press release

Chevron Press Release - Chevron Finalizes Additional Stake In Tengiz Joint Venture

SAN FRANCISCO, Aug. 29, 2000 -- Chevron announced today that it has completed the purchase of an additional 5 percent stake in the Tengizchevroil (TCO) Joint Venture in western Kazakhstan from the Republic of Kazakhstan. The action concludes an agreement signed by the two parties last May and increases Chevron's equity interest in TCO from 45 percent to 50 percent.

Signing TCO Agreement

Signing the treaty: E.N. Zana (left), Managing Director of Chevron's Eurasia Business Unit; Deputy Prime Minister D. Akhmetov. Looking on, from left to right: U.S. Ambassador to Kazakhstan Richard Jones, Chevron CEO David J. O'Reilly, U.S. Energy Secretary Bill Richardson, Prime Minister Kasymzhomart Tokayev, and Minister of Energy, Industry and Trade Vladimir Shkolnick.

Prime Minister Kasymzhomart Tokayev, U.S. Secretary of Energy Bill Richardson and Chevron Chairman Dave O'Reilly witnessed the formal signing of transfer documents at a ceremony in the Republic's capital city of Astana.

"Chevron and the Republic of Kazakhstan have worked hard to make TCO the bellwether project in Kazakhstan," said O' Reilly. "This additional 5 percent acquisition by Chevron shows the confidence which the government has in our ability to increase the value of TCO, and we're up to that challenge."

Since its inception in 1993, the joint venture has increased production at the Tengiz Field from 60,000 barrels per day (bpd) to about 215,000 bpd. A recently completed expansion project is expected to increase production to 260,000 bpd by the fourth quarter this year, supporting one of Chevron's key goals -- to increase its worldwide oil production.

"Even with the extensive expansion at TCO," O'Reilly said, "safety remained our top priority. TCO employees recently passed 10 million man-hours without a lost-time incident, which is truly a world-class accomplishment."

Richard Matzke, Chevron's vice chairman, added, "One of our earliest goals in TCO was to provide more jobs to Kazakh citizens. Today, about 70 percent of TCO's employees are Kazakh citizens, up from 50 percent at the start of the venture, and we're headed to 80 percent. We're also confident that TCO's aggressive objective of growing its use of Kazakh goods and suppliers will continue to be successful."

The Tengiz Field, which has estimated potential recoverable reserves of six to nine billion barrels of oil, will be primary beneficiary of the Caspian Pipeline Consortium, which is building a major pipeline from the Tengiz Field to the Russian Black Sea port of Novorossiysk. Construction of the $2.5 billion pipeline continues on schedule, and expenditures recently passed the $1 billion milestone. Pipeline start-up is scheduled for mid-2001.

The other stakeholders in Tengizchevroil are Kazakhoil, 20 percent; ExxonMobil, 25 percent; and LUKARCO, 5 percent.

Updated: August 2000