Texaco Press Release - Decision Reached in OPL 216 Arbitration
Tribunal Affirms Contracts for Agbami Deepwater Discovery
FOR RELEASE: WEDNESDAY, AUGUST 23, 2000
WHITE PLAINS, N.Y., August 23 - Texaco announced today that it has received a favorable ruling from the independent arbitration tribunal convened to examine agreements between partners in Nigeria's Oil Prospecting License (OPL) 216. The ruling unanimously and unequivocally upholds the validity of the contracts between Texaco's wholly owned subsidiary, Star Deep Water Petroleum Limited ("Star Deep"), and Famfa, an independent Nigerian oil company.
According to a statement from Texaco, "This Block and the Agbami discovery are of strategic importance to Texaco and we are confidently moving forward on commercializing this discovery in a manner that is advantageous to all partners and will provide significant economic benefits for Nigeria. We also look forward to strengthening our working relationships with our partners Famfa and Braspetro and to the Nigerian National Petroleum Corporation's (NNPC) participation as a 40 percent partner when the Block converts to oil mining lease (OML) status."
Background re: Agbami
Agbami was discovered in 1999 through the drilling of a wildcat well. Star Deep, as technical advisor, along with its funding partner Braspetro, have provided the expertise and funding for all work on Block 216 to date. In January 2000, the partners announced that the testing on the Agbami-2 appraisal well confirmed that the Agbami discovery has potential recoverable reserves in excess of one billion oil equivalent barrels. Texaco's share of the production from this resource is expected to exceed 50 percent.
Location:70 miles offshore in central Niger Delta
- Famfa (operator) - 60% interest
- Texaco (technical advisor) - 32%
- Braspetro - 8%
Size:45,000 acres extending from Block 216 to 217
Product Characteristics:Light, sweet crude (45 degrees API gravity) with no contaminants
Estimated first production:2004
Estimated peak production:200,000 bpd
Development method:FPSO with subsea tie backs
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 following factors known to Texaco, among others, could cause Texaco's actual results to differ materially from those described in the forward-looking statements: incorrect estimation of reserves; inaccurate seismic data; decreased demand for motor fuels, natural gas and other products; pipeline failures; worldwide and industry economic conditions; inaccurate forecasts of crude oil, natural gas and petroleum product prices; increasing price and product competition; price fluctuations; higher costs, expenses and interest rates; the outcome of pending and future litigation and governmental proceedings; cancellation of contract rights and concessions by host governments; expropriation of property; divestiture of operations; and foreign exchange rate changes. 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 24, 2000, 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.
Updated: August 2000