press release

Chevron Press Release - Chevron And Nigerian National Petroleum Corp. Launch Major Initiative

GTL signing.jpg (27031 bytes)

From left to right: Ray Wilcox, managing director of Chevron Nigeria Ltd.; Jackson Gaius-Obaseki, managing director of NNPC; Alhaji Sule Lamido, Nigeria's minister of Foreign Affairs; Chief Arthur Mbanefo, Nigerian ambassador to the United Nations; Olusegan Obasanjo, president of Nigeria; Dave O'Reilly, chairman and CEO of Chevron Corp.; Thabo Mbeki, president of South Africa; Pat Davies, executive director of Sasol; Nkosazana Dlamini-Zuma, South Africa's minister of Foreign Affairs; Peter Robertson, president of Chevron Overseas Petroleum Inc.

NEW YORK, Sept. 8, 2000 -- Chevron and the Nigerian National Petroleum Corp. today announced the launch of a major initiative to convert natural gas into clean petroleum fuels and to significantly reduce the amount of gas being flared in their Nigerian joint venture operations.

Under the initiative, $2 billion will be invested in two projects--the Escravos Gas Project Phase 3 and the Escravos Gas to Liquids development, which are targeted for completion in 2005.

President Olusegun Obasanjo of Nigeria and President Thabo Mbeki of South Africa were present at a special ceremony in New York to mark the official kickoff of this strategic development in Nigeria.

The Escravos gas to liquids facilities will combine technology from Sasol, a South African-based leader in state-of-the-art Fischer-Tropsch technology, and Chevron, a leader in hydroprocessing technology. The projects will be built by Chevron and the Nigerian National Petroleum Corp. (NNPC) adjacent to the joint venture's existing operations at Escravos.

The Group Managing Director of NNPC, Jackson E. Gaius-Obaseki, represented his organization at the ceremony. Also present were Dave O'Reilly, chairman and chief executive officer of Chevron Corp.; Peter Robertson, president of Chevron Overseas Petroleum Inc.; and Ray Wilcox, managing director, Chevron Nigeria Limited. In attendance for Sasol Limited was Pat Davies, executive director.

The Escravos Gas Project Phase 3 will process nearly 400 million cubic feet a day of gas that is currently produced along with crude oil and then flared. The plant will extract about 15,000 barrels a day of natural gas liquids and prepare the natural gas as feedstock for the Escravos Gas to Liquids facilities, which will produce about 33,000 barrels per day of clean fuels, virtually free of sulfur, nitrogen and other pollutants. These fuels will be marketed primarily in Europe, allowing Nigeria to derive revenue from its large natural gas reserves, which are the eighth largest in the world.

"The gas projects are an integral part of Chevron's growth plans in Nigeria," said O'Reilly. "We're also excited about this initiative because of its double environmental benefits. First, we're putting out flares from our Nigeria operations, which will bring about a reduction in greenhouse gas emissions, and secondly, gas to liquids (GTL) products are expected to set new global standards for premium high performance, environmentally friendly fuels."

The first phase of the Escravos Gas Project was commissioned in May 1997 and processes about 150 million cubic feet per day of gas for domestic and regional markets. The second phase is expected to come on stream later this year, raising the processing capacity to about 300 million cubic feet a day of gas that otherwise would be flared.

"In addition to the significant environmental benefits of our gas projects, they also represent a major new investment in Nigeria's economy and will provide many jobs during the construction and operational phases," said Wilcox. "These projects are only possible through the cooperation and support of the Nigerian government and our partner, NNPC."

Also commenting on the development, Gaius-Obaseki said NNPC values its partnership in these projects and continues to look for these types of initiatives, which provide environmental and economic benefits to the people of Nigeria.

Davies expressed enthusiastic support for the global joint venture and Sasol's involvement with Chevron Nigeria and NNPC in this strategic project.

Sasol and Chevron announced in June 1999 their decision to create a global joint venture company to develop, implement and operate GTL ventures and market their products. This company would utilize the complementary skills and technologies of both partners. Formal announcement of the creation of the Global Joint Venture is expected shortly.

Updated: September 2000