 million barrels (about 24 million tons).

The LUKoil/Chevron crude oil purchase framework is expected to allow immediate implementation of Mitsui's $700 million (U.S.) loan to LUKoil. The loan will be used for the enhancement and redevelopment of LUKoil's producing properties by importing advanced-technology equipment to rehabilitate idle oil wells and expand LUKoil's producing activities through the drilling of new wells in existing oil fields. The loan is supported by the Japan Ex-Im Bank.

Al Caccamo, president of CIOC, said from the company's San Francisco headquarters, "We are pleased to focus on Russia, and we are confident that Chevron's involvement in this project will help foster increased confidence by Western investors and thereby promote enhanced economic growth in the Russian Federation."

Vagit Alekperov, president of LUKoil, said, "The framework agreement with Chevron is in keeping with LUKoil's strategy aimed at attracting foreign investment for the future growth of the company and the upgrading of petroleum production."

The Russian Federation in particular, and the Commonwealth of Independent States (C.I.S.) are important growth areas for Chevron. The company is acutely interested in participating in projects which support Russia's goals to rehabilitate and enhance its crude oil production, and which maximize opportunities to develop and strengthen mutually beneficial associations with progressive multinational companies like LUKoil and Mitsui.

LUKoil Petroleum Company seeks to strengthen its position in the Commonwealth of Independent States in the belief that through cooperation with major multinational companies -- such as Chevron and Mitsui -- Russia's petroleum production will cross a new frontier and make the country more prosperous.

Updated: July 1994