press release

ChevronTexaco Announces $8.5 billion Capital Spending Program for 2003

SAN RAMON, Calif., Jan. 29, 2003 -- ChevronTexaco Corp. today announced an $8.5 billion capital and exploratory spending program for 2003 including $1.6 billion in affiliates' expenditures.

"At the time of our merger, we promised significant capital synergies. This is the second consecutive year of delivering on that promise," said Chairman and CEO Dave O'Reilly. "Our 2003 program is 17 percent lower than pre-merger levels and reflects the continued rationalization of our capital program. This program fully supports our long-term strategies of pursuing high-return upstream growth projects and improving our global downstream and chemical business," he added.

Worldwide Upstream

Approximately 75 percent of total capital spending, or about $6.4 billion, will be invested in worldwide exploration and production, with $1.7 billion of that expended in the United States.

"Our large and diverse upstream portfolio allows us to high-grade our capital and exploratory program to focus on quality opportunities that support growth while improving overall returns," said Peter Robertson, ChevronTexaco's vice chairman. "We have the right people, technology, and world-class processes for selecting the best projects and executing them successfully," he added.

The worldwide upstream program includes significant spending on longer-term growth projects in:

  • Kazakhstan, where sustained development of the Karachaganak and Tengiz fields are expected to lead to production increases in 2003 and 2006, respectively;
  • Chad, where development of the Doba Basin will continue, and the associated Cameroon pipeline is expected to come on-line in 2003;
  • Nigeria and Angola, where ongoing investment is being made in near-shore producing fields, in deepwater development, and for facilities to commercialize associated gas and further reduce flaring;
  • Venezuela, where further development of the Hamaca Field and associated crude upgrading facility is expected to reach full commercial production in 2004;
  • Gulf of Mexico, where appraisal investment continues in our 2002 Tahiti discovery, with first production expected in 2007.

The upstream program also includes investments in ChevronTexaco's attractive exploration portfolio. A majority of the exploratory spending will be in the most promising areas in the deepwater Gulf of Mexico, Nigeria and Angola. In addition, ChevronTexaco will continue to develop its existing, diversified U.S. upstream portfolio with the goals of maximizing long-term cash flow and value.

Global Downstream

About $1.3 billion, or 15 percent of total spending, will be invested in global downstream -- over $300 million less than in 2002. Refining and marketing investments will total about $400 million in the U.S., and $700 million internationally. Transportation investments, including pipelines to support expanded upstream production, will total about $200 million. "The downstream capital program is primarily focused on improving safety, reliability and efficiency in existing facilities," said Pat Woertz, executive vice president of worldwide downstream. "This program supports our commitment to improving the competitive returns of our businesses," she added.

Chemicals and Other

Investments in power and related businesses will total about $300 million, down from about $600 million invested in 2002. Investments in chemicals will total about $300 million. The balance of $200 MM will be invested in emerging technologies, information technology infrastructure and other opportunities.

TOTAL C&E Spending for 2003 $B
U.S. Upstream 1.7
International Upstream 4.7
U.S. Downstream 0.5
International Downstream 0.8
Chemicals and Other 0.8
TOTAL 8.5
Affiliate (non-cash) (1.6)
Cash C&E 6.9

NOTICE

A conference call to discuss matters included in this press release, as well as ChevronTexaco's fourth quarter 2002 earnings and 2003 outlook, will take place on Friday, January 31, 2003, at 8:00 a.m. PST. The conference call will be available in a listen-only mode to individual investors, media and other interested parties under the "Investor Relations" heading. Additional financial and operating information is contained in the Investor Relations Supplement that is available under "Financial Reports" on the Web site.

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

Some of the items discussed in this press release are forward-looking statements about ChevronTexaco's planned capital and exploratory expenditure program for 2003. These statements are based on management's current expectations, estimates and projections. The statements included in this release 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. Based on such factors as economic conditions, third party decisions, new developments or the results encountered as work progresses, actual expenditures and the outcomes of the planned expenditure program could differ materially from what is expressed or forecasted in these forward-looking statements.

Updated: January 2003