press release

Chevron Press Release - Joint Protocol Signed In Almaty

SAN FRANCISCO, April 27, 1996 -- Chevron Corporation confirmed today that its Chevron Overseas Petroleum Inc. subsidiary signed a joint protocol in Almaty to obtain the right to acquire a 15 percent equity interest in a pipeline to be completed from the Tengiz oilfield in western Kazakhstan to the Russian Black Sea port of Novorossiysk.

(Chevron is a 50 percent partner in the Tengizchevroil joint venture that owns and operates this super-giant oilfield. Kazakhstan, the other 50 percent owner, had previously announced that it will sell half of its interest or 25 percent to Mobil in May.)

Commenting on the signing, Chevron Overseas Petroleum Inc. President Richard Matzke said, "This is a major milestone for this important infrastructure project which will help unlock the petroleum resources of Tengiz and the region. Chevron congratulates all the parties involved, especially the governments, on this wonderful achievement."

In Almaty, Jeet Bindra, Senior Vice President for Pipeline and Transportation of Chevron Overseas Company and Chevron's lead negotiator on the project, stated, "We still have a lot of work to do in the coming months. However, if all the parties cooperate as well as they have the past few weeks, we are optimistic that all the agreements will be reached to allow the real work of constructing the pipeline to begin soon."

The signatories of the protocol are the governments of Russia, Kazakhstan and Oman, which founded the Caspian Pipeline Consortium (CPC) in 1992; the Russian state pipeline company Transneft; and a number of international oil company shippers, including Chevron. The protocol provides for a transition period over the next several months in which the parties are to perform due diligence and finalize definitive agreements on the restructuring of CPC.

During the transition period, the oil company shippers will have the exclusive right to acquire 50 percent of the equity of CPC. Chevron is allocated a 15 percent interest. (The allocations of other oil companies are LUKoil at 12.5 percent, Mobil and Rosneft at 7.5 percent each, Agip and British Gas at 2 percent each, and Oryx and the Kazakhstan state holding company, Munaigaz, at 1.75 percent each.) During this time, the shippers will finance ongoing work of CPC so that construction of the pipeline can proceed as soon as possible.

Updated: April 1996