press release

Chevron Press Release - Chevron Announces $6.3 Billion Capital Program, $2 Billion Stock Repurchase Plan

SAN FRANCISCO, Dec. 19, 1997 -- Chevron Corp. today announced that its Board approved a new program to repurchase up to $2 billion of common stock and a $6.3 billion capital and exploratory spending program for 1998, the largest in company history.

The company also said operational earnings for 1997 are expected to set a new record, exceeding the previous high of $2.65 billion set last year. Earnings for 1997 will be announced in late January.

And the company announced four developments from its worldwide oil operations:

* Discovery of a second giant oil field in Angola's offshore Block 14, adjacent to another giant field discovered earlier this year;

* First production of oil from the offshore Kitina Field in the Republic of Congo;

* An agreement to extend a services contract with Kuwait to assist in development of the Burgan Field, the world's second largest;

* A new production rate of 90,000 barrels per day (bpd) from the giant Boscan Field, operated by Chevron in Venezuela, exceeding the target by about 10 percent.

"The repurchase program and capital budget reflect our optimism about creating greater value for Chevron shareholders," said Chairman Ken Derr. "The stock repurchase plan will reduce the number of outstanding shares, increasing share value for remaining shareholders, while our large capital budget reflects the wealth of attractive investments we have around the world."

The stock repurchase will assist in maintaining a desired capital structure by providing shares for the company's employee stock option programs.

"In addition," said Derr, "the program reinforces our belief that purchase of our stock is an attractive investment for the company and for shareholders."

The stock repurchases may be made from time to time in the open market or otherwise at prevailing prices as permitted by securities laws.

The new Angola discovery was made in Block 14, where the first giant discovery was made last April.

"We are delighted with these findings," said Dick Matzke, president of Chevron Overseas Petroleum Inc. and a Chevron director. "And we have drilled several other wells in Block 14 which give promise of even more discoveries."

Last week, Chevron began production from the Kitina Field, located west of the Congolese city of Point Noire in the Marine VII permit. The field is expected to reach peak production of 50,000 bpd by the end of 1998. Chevron has a 29 percent interest.

"The Kitina facilities will handle additional production from several new satellite fields, most notably Kitina South, which will begin producing as early as mid '98," said Matzke.

In Kuwait, Chevron has been providing technical assistance in the development and transportation of oil from the supergiant Burgan Field for more than three years. Chevron and Kuwait have now agreed to extend the services agreement for another three and a half years. Chevron has about 30 engineers and geoscientists in Kuwait providing training, technology and managerial assistance.

Chevron's $6.3 billion capital and exploratory budget for 1998 represents the fourth consecutive year of an increase in the program.

The company plans to invest nearly $4 billion, or 63 percent of the total, in worldwide exploration and production. Consistent with the company's strategy to grow its international upstream business, about $2.5 billion of these expenditures will be made outside the United States.

Strong opportunities also exist in the United States and the company plans to invest about $1.5 billion in U.S. exploration and production.

The worldwide exploration and production program includes major projects in:

--Kazakhstan, where expanded capacity at the Tengiz Field will come on stream in mid-1998, bringing production from the current 160,000 bpd to about 187,000 bpd. An additional expansion is under way to bring capacity to 240,000 bpd at the turn of the century.

--West Africa, where Chevron-operated production has been increasing steadily in Angola and Nigeria, and is now about 440,000 bpd in each country.

--The deep-water U.S. Gulf of Mexico, where the Genesis platform, in water 2,600 feet deep, is expected to start production in December 1998. Chevron has a 57 percent working interest.

--The U.K. North Sea, where the Britannia field is scheduled to come on stream in mid-1998. Production is expected to peak in 1999 at 740 million cubic feet of gas and 70,000 bpd of condensate. Chevron's equity interest is about 30 percent.

--Canada, where the large Hibernia project offshore Newfoundland produced its first oil in November, ahead of schedule. Production is scheduled to exceed 100,000 bpd by year-end '98. Chevron's equity interest is 26.9 percent.

In worldwide refining, marketing and transportation, Chevron plans to invest about $1.1 billion, of which more than $600 million will be spent in the United States, including continuous upgrading of the company's service station network. The remainder will be invested outside the U.S. by Chevron's 50 percent-owned affiliate, Caltex.

Chevron plans to invest about $800 million in the worldwide chemicals business in 1998, reflecting the company's belief that the chemicals business is a very attractive investment over the long term.

Updated: December 1997