press release

Chevron Press Release - Chevron Announces the Discovery of a Crude Oil Field Offshore Thailand

This is news concerning Chevron but issued by a Chevron subsidiary, Chevron Offshore (Thailand) Ltd., and archived here for record purpose.

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BANGKOK, March 19, 2001 -- Chevron today announced the discovery of the Chaba field 225 miles South of Bangkok in the Gulf of Thailand. The discovery of Chaba is significant in that the field holds predominantly crude oil in what traditionally has been a gas-prone area.

Chevron Offshore (Thailand) Ltd. has drilled a total of three successful wells on Chaba (formerly known as Kung), which is located in the southern portion of the Chevron-operated B8/32 offshore concession.

The discovery well, designated Kung 2, was drilled to a measured depth of 10,775 feet in 240 feet of water, and identified 120 feet of oil and 12 feet of gas in six reservoirs.

A second successful well, Kung 6, was drilled to a depth of 9,413 feet and was tested and flowed on a restricted choke at a rate of over 3,200 barrels of oil per day from two zones. Kung 6 discovered more than 160 feet of oil and gas in nine reservoirs.

The third well, Kung 7, drilled to a depth of 9,235 feet, discovered almost 200 feet of oil and gas in five major reservoirs. Future wells drilled in the new field will be named Chaba.

"This latest exploration success is particularly notable in that it further confirms the crude oil reserves potential of the Gulf of Thailand, an area historically known for its reserves of natural gas," said Jay Pryor, managing director of Chevron Offshore (Thailand) Ltd. (COTL).

Pryor noted that Chevron, as operator of the concession, completed the Chaba flow test using the latest state-of-the-art "mono-bore" technology -- the first time such technology has been employed in Thailand.

"It was a technological experiment that paid off, resulting in cutting exploration costs by 52 percent over conventional techniques," said Pryor. "Our goal of locating and producing oil and gas reserves at lower cost will help strengthen Thailand's economy and maintain its energy independence."

Trem Smith, COTL's director of reservoir management and technology, stated that future plans for the Chaba field include a delineation drilling and evaluation program and development planning. He said he anticipates these programs will support the filing of an application for the Chaba Production License area.

Chevron and its Block B8/32 partners will maintain their aggressive strategy to increase oil production while continuing to increase production of natural gas reserves for the Kingdom of Thailand.

Chevron is operator of Block B8/32 and holds a 51.99-percent interest. Its partners in the consortium are Thaipo Ltd., a subsidiary of U.S. based Pogo Producing Co. (46.34 percent), and Palang Sophon Ltd. (2 percent).

Explanation of "mono-bore" technology:

The mono-bore drilling technology used by Chevron Offshore (Thailand) Ltd. drill its exploration wells is identical to the process used in completing a development well in the Gulf of Thailand.

A well is drilled to its target depth using a small-diameter bore (lower cost). Tubing is inserted into the well shaft and cemented in place. A subsurface-controlled subsurface safety valve (SCSSV) provides down-hole well control. A traditional surface-development well tree is installed at the surface to provide control. The tubing is then perforated to allow the well to be flow-tested through this assembly. Mono-bore technology saves considerable cost, hardware and rig time, but requires precise up-front engineering and planning to ensure the integrity of the system.

Mono-bore exploration and delineation wells can be drilled in substantially shorter time periods than their "traditional" larger hole counterparts, allowing the greatest opportunity to reduce costs. Chevron Offshore (Thailand) Ltd. has reduced its costs to drill exploration and delineation wells by almost 50 percent using this approach.

Updated: March 2001