press release

Chevron Signs Agreement for New Tract In South China Sea

CHEVRON SIGNS AGREEMENT FOR NEW TRACT IN SOUTH CHINA SEA

SAN FRANCISCO, Aug. 9. 1995 -- Chevron Overseas Petroleum Limited today announced it has signed a two-year geophysical agreement with the China National Offshore Oil Corporation (CNOOC) to explore a highly prospective area of the South China Sea.

Geophysical studies will begin early next year on the 1,300-square-mile (3,300 sq. km.) offshore tract, designated Block 50/20 and located in a gas-prone area of the South China Sea approximately 60 miles (100 kilometers) southwest of Hainan Province. In the event the technical results are positive, Chevron will have the option to negotiate a petroleum agreement with CNOOC. A neighboring exploration block, 62/23, was granted to Chevron earlier this year.

Wang Yan, president of CNOOC, said of the occasion, "Chevron has commendable technical expertise to use in advancing sustainable development for China. This new agreement is sure to benefit the growing industry base in southern China in an environmentally sensitive way while strengthening the working relationship between our company and one of America's leading energy firms."

Richard Matzke, president of Chevron Overseas Petroleum, noted, "This new agreement bolsters our excellent relationship with China, and adds to Chevron's significant presence in the country."

Chevron is one of three joint operators of China's largest offshore oil operation, which produces over 100,000 barrels of crude oil per day from the Pearl River Mouth Basin. During 1995, two additional oil fields were brought onstream, raising production to record levels.

In addition to its exploration and producing activities in China, Chevron companies are active in crude oil and products trading, chemicals marketing and technology transfer for refinery operations. Through its 50-percent owned affiliate, Caltex Petroleum Corporation, the company is also involved in retail gasoline marketing and lubricating oil blending.

NOTE TO EDITORS: Chevron has been a member of the ACT Operators Group with partners Texaco and Agip, and in association with CNOOC, since 1983, That year, ACT drilled its first well, which resulted in a crude oil discovery offshore Shekou in the Pearl River Mouth Basin of the South China Sea. The consortium brought its first offshore oil field, Huizhou 21-1, onto production in 1990, followed by a second field, Huizhou 26-1, in 1991.

In addition, Chevron announced Feb. 15 that it has begun drilling a wildcat well in another new exploration block located approximately 250 miles southeast of Shanghai in an offshore tract (Block 33/08) in the East China Sea.

Updated: August 1995