press release

Chevron Press Release - Chevron to Acquire Two New Double Hull Tankers

SAN FRANCISCO, March 12, 2001 -- Chevron Shipping Co., LLC, today announced it has signed final agreements with Mitsui & Co., Ltd., Mitsui & Co. U.S.A. and Samsung Heavy Industries Co., Ltd., of Korea to acquire two new double hull crude oil tankers. The Aframax, or medium-sized, tankers will be built in Samsung's Koje Island yard. Delivery is expected during the first half of 2003. Financial details were not disclosed.

Discussions between Chevron and Samsung were under way when Mitsui joined the two companies late last year. Chevron had been seeking to increase its controlled tonnage in the Aframax market sector for trading flexibility and to hedge market rate volatility. Chevron has had a close relationship with both companies through the years.

"I'm very pleased to further the longstanding relationship we have enjoyed with both Mitsui and Samsung," said Tom Moore, president of Chevron Shipping Co. "We look forward to adding these two state-of-the-art tankers to our controlled trading fleet.

"Increasing safety, while improving operational efficiencies and cost effectiveness, is consistent with our strategy to meet Chevron's marine transportation needs," says Moore. "When these ships are delivered, 80 percent of Chevron's fleet will consist of double hull tankers."

Mitsui will take ownership of the vessels and Chevron will charter the vessels for 10 years with options to extend out to 15 years. This will bring the total number of ships built for Chevron by Samsung to seven and will bring the total number of Chevron vessels where Mitsui has had a significant financial interest to 17.

During the design phase, Chevron emphasized that the highest quality materials, accommodations and state-of-the-art safety equipment would be part of the final specifications.

Jun Tashiro, executive managing director of Mitsui, said, "We are pleased to have reached another milestone in our relationship with Chevron as we continue in our role of providing innovative financial and ownership solutions for Chevron's marine transportation needs."

C.G. Cho, senior vice president of Samsung Heavy Industries, said, "As a world-class shipbuilder that has produced more than 50 Aframax tankers, Samsung is pleased to have this opportunity to provide additional high quality vessels to Chevron and Mitsui."

Updated: March 2001