press release

ChevronTexaco Worldwide Power and Gasification and China Petroleum and Chemical Corporation (Sinopec) Announce Agreement on Technology License

BEIJING AND HOUSTON, Oct. 18, 2002 -- ChevronTexaco Worldwide Power and Gasification and China Petroleum and Chemical Corporation (Sinopec) announced today that ChevronTexaco proprietary gasification technology has been licensed for use at the Sinopec naphtha steam reformer plant in Jinling, China.

Revamping the Jinling plant with ChevronTexaco's gasification technology will allow the plant to replace its current naphtha feedstock with lower cost petroleum coke and coal feedstock. In addition to these cost savings, retrofitting the plant with gasification technology will generate significant environmental benefits. The gasification process converts the feedstocks to a clean gaseous mixture called synthesis gas or "syngas," which is similar to the syngas currently produced by the existing naphtha reformer, but gasification does so with significantly less air emissions than a naphtha reformer. This syngas is then used to produce ammonia and urea for use as fertilizer, plus hydrogen for use in an adjacent Sinopec refinery.

The project schedule calls for basic design to start this year for a planned start-up and commercial operation in 2005.

When completed, the new gasification facility at Jinling will generate sufficient synthesis gas to produce 300,000 metric tons/year of ammonia, plus 30,000 metric tons/year of hydrogen.

Change in the worldwide oil market in the past several years has presented fertilizer plants which use naphtha or residual oil as feedstock with increasing cost challenge. In order to change this situation, where a fertilizer plant which uses naphtha or residual oil as feedstock operates at a loss, Sinopec will revamp the fertilizer plant by replacing the current naphtha or residual oil with lower cost petroleum coke and coal feedstock. This agreement between Sinopec and ChevronTexaco will be the first such application of ChevronTexaco's coal gasification technology in Sinopec.

At a ceremony today in Beijing to formally announce the agreement, James C. Houck, president of ChevronTexaco Worldwide Power & Gasification said, "ChevronTexaco is committed to the successful implementation of the Sinopec Jinling project, and we look forward to expanding our cooperation with Sinopec as we look forward to a bright future for our efficient and environmentally friendly gasification business in China."

Mr. Cao Xianghong, the vice president of Sinopec, who also attended today's ceremony, along with many other dignitaries from Sinopec Jinling Plant and other Sinopec divisions, said, "The application of Chevron Texaco's gasification technology will allow Sinopec to replace higher priced naphtha with relatively low cost petroleum coke and coal to produce fertilizers as well as hydrogen for refinery upgrading, this will improve the competition ability of the Sinopec fertilizer plant."

The official agreement was signed by ChevronTexaco's subsidiary Texaco Development Corporation and Sinopec at the ceremony today and becomes effective at this same time.

Since 1978, ChevronTexaco's proprietary gasification technology has been chosen for sixteen projects in China, each producing syngas for fertilizer or chemical production, and doing so with both economic and environmental benefits as compared to alternative technologies. Eleven of these licensed gasification plants are currently in operation, with five more in engineering or under construction.

Editor's Note

ChevronTexaco is a world leader in the development and application of gasification technology. Many of the world's most successful chemical, refining and power companies now use ChevronTexaco's proprietary gasification technology which, in addition to its economic and environmental advantages, is also regarded as both unique and versatile. Because of its flexibility, it can be applied to small-or large-scale projects and a wide range of solid, liquid, and gaseous materials can be used as feedstocks.

ChevronTexaco is also 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 and gas reserves (more than 11 billion barrels of oil and gas equivalent) and fourth largest in global oil and natural gas production (2.7 million barrels of oil and gas equivalent per day). It has the capacity to refine more than 2 million barrels per day, sells more than 5 million barrels of fuel and products daily and owns or has interest in more than 25,000 retail outlets under 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

Sinopec Corp. is a vertically integrated energy and chemical company. The scope of business covers exploration, development, production and marketing of petroleum and natural gas, refining and marketing, production and sales of petrochemicals, chemical fibers, chemical fertilizers, and other chemicals, storage and pipeline transportation of petroleum and natural gas, import and export and import/export agency business of petroleum, natural gas, refined oil products, petrochemicals, chemicals, and other commodities and technologies, research and development and application of technology and information. It is China's largest producer and marketer of oil products (both wholesale and retail of gasoline, diesel, jet fuel), and No.1 supplier of major petrochemical products (intermediates, synthetic resin, synthetic fiber, synthetic rubber, fertilizer) as well as the 2nd largest oil producer. In 2001, the Company's oil production was 37.9 million tons, gas 4.54 billion cubic meters, incremental proven oil reserve 210 million tons, recoverable oil reserve 40 million tons, proven gas reserve 52 billion cubic meters, recoverable gas reserve 27.4 billion cubic meters, refining throughput 101.41 million tons, oil products 61.16 million tons, ethylene 2.15 million tons, synthetic resin 3.196 million tons, synthetic fiber 1.03 million tons, monomers for synthetic fiber 1.99 million tons, polymers 1.61 million tons, synthetic rubber 400,000 tons. The annual sales of oil products 67.8 million tons, accounting for 60 percent of the country's total consumption, and 65 percent of retail market share in the principal market.

Following international models, the company has set up a new, standardized structure of corporate governance, with centralized decision-making, delegated authorities in management, and business operations handled by specialized business units. Sinopec Corp. has more than 70 subsidiaries, either wholly-owned, or with equity participation, including majority controlled, in exploration and production, refining, chemicals, marketing, research and foreign trade. Most of the Company's assets and principal market is situated along China's most developed eastern, southern and central areas.

Sinopec Corp. sticks to the philosophy of open and competition. To maximize profits and deliver superior shareholder return is the Company's guiding objective and the operating mechanism is market-oriented externally, achieving synergy internally and the operating principle is standardization, discipline and integrity. Our target is to build Sinopec Corp. into an internationally competitive, world-class, integrated energy company with prominent core business, quality assets, innovative technologies, advanced management and sound financial practice. View the Sinopec Web site at: www.sinopec.com.cn (opens a new browser window).

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 expansion of gasification licensing projects in China. These statements are based on management's current expectations. The statements included in this release are not guarantees. Actual outcomes and results could differ materially from what is expressed in these forward-looking statements.

Updated: October 2002