press release

Texaco Press Release - CNOOC, Texaco and BP Achieve Major Milestone


BEIJING, PRC and HOUSTON, July 30 - At a ceremony in Dalian, China, over the weekend, Chinese National Offshore Oil Company (CNOOC), Texaco and BP celebrated the completion of one of the world's largest floating production, storage and off-loading vessel's (FPSO) bringing its development of the Qinhuangdao (QHD) 32-6 field in Bohai Bay closer to realization. The vessel will be towed to its offshore field location in August for final hookup and offshore commissioning. Startup of the field is planned prior to year-end.

Named the "Bohai Shi Ji," which means "Bohai Century" in English, the FPSO hull was constructed by Dalian New Shipyard and topsides facilities were constructed by China Offshore Oil Engineering Company. The FPSO is designed to process approximately 80,000 barrels of oil per day, with oil storage capacity of 1 million barrels. CNOOC will be operator of the field with a 51 percent interest. BP and Texaco each have a 24.5 percent interest.

The QHD 32-6 field, discovered by CNOOC in 1995, is located approximately 250 kilometers (155 miles) southeast of Beijing in the Bohai Bay. The field lies 20 kilometers (12 miles) offshore in 20 meters (65 feet) of water. A unique design feature of the FPSO is the large size of the vessel, 287 meters long and 51 meters wide, combined with shallow draft of 14 meters.

"QHD is the first CNOOC operated foreign cooperation project and represents a new age of cooperation with China," said Robert A. Solberg, President of Texaco Commercial Development. "This world-class project demonstrates that value can be achieved by bringing together innovative technologies and teamwork."

Gary Dirks, President of BP China, said, "Achieving this milestone in the development of the QHD 32-6 project has required careful coordination and great attention to detail. Because of everyone's common understanding and commitment to the complex project management and construction techniques, we are able to bring Bohai Shi Ji to a successful completion."

The FPSO vessel will house all power generation and oil/water processing equipment; oil will be stored in the hull of the vessel, which will periodically be offloaded to oil tankers for export to markets.

Texaco China is part of the CACT Operators Group, which operates the Huizhou oil fields in the Pearl River Mouth area of the South China Sea. BP China currently operates China's largest offshore natural gas field, Yacheng 13-1, near Hainan Island in the South China Sea.

Fact Sheet

Cautionary Note to U.S. Investors:

This press release contains a number of forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In particular, statements made concerning Texaco's expected performance and financial results in future periods are based upon Texaco's current expectations and beliefs and are subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

The forward-looking statements are subject to risk factors associated with oil, gas, power and renewables businesses. It is believed that the expectations reflected in these statements are reasonable, but may be affected that by a variety of variables which could cause actual results or trends to differ materially, including, but not limited to: price fluctuations, actual demand, currency fluctuations, drilling and production results, reserve estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates, and worldwide and industry economic condition. In addition, you are encouraged to review Texaco's latest reports filed with the SEC, including Texaco's Annual Report on Form 10-K filed with the SEC on March 26, 2001, which describes a number of additional risks and uncertainties that could cause actual results to vary materially from those listed in the forward-looking statements made in this press release.

The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this press release, such as expected production, reserves in place and estimated resources, that the SEC's guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the Supplemental Oil and Gas Information disclosure in our 2000 Annual Report on Form 10-K referenced above.

Updated: July 2001