press release

Chevron Press Release - International Consortium Operated By Chevron Wins Rights

SAN FRANCISCO, June 5, 1997 - An international consortium operated by Chevron was awarded a contract for Venezuela's LL-652 oil field, one of the largest opportunities in Venezuela's 3rd Reactivation Round currently underway in Caracas. The consortium submitted the winning bid of (US) $251.3 million for the offshore field, estimated to contain 2.5 billion barrels of oil in place, with recoverable reserves of more than 500 million barrels.

"We are very pleased to be granted the responsibility to operate this oil field, and honored to be an integral part of Venezuela's move to open its oil industry to multi-national companies," said Richard Matzke, a director of Chevron Corp. and president of Chevron Overseas Petroleum. "Chevron has been active in Venezuela for a long time, and we think it's a great place to do business," noted Matzke, referring to Chevron's discovery of the giant Boscan oil field in 1946, and its appointment last year as operator of that field.

David Steele-Figueredo, president of Chevron Latin America, said the four-company consortium placed its bid after intensive study of vast amounts of geologic and economic data.

"We feel that the value is there in the field, and are delighted to have won this bid considering the extremely competitive bidding conditions," said Steele-Figueredo. He pointed out that the LL-652 oil field, discovered in 1953, is currently producing about 12,000 barrels of light (36-degree API gravity) crude oil per day from 109 wells, and contains an additional 49 wells which have already been drilled but are currently inactive.

"LL-652 has the potential to produce 100,000 barrels a day, and we eagerly look forward to working with PDVSA and Lagoven to move rapidly toward achieving the potential of this very important field," said Steele-Figueredo.

The award was made by the Government of Venezuela through its state-owned oil company, Petroleos de Venezuela (PDVSA), to the international consortium led by Chevron, which will hold 30-percent interest and serve as operator, Statoil, the Norwegian oil company (30 percent), Phillips Petroleum (20 percent) and Atlantic Richfield (20 percent). The consortium will produce oil on behalf of PDVSA's wholly owned exploration and producing subsidiary, Lagoven, under an operating service agreement.

Through its winning bid, the consortium now has the right to enter into an agreement, which will structure the parameters for field development, a process expected to begin shortly.

Updated: June 1997