press release

ChevronTexaco and Repsol Sign Letter of Intent to Jointly Develop New Area in Venezuela's Orinoco Belt

SAN RAMON, Calif., March 31, 2005 -- ChevronTexaco Corp. today announced that its affiliate company in Venezuela signed a Letter of Intent with Spain's Repsol YPF to pursue with the government of Venezuela new joint development activities in Venezuela's prolific Orinoco Belt.

The signing was attended by representatives from Venezuela's Ministry of Energy and Petroleum and its national oil company, PDVSA, and representatives from the governments of Spain and the United States. ChevronTexaco's Chairman and Chief Executive Officer Dave O'Reilly and Repsol YPF's Chairman and Chief Executive Officer Antonio Brufau attended the ceremony on behalf of their respective companies.

It is envisaged that the project would include not only the development of a new Orinoco Belt area but also the production of extra-heavy Faja crude and the transportation of crude through a new regional pipeline. Completing the value chain, the project would include proposed new facilities in Venezuela to upgrade the crude to a high-quality syncrude or refined products.

Commenting on the new agreement, O'Reilly said, "Venezuela has long been a country of importance to ChevronTexaco and continues to play a significant role in the company's long-term strategic growth objectives. The signing of the Letter of Intent with Repsol YPF provides us with an opportunity to further enhance our existing portfolio in Venezuela and sets the stage for what we believe will lead to an even longer and lasting partnership. Equally, I'm very pleased that Repsol will be joining us in what could potentially be a multibillion dollar investment project."

The new activities, which will be aligned with Venezuela's current hydrocarbon laws, will be framed under the Venezuelan government's new energy policy and would utilize the latest technology for crude oil production and upgrading, including enhanced recovery processes.

Currently, there are four oil associations (international oil company partnerships) with PDVSA to develop the Orinoco Belt. They produce and transport extra-heavy crude oil of 8 degrees API to different upgraders (one for each association) located at the Jose Industrial Complex in the Venezuelan oriental coast. The upgraders improve the quality and gravity of the Orinoco Belt production from 16 degrees to 32 degrees API for further marketing to refineries around the world.

ChevronTexaco Corp. is one of the world's leading energy companies. With more than 47,000 employees, ChevronTexaco subsidiaries conduct business in approximately 180 countries around the world, producing and transporting crude oil and natural gas, and refining, marketing and distributing fuels and other energy products. ChevronTexaco is based in San Ramon, Calif. More information on ChevronTexaco is available at


Some of the items discussed in this press release are forward-looking statements about the company's proposed development activities in Venezuela. The statements are based upon 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 the company's control and are difficult to predict. You should not place undue reliance on these forward-looking statements, which speak only as of the date of the 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: March 2005