press release

Chevron Press Release - Chevron Announces A New Crude Oil Discovery In South China Sea

SAN FRANCISCO, Oct. 10, 1996 -- Chevron today announced a new discovery of crude oil in the prolific Huizhou area in tract 16/08 in the Pearl River Mouth Basin of the South China Sea. Chevron, along with the China National Offshore Oil Corp., Agip, and Texaco, constitute the CACT Operators Group.

The discovery well, designated Huizhou (HZ) 32-5-1 (previously named HZ/26-1 SE-1), encountered multiple oil-bearing sands and tested three zones, two of which were successful and which yielded crude oil at a combined rate of 6,900 barrels per day.

Richard Matzke, president of Chevron Overseas Petroleum Inc., noted the "Huizhou 32-5-1 represents the latest in a series of crude oil discoveries which began in 1985, and is a real credit to the ongoing efforts by the CACT consortium to enhance offshore development in China." CACT's total production from four fields in the Pearl River Delta reached record levels of 120,000 barrels per day.

Matzke pointed out that the new discovery was drilled in the same exploration and producing area as the Huizhou 32-2 and 32-3 oil fields brought onto production last year, and lies only 2.3 miles (3.7 kilometers) southeast of the Huizhou 26-1 oil field, which was brought onto production in 1991 and serves as a gathering point for the area's oil fields. He said that further appraisal of the HZ/32-5-1 discovery will be conducted in early 1997, following the interpretation of a recently acquired 3-D seismic survey.

"The production could be tied to the Huizhou 26-1 platform using a number of development possibilities if the appraisals determine that this new discovery is of a commercial nature," Matzke said.

Notes to editors:

Agip, Chevron and Texaco formed the ACT Operators Group in 1983 to develop hydrocarbon resources offshore China in the Pearl River Mouth Basin of the South China Sea. Effective Jan. 1, 1996, CNOOC formally joined the ACT Operators Group, and the new joint operating group changed its name to the CACT Operators Group. Agip, Chevron and Texaco each hold a 16 1/3-percent interest in the South China Sea oil fields, with CNOOC holding the remaining 51 percent.

Updated: October 1996