press release

Chevron Press Release - Chevron President Praises Progress In Caspian Pipeline

SAN FRANCISCO, April 16, 1999 -- Dick Matzke, director of Chevron Corp. and president of Chevron Overseas Petroleum Inc., today praised the excellent progress being made by the Caspian Pipeline Consortium (CPC) with the historic Marine Terminal groundbreaking ceremony scheduled for May 12 in Krasnodar, Russia.

"CPC is viewed closely by the international investment community as a model of cooperation and development in the former Soviet Union, and the progress made to date is impressive," said Matzke.

Approximately $1.5 billion worth of contracts have already been bid and/or awarded. "The awarding of the pipeline construction contract is imminent, and the Marine Terminal groundbreaking will be the official kickoff for the construction phase," added Matzke.

"CPC is mutually beneficial for the governments as well as the participating companies," said Matzke. "The Tengiz field in Kazakhstan, in which Chevron has a 45 percent interest, will be the primary source of crude oil for the CPC pipeline. In addition, the construction contracts have a large Russian content, with contracts awarded to companies such as Kubanneftegastroi (Krasnodar), Stavropoltruboprovodstroi (Stavropol), and ZAO ‘Koksokhimmontazh.'

"We are very pleased with the contract bidding process. The process has been based on competitive prices combined with the quality, technical, and safety performance of the companies. The large Russian content in CPC is due to the high quality of the Russian goods and services as well as the support of industry leaders, such as Vagit Alekperov of Lukoil," added Matzke.

Together, Tengiz and the CPC will directly and indirectly add more than $150 billion to the combined gross domestic product of Russia and Kazakhstan over the life of the projects. In addition, the implementation of both the CPC project and the Tengiz operations will sustain on average over 200,000 jobs annually (directly and indirectly) during their life.

Chevron has a 15 percent equity interest in CPC. The other interest holders are as follows: Russian Federation - 24 percent, Republic of Kazakhstan - 19 percent, Sultanate of Oman - 7 percent, LUKArco B.V. - 12.5 percent, Rosneft-Shell Caspian Ventures Limited - 7.5 percent, Mobil Caspian Pipeline Company - 7.5 percent, Agip International (N.A.) N.V. - 2 percent, BG Overseas Holdings Limited - 2 percent, Kazakhstan Pipeline Ventures L.L.C. - 1.75 percent, and Oryx Caspian Pipeline L.L.C. - 1.75 percent.

Updated: April 1999