press release

Chevron Press Release - Chevron Completes Acquisition In Caspian Pipeline Consortium

SAN FRANCISCO, May 16, 1997 -- Chevron announced that as of today it has acquired a 15 percent ownership in the restructured Caspian Pipeline Consortium (CPC). Completion of the consortium's restructuring agreement is to be celebrated today at a ceremony in Moscow.

The Tengizchevroil (TCO) joint venture, in which Chevron has a 45 percent interest, will be the principal shipper for the 900-mile (1,500-kilometer) crude oil pipeline to be constructed from the Tengiz oil field in western Kazakhstan to the Russian Black Sea coast.

This transfer of ownership follows the Dec. 6, 1996, signing in Moscow of the agreement restructuring CPC to include private oil companies in the pipeline project.

Upon completion of the $2 billion construction project, scheduled for year-end 1999, the pipeline will commence export operations. With upgrades, CPC will ultimately allow the export of 67 million tonnes per year or 1.5 million barrels per day from the region.

As the largest oil company shareholder in CPC, Chevron will be able to fully develop Tengiz for the TCO joint venture to reach peak production of 700,000 barrels per day, expected by 2015.

Recent government decrees signed by Russia's President Boris Yeltsin and Prime Minister Viktor Chernomyrdin in Moscow, and Kazakhstan's President Nursultan Nazarbaev and Prime Minister Akezhan Kazhegeldin in Almaty, approved the CPC restructuring agreement.

"The finalization of CPC as a model project in the former Soviet Union offers mutual benefits for the governments involved as well as for the private sector," said Richard Matzke, director of Chevron Corp. and president of Chevron Overseas Petroleum Inc. "The pipeline is a key to unlocking the energy resources in the region by providing a major outlet to the world market," added Matzke.

Today's acquisition finalizes the transfer of interests in CPC from its founding members Russia, Kazakhstan, and Oman to the oil companies who will be financing the project. The owners and their equity interests are: the governments of Russia (24 percent), Kazakhstan (19 percent) and Oman (7 percent), as well as Chevron (15 percent), LUKARCO (12.5 percent), Rosneft-Shell (7.5 percent), Mobil (7.5 percent), Agip (2 percent), British Gas (2 percent), a joint venture between Amoco and the new national company Kazakhoil (1.75 percent), and Oryx (1.75 percent).

Updated: May 1997