press release

Chevron Press Release - Chevron Executives Meet With Venezuelas President-Elect Chavez

CARACAS, Jan. 7, 1999 -- In his first meeting with foreign representatives of the private sector, Seor Hugo Chavez Frias, president-elect of the Republic of Venezuela, hosted a meeting with Chevron executives here this week.

The Chevron delegation congratulated president-elect Chavez on his victory in the recent elections, wished him well with his new administration, and thanked Chavez for his appreciation of the efforts made by Chevron -- and by other international companies operating in Venezuela -- in its ongoing efforts to help maximize the potential of the country's oil and gas industry.

"We are honored to meet with Seor Chavez," said Richard Matzke, president of Chevron Overseas Petroleum Inc. and a director of Chevron Corp., who led the delegation.

The Chevron executives accompanying Matzke included Patricia Woertz, president of Chevron Products Co., William Edman, newly appointed president of Chevron for Latin America, and Jaime Varela-Walker, vice president of Chevron for Latin America and chairman of the International Petroleum Committee.

Following a discussion of Chevron's sizable investments in Venezuela in the company's ongoing producing activities in and around Lake Maracaibo, as well as a review of the recently completed joint-feasibility study by Chevron Chemical Co. and PDVSA to assess the viability of an aromatics project, Seor Chavez reiterated his intention that the new "government under Chavez" is looking forward to working with private-sector companies to develop new investment projects in Venezuela.

The Chevron delegation briefed the president-elect on the company's history in Venezuela and its current presence in the country, highlighting Chevron's operations in and around Lake Maracaibo -- particularly the company's effective results in enhancing crude oil production from the huge Boscan onshore oil field (an increase from 78,000 barrels per day in July, 1996, to the present rate of 103,000 barrels per day), and its producing activities in its recently acquired offshore permit, block LL-652, in Lake Maracaibo.

Matzke outlined approximate potential investment forecasts earmarked for Chevron-led, Venezuela-based projects over the lives of those projects: $2 billion overall for the Boscan endeavor (Ed note: Chevron has no equity interest in Boscan, but operates the field on behalf of the state-owned oil company, Petroleos de Venezuela, PDVSA); $2 billion for the LL-652 Project, 27-percent of which will be borne by Chevron; and a rough estimate of $1.5-billion which might be invested if further studies support the viability of investment in an aromatics project at Paraguana.

The Chevron executives, reiterating their company's commitment to do its part to support the development and growth of the Venezuelan oil industry, reflected on their early days in Venezuela. Matzke offered, "We feel as good about the potential of Venezuelan oil right now in '99 as we did back in '46 when Chevron discovered the Boscan oil field! Except today the outlook for growth is even more rosy, thanks to Venezuela's development of its people resources, its decision to reopen the oil industry to both international expertise and international funding, its import of cutting-edge technologies, and the renewed interest of the international investment community."

Notes to editors:

BOSCAN: Chevron discovered the Boscan oil field in 1946. Following nationalization of the Venezuelan oil industry in the mid-1970s, Chevron left the country, but was invited back into Venezuela in 1995 to assume operatorship of the Boscan oil field. In late '95, Chevron and Petroleos de Venezuela (PDVSA) formed an alliance to further develop Boscan. When Chevron assumed responsibility for Boscan production on July 1, 1996, the field was producing approximately 78,000 barrels of oil per day. Daily production now stands at approximately 103,000 barrels. Chevron has no equity interest in Boscan, an onshore field located on the western shore of Lake Maracaibo, but operates the field on behalf of PDVSA, the state-owned oil company.Boscan is estimated to have 1.6 billion barrels of recoverable reserves.

LL-652: In 1997, Chevron and three other international oil companies (Statoil, Arco and Phillips) were awarded rights to operate the LL-652 oil field, located offshore in the northeast section of Lake Maracaibo. The field is estimated to contain about 2.7 billion barrels of oil in place, with recoverable reserves in excess of 500 million barrels. In 1998, a development plan was approved by PDVSA to allow the partners to begin an extensive drilling program, install offshore platforms for handling gas produced in association with the crude oil, and implementation of a large-scale waterflood project to enhance production from the reservoir. When the consortium assumed responsibilities for LL-652, the field was producing about 8,400 barrels of crude oil per day; plans are to increase production to 115,000 barrels a day by the year 2007. Chevron holds 27 percent interest in the consortium.

Paraguana Aromatics Project: Chevron Chemical Co. recently completed a review of the project and is currently studying a broad spectrum of issues associated with the development of the proposed complex. Chevron Chemical looks forward to working with PDVSA to create a mutually beneficial plan to realize the potential of this petrochemical opportunity.

Updated: January 1999