press release

Chevron Press Release - Chevron Produces First Oil From Papua New Guinea's Gobe Fields

SAN FRANCISCO, March 9, 1998 -- Chevron announced today that crude oil began to flow from the Gobe oil development project in Papua New Guinea (PNG). Initial production from the onshore project flowed yesterday at a combined rate of 10,000 barrels per day (bpd), and is expected to reach 50,000 bpd by mid-year.

The Gobe development consists of two separate oil fields with separate ownership percentages:* South East Gobe and Gobe Main. They are located about 50 miles (80 kilometers) south-east of Lake Kutubu and were discovered in 1991 and 1994, respectively. South East Gobe is PNG's first unitized oil field. Reserves from the combined fields are currently estimated at 100 million barrels.

The Gobe complex is the second full-scale oil project to be developed in Papua New Guinea by Chevron, the country's sole oil operator. Gobe follows the successful development of the Kutubu Project, which -- until today -- held PNG's first and only producing oil fields.

"Gobe is the second step in the long-range plan to develop Papua New Guinea's oil reserves, and further demonstrates Chevron's commitment to the development of this country's natural resources," said Richard Matzke, a director of Chevron Corp., and president of Chevron Overseas Petroleum, Inc.

"Since Gobe lies in relatively close proximity to Kutubu, it is well situated to be tied into the existing export pipeline," said Larry Barthold, managing director of Chevron Niugini Pty. Ltd., the unit of Chevron Overseas Petroleum, which operates the Kutubu and Gobe fields.

"The existing infrastructure can be used to economically develop potential future prospects," said Barthold, pointing out that combining Gobe Main and South East Gobe into one integrated development project enhances the economics of building additional infrastructure to bring these fields -- and eventually more remote fields -- onto production.

Chevron holds interests in and is operator of the Kutubu field -- which has produced 220 million barrels of oil since it was brought onstream in 1992. Successful application of horizontal well technology proved to be a significant contributing factor to Kutubu's 36-million-barrel increase in recoverable reserves.

Chevron also operates the Moran field approximately 7.5 miles (12 kilometers) to the north of the Kutubu Project facilities. As part of the field appraisal program and due to the proximity of the existing Kutubu infrastructure, Chevron successfully constructed and started an extended well test (EWT) from the first two Moran wells earlier this year, which indicates estimated reserves of up to 100 million barrels. Chevron expects to bring Moran onto full field production in the fourth quarter of 2000.

Combined production from the Kutubu, Gobe and Moran EWT is expected to reach a peak of 122,000 barrels of oil per day in 1999.

Note to Editors:

Interests held in the joint venture projects are:

(PDL 4 License Interest)
(PDL 3 / PDL 4 Unit Interest)
Chevron Niugini Pty Limited (Operator) 19.375000 Percent 10.656250 Percent
Ampolex (Highlands) Pty Limited (Mobil) 16.455575 Percent 09.050566 Percent
BHP Petroleum (PNG) Inc. 09.687500 Percent 05.328125 Percent
Oil Search (Gobe) Pty Limited 27.138175 Percent 21.900996 Percent
Merlin Petroleum Company (Japan PNG Petroleum) 04.843750 Percent 02.664063 Percent
Orogen Minerals (Gobe) Pty Limited 20.500000 Percent 20.500000 Percent
Petroleum Resources Gobe Pty Limited 02.000000 Percent 02.000000 Percent
Barracuda Pty Limited (Santos Group) 06.975000 Percent
Mountains West Exploration, Inc. 00.871875 Percent
Cue PNG Oil Company Pty Limited 02.441250 Percent
Southern Highlands Petroleum Co., Ltd 17.611875 Percent

Updated: March 1998