press release

ChevronTexaco Ships First Oil Cargo from China's QHD 32-6 Oil Field

SAN FRANCISCO, Dec. 12, 2001 -- ChevronTexaco has achieved an important milestone with the shipment of its first cargo of crude oil from the QHD 32-6 oil field, 130 kilometers east of Tianjin, in China's Bohai Bay.

Approximately 500,000 barrels of 16.9-degree gravity API crude were offloaded from the 1 million-barrel-capacity Bohai Shiji ("Bohai New Century") floating, processing, storage and offloading (FPSO) vessel for tanker transport to international markets. The QHD crude is very low in sulfur and is the newest crude oil on the Asian market.

"We anticipate significant growth of production volumes of this type of crude from the Bohai Gulf area within the next five years, making this oil an important new energy source for Asia," said Sam Snyder, managing director of ChevronTexaco's China strategic business unit.

Current development of the QHD 32-6 oil field consists of 46 production wells aboard two wellhead platforms, with production transported to the FPSO through a single-point mooring system. First production flowed from QHD 32-6 beginning Oct. 8 of this year. Current production from the field is 29,000 barrels of oil per day (bpd). Full field development, with estimated average production of 65,000 bpd, is expected by October 2002, enabled by installation of up to 160 wells from six platform structures.

The QHD 32-6 field was discovered in 20 meters of water by the China National Offshore Oil Corp. (CNOOC) in 1995.

Partners in the QHD 32-6 field include the operator, CNOOC Ltd., with a 51 percent interest, and ChevronTexaco and BP, each with 24.5 percent. The parties executed the petroleum contract in September 1998.

"The business model represented by QHD 32-6 has been exemplary for CNOOC and its partners," remarked Peter Robertson, president of ChevronTexaco Overseas Petroleum. "Accomplishing installation and production from a project of this size, under budget and barely three years after finalizing the petroleum contracts, stands testimony to what can be achieved by a commitment to teamwork and partnership."

Robertson noted, "Our participation in the development and commercialization of QHD 32-6 marks yet another milestone for ChevronTexaco's long history of participation in China's energy industry, which began in 1913 with predecessor Texaco's first sale of kerosene for lamps and home heating use."

Since that first beginning, ChevronTexaco's involvement in China's petroleum sector has included: 32.67 percent partnership in the CACT Operators Group (CNOOC, Agip and ChevronTexaco); operator of the first offshore oil production project in the Pearl River Mouth Basin in the South China Sea (currently producing 84,000 bpd); licensing of Chevron's proprietary Vacuum Residue Desulfurization technology to Sinopec Qilu Petrochemicals in Shandong province; major licensor of foreign clean coal technology (the ChevronTexaco Gasification Process); operations of 45 Caltex-branded service stations in southern China; continuing successful oil exploration activities in the Bohai Gulf; as well as operations of a 100,000-metric-ton-per-year liquefied petroleum gas import facility (China's largest) in Shantou, Guangdong province; and a 100,000-metric-ton-per-year polystyrene plant in Zhangjiagang, Jiangsu province.

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 the development of and expected production from the QHD 32-6 oil field. These statements are based on management's current expectations, estimates and projections. The statements included in this release are not guarantees. Actual outcomes and results could differ materially from what is expressed or forecasted in these forward-looking statements.

Anticipated production from QHD 32-6 in the next five years includes production from reserve quantities that are not limited to "proved reserves." This is in contrast to reporting and discussions of reserve quantities in filings with the Securities and Exchange Commission (SEC). Reporting and discussions of reserve quantities in filings with the SEC is limited to "proved reserves" -- quantities of oil and gas reserves that the company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. Ultimate recovery of oil and gas quantities could differ materially from estimates.

Updated: December 2001