press release

Chevron Press Release - Chevron And Sasol To Begin Design And Engineering

SAN FRANCISCO, April 15, 1998 -- Chevron and Sasol, the South African fuels and petrochemicals company, announced they have reached agreement to pool their resources to begin design and engineering for construction of a 20,000-barrel-per-day Gas-to-Liquids (GTL) products plant in Nigeria. The proposed GTL plant would be capable of converting natural gas into synthetic crude oil, which would be further processed into petroleum products -- principally high-quality, environmentally superior diesel and naphtha products.

The agreement, announced by Richard Matzke, a director of Chevron Corp. and president of Chevron Overseas Petroleum Inc., follows encouraging results from a recently completed commercial and technical evaluation. This agreement will incorporate proprietary technologies from the two companies, with Chevron providing its hydroprocessing ISOCRACKING™ technology, and Sasol contributing its Slurry Phase Distillate (SPD) Fischer-Tropsch technology.

"This partnership will provide the framework for a solid merger of two technologies to commercialize gas by producing cleaner-burning fuels -- a key step toward major environmental enhancements through reduced emissions," explained Matzke. "The prospects are bright for the viability of the plant in Nigeria and looking into the future, Chevron sees this new partnership as a cornerstone for future projects with Sasol -- including the possibility of expansion of this new technology to other worldwide applications," he added.

Pieter Cox, managing director and chief executive officer of Sasol Limited, said, "Sasol is delighted to join Chevron on this project, and were confident that our combined expertise in technology and hydrocarbon production will support a fruitful association utilizing the best of both companies." Sasol, headquartered in Johannesburg, South Africa, is a respected leader in state-of-the-art Fischer-Tropsch technology, and has been actively involved in developing new technologies for more than 30 years.

Matzke pointed out that the new processing technology has piqued the interest of the international financial community because of its potential to harness and utilize the worlds vast natural gas reserves by transforming them into fuels and other petroleum products more useful -- in some markets -- than the natural gas itself.

In addition, the proposed site for the new gas-to-liquids plant lies adjacent to the Escravos Gas Project, commissioned last year by Chevron Nigeria Ltd., the operator of the joint venture project with Nigeria National Petroleum Corp. Escravos is Nigerias first major gas plant dedicated to utilizing natural gas produced in association with crude oil. The recently completed first phase of the Escravos Gas Project and its subsequent expansions will ensure a reliable supply of clean, processed gas to feed the proposed GTL plant. By the year 2004 -- when the second and third phases are completed -- Escravos will be capable of harnessing for commercial use almost all of Chevrons associated gas production in the western Niger Delta.

Commenting on the proposed GTL plant, Chairman and Managing Director of Chevron Nigeria Ltd., George Kirkland, stated that "the GTL project would be an integral part of Chevrons long-term objectives to commercialize our gas reserves and eliminate flaring for the benefit of Nigeria and its people."

Notes to editors:

Sasol Limited is the second largest industrial company in South Africa. The company is active in coal mining, crude oil refining and fuel product marketing, synthetic fuel production, petrochemicals and petroleum exploration.

Updated: April 1998