press release

ChevronTexaco Establishes Financial and Operational Goals to Achieve Industry-Leading Performance and Top Shareholder Return

Sets $1.8 Billion Synergy Target; 2 to 3 percent Increase in Return on Capital Employed; Long-term production growth of 2.5 to 3 percent

NEW YORK, Nov. 19, 2001 -- ChevronTexaco Corp. today announced higher post-merger synergy goals and set other financial and operational targets that Chairman and CEO David J. O'Reilly termed "key markers on our continuing path to achieve the established objectives of superior performance and industry-leading Total Shareholder Return."

In a presentation to security analysts today, O'Reilly said that recurring synergies would be running at an annual rate of $1.8 billion by March 2003 and reaffirmed the company's original synergy target of $1.2 billion to be achieved within 6 to 9 months of ChevronTexaco's October 2001 merger closing.

Synergies will be up across the board with the biggest increase expected in the downstream sector. "Our thinking about downstream has advanced," said O'Reilly, "so that even without overlap we've found considerably more synergies by integrating on a global basis businesses that were previously operated regionally.

"We've also established aggressive goals for improving our return on capital employed," he said. "Return on Capital Employed (ROCE) is projected to grow by 2 to 3 percent in the 2003 to 2004 timeframe, with greater improvement projected in the years beyond," said O'Reilly.

O'Reilly said that oil and gas production would grow at an annual rate of 2.5 to 3 percent over the next five years. Production is projected to grow one percent in 2002 in part due to expected OPEC-related constraints. The company will focus short term on enhancing the performance of its upstream assets and will grow long term as a number of major development projects come on stream.

"Our goals are clear, realistic and achievable," said O'Reilly. "ChevronTexaco has the combination of people, partnership skills and focus on delivering superior performance to reach our goals and reward our shareholders," he said. "We're positioned today to compete more effectively across the globe in every sector of the industry. We delivered strong business performance in 2001 while we were focused on completing our merger, and we've hit the ground running for a rapid and smooth integration as a world-class global energy company."

Through merger integration planning, workforce reductions are now expected to number 500 more than projected in the October 2000 merger announcement when a reduction of 4,000 employees worldwide was estimated. At that time, the combined workforce of Chevron, Texaco and Caltex was 57,000 employees worldwide.

About ChevronTexaco's recent decision to invest $2.5 billion in Dynegy as that company plans a merger with Enron, O'Reilly said the decision reflected ChevronTexaco's strategy to increase investment in the growing energy convergence marketplace. "Our participation offers a combination of significant upside potential and terms that will protect our investment," he said. "And, we have full confidence in Dynegy's disciplined management approach to complete the merger and to build a new company into an industry leader." ChevronTexaco has an equity interest in Dynegy of about 26 percent.

"The improved synergy and ROCE targets are evidence of the rapid and effective integration we expect to achieve, and serve as cornerstones for growth in the future," O'Reilly said. "Our strategies balance a short term focus on improving returns and asset performance to emerge stronger and more competitive for long term growth."

ChevronTexaco Corp., the result of the October 2001 merger between Chevron Corp. and Texaco Inc., is a leader in the global energy business with wide-ranging activities in more than 180 countries. ChevronTexaco is the third largest energy company in terms of global oil reserves (8.5 billion barrels) and fourth largest in global oil and natural gas production (2.7 million barrels/day). It has capacity to refine more than 2.2 million barrels per day, sells more than 3.5 million barrels of refined products daily and has more than 25,000 retail outlets under the Chevron, Texaco and Caltex brands. It is the fourth largest company in the global lubricants business, is an industry leader in the power and gasification businesses and has extensive technology operations, ranging from core business research and development to e-business and venture capital activities.

CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This press release contains forward-looking statements relating to ChevronTexaco's operations that are based on management's current expectations, estimates and projections about the petroleum and chemicals industries. Words such as "goals," "targets," "expected," "projected," "potential," "strategy," and similar expressions are intended to identify such forward-looking statements. These statements 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. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. 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, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Among the factors that could cause actual results to differ materially are crude oil and natural gas prices; refining and marketing margins; chemicals prices and competitive conditions affecting supply and demand for aromatics, olefins and additives products; actions of competitors; the competitiveness of alternate energy sources or product substitutes; technological developments; inability of the company's joint-venture partners to fund their share of operations and development activities; potential failure to achieve expected production from existing and future oil and gas development projects; potential delays in the development, construction or start-up of planned projects; the ability to successfully integrate the operations of Chevron, Texaco and Caltex and realize the expected associated synergies; potential disruption or interruption of the company's production or manufacturing facilities due to accidents, political events or other unexpected damage; potential liability for remedial actions under existing or future environmental regulations and litigation; significant investment or product changes under existing or future environmental regulations (including, particularly, regulations and litigation dealing with gasoline composition and characteristics); and potential liability resulting from pending or future litigation. In addition, such statements could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed herein also could have material adverse effects on forward-looking statements.

Updated: November 2001