press release

Chevron Press Release - Chevron Signs Accord With Azerbaijan To Hunt For Oil In Caspian Sea

WASHINGTON, Aug. 1, 1997 -- Vice President of the United States Al Gore and Azerbaijani President Heydar Aliyev presided over ceremonies here today where representatives of Chevron and the Republic of Azerbaijan signed documents paving the way for Chevron's first major oil venture in Azerbaijan.

Richard Matzke, president of Chevron Overseas Petroleum and a director of Chevron Corp., and Natik Aliyev, president of the State Oil Company of the Azerbaijan Republic (SOCAR), signed an agreement to explore Azerbaijan's Absheron Offshore Block, a deep-water geologic structure in the southern Caspian Sea.

"We are very pleased to be the company chosen to explore this highly prospective area of the Caspian Sea, and honored to become a partner in Azerbaijan's reemergence as a significant player in the international oil industry," said Matzke. "Chevron is eager to explore Absheron and to combine our technological experience with that of SOCAR to determine the potential of this challenging deep-water prospect," Matzke added.

Under terms of the agreement, Chevron will serve as operator in exploring the Absheron structure, first identified in 1960 through seismic surveys. Absheron, formerly known as the Tagiyev Block, lies in close proximity -- 40 kilometers southwest -- of Azerbaijan's giant Guneshli-Azeri-Chirag multi-oil field complex, and covers an area of approximately 160 square miles (400 square kilometers).Water depths vary from 800 feet to 2,100 feet (250 to 650 meters). Chevron will hold a 30 percent interest in the Absheron block.

Chevron will conduct a 3-D seismic program to augment data collected in the earlier surveys. Exploratory drilling is anticipated to begin in late 1999.

While exploration of the Absheron prospect represents Chevron's first major oil venture in Azerbaijan, the company has had a presence in the northern Caspian region through Tengizchevroil, the joint venture company which operates the Tengiz oil field in Kazakhstan. Chevron holds a 45 percent interest in Tengizchevroil, which currently ships more than 25,000 barrels per day (1.2 million tonnes per year) of crude oil through Azerbaijan. The oil, brought onshore at Baku, is then transported by pipeline and rail through Azerbaijan to the Georgian port of Batumi, where it is exported to world markets.

Notes to editors:

Azerbaijan is one of the oldest oil-producing regions in the world, experiencing its oil boom in the early 1900s. Production peaked at about 500,000 barrels a day in the mid 1940s, and fell significantly in the years following World War II. Some forty years later (1992), Azerbaijan's production stood at about 220,000 barrels a day. Industry estimates indicate that development of new fields in the Caspian Sea within the next 10 to 15 years could boost Azerbaijan's crude oil production to levels in excess of its mid-1940s all-time highs.

Updated: August 1997