press release

Texaco Press Release - Texaco Acquires 20 Percent of Giant Kazakstan Field

FOR RELEASE: TUESDAY, AUGUST 19, 1997.

WHITE PLAINS, N.Y., Aug. 19 - Texaco announced today it has acquired a 20-percent interest in Kazakstan's giant Karachaganak oil and gas field. Texaco's ownership participation, acquired from partners Agip S.p.A. and BG Exploration and Production Limited, has been approved by the Government of Kazakstan.

Texaco Inc. Senior Vice President and President of Texaco Worldwide Exploration and Production C. Robert Black said, "Karachaganak is a significant project with the potential to add up to 700 million barrels of oil equivalent to Texaco's reserve base. The project is a strong strategic fit and is expected to become a substantial, long-term contributor to our growing worldwide production."

Karachaganak currently is operating under an interim agreement, signed in March 1995, and under a 40-year license for the field's production. Texaco joins the consortium as it is negotiating a final production sharing agreement, which is expected to be completed by the end of this year.

One of the largest oil and gas fields in the world, Karachaganak currently produces more than 50,000 barrels of condensate per day and 210 million cubic feet of natural gas per day. The field was discovered in 1979 and potentially holds recoverable reserves of more than two billion barrels of oil and condensate, plus 20 trillion cubic feet of gas.

Black added, "Karachaganak will begin contributing immediate production and revenues, and holds significant promise for the company in the future. It is our intention to commit capital resources, technology and personnel to ensure the success of the partnership."

Kazakstan

Texaco Inc. Vice President and President of Texaco International Production Robert A. Solberg noted, "Karachaganak is clearly a major addition for Texaco, and we believe that there are technical and commercial options which will enable us to overcome the challenges that exist, such as those in the area of export infrastructure."

While current production is exported to Russia, the Karachaganak consortium also ultimately plans to offer its condensate to world markets, including those that will be serviced by the Caspian Pipeline which is currently under development.

Solberg added, "Texaco anticipates that the new partnership will move rapidly to conclude negotiations on the final production sharing agreement so that the required field development investments can be completed in time to take advantage of the Caspian pipeline."

Updated: August 1997