press release

ChevronTexaco and Dynegy Agree to Transition of Natural Gas Purchase and Sale Agreements

ChevronTexaco will Re-enter the Wholesale Natural Gas Business

HOUSTON, Jan. 17, 2003 -- ChevronTexaco (NYSE: CVX) today announced that it has reached agreement with Dynegy (NYSE: DYN) to end existing natural gas purchase and sale contracts and other related contracts effective Feb. 1, 2003. As part of the agreement, Dynegy will provide ChevronTexaco with transition services, including agency arrangements, scheduling, invoicing, and accounting, through March 31, 2003, while ChevronTexaco re-enters the wholesale natural gas marketing business. ChevronTexaco's new wholesale natural gas marketing unit, ChevronTexaco Natural Gas, will be fully operational for April business.

"The cooperative effort by which this change took place is gratifying and will ensure a seamless transition. We are looking forward to re-establishing ourselves in the domestic wholesale natural gas marketing business," said Ray Wilcox, vice president of ChevronTexaco Corp., and president of ChevronTexaco North America Upstream. "Our large equity supply base coupled with our financial strength puts us in position to be a strong player in the North American market."

Dynegy Marketing and Trade has been purchasing substantially all of ChevronTexaco's lower-48 U.S. natural gas production -- well over 2 billion cubic feet per day -- and supplying the natural gas requirements of ChevronTexaco's downstream and power facilities through the agreements. The agreements were scheduled to run through August 2006. Dynegy asked ChevronTexaco to consider an early end to the agreements after Dynegy announced in October 2002 that it would exit the gas marketing and trading business. Dynegy has paid ChevronTexaco approximately $11 million in connection with the ending of the contracts and the transfer to ChevronTexaco of certain third party contracts.

The agreement announced today does not involve the natural gas processing and liquids agreements between Dynegy Midstream Services and ChevronTexaco, which will continue as an ongoing commercial relationship.

Cautionary Statement Relevant to Forward-Looking Information for the Purpose of "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995.

This news release contains forward-looking statements about the termination of natural gas purchase and sale contracts with Dynegy and the company's plans to re-enter the wholesale natural gas marketing business. These statements are based on management's current expectations, estimates and projections; are not guarantees of future performance; and are subject to certain risks, uncertainties and other factors, some of which are beyond our control and are difficult to predict. Among the factors that could cause actual results to differ materially are the company's ability to successfully re-establish itself in the wholesale natural gas marketing business and the associated costs, the ability to effectively transition from the contracts with Dynegy, changes in commodity prices for natural gas, and changes in general economic conditions. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, ChevronTexaco undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Updated: January 2003