press release

Chevron Press Release - Chevron and Schlumberger Team Up to Improve Reservoir Optimization

New joint research project aimed at software development

HOUSTON, Oct. 2, 2000 -- Chevron Corp. and Schlumberger Oilfield Services announced today they have launched a multiyear research project aimed at developing improved reservoir optimization software. The two companies will jointly own developed software and intellectual property resulting from this initiative.

"Our objective is to intersect with the rapid changes in work processes and information technology," said Don Paul, Chevron's vice president of technology. "Increasing business needs for improved reservoir management are requiring new capabilities to rapidly model complex reservoirs and development alternatives, and to update models with new data and interpretations. We believe this collaboration will allow us to develop a superior set of products and a modeling capability that neither would be able to accomplish individually."

Chevron and Schlumberger are initially dedicating an eight-person research team for the project. The team, based in Chevron's San Ramon, Calif., facilities, is initially researching new mathematical and software techniques to significantly speed reservoir simulation; improve the ability to more accurately model detailed geology and complex wells; increase the flexibility of the software to accommodate new physical descriptions; and adapt to advances in computing technologies.

Any software developed by the research effort and identified for use by third-party organizations will be commercialized by GeoQuest, the Schlumberger operating unit that develops integrated exploration and production software, as well as provides data management solutions to the industry.

"Our objective is to jointly develop software that advances the industry's ability to incorporate knowledge learned daily about the reservoir, and ultimately to improve recovery rates," said Thierry Pilenko, president of GeoQuest. "The combination of Chevron's experience in modeling and managing petroleum reservoirs around the world and Schlumberger's expertise in modeling and software development will enable both of us to maintain our leading positions in reservoir management technologies."

Although the ultimate objective of the research and development project will be to develop new software tools for use in Chevron's and Schlumberger's business operations and for marketing to third parties by Schlumberger, both parties expect to employ intermediate research results in their existing reservoir modeling products.

About the Organizations

Chevron, headquartered in San Francisco, Calif., is an international petroleum company, involved in every aspect of the industry, from exploration and production to transportation, refining and retail marketing, as well as chemicals manufacturing and sales. It is active in more than 90 countries and employs about 31,000 people worldwide. In the United States, Chevron is a leading marketer of petroleum products and the third largest producer of natural gas. Since January, Chevron has participated in the formation of five new Internet companies: Petrocosm, RetailersMarketXchange, Upstreaminfo.com, PetroCore, and Silicon Valley Oil Co. Chevron's revenue was $36.6 billion in 1999.

GeoQuest, an operating unit of Schlumberger Oilfield Services, is the E&P industry leader for the supply of integrated software systems and data management solutions to assist petroleum companies in optimizing the value of their oil and gas reservoirs. Schlumberger Oilfield Services, a business segment of Schlumberger Limited, is the leading supplier of services and technology to the international petroleum industry, with operating offices, service locations, and research and development facilities around the world. Schlumberger is a global leader in technical services spanning the oil and gas, utility, semiconductor, smart cards, network and Internet solutions industries. Schlumberger revenue was $8.4 billion in 1999. Schlumberger is on the Internet at www.slb.com

Updated: October 2000