press release

Texaco Press Release - Texaco and FAMFA Announce Major Deepwater Oil Discovery Offshore Nigeria

FOR RELEASE: TUESDAY, JANUARY 5, 1999.

HOUSTON, Jan. 5 - Texaco and Famfa Oil Limited of Nigeria, have announced a major wildcat discovery on OPL Block 216, which is located in the deep waters approximately 70 miles offshore Nigeria in the central Niger Delta.

The discovery well, Agbami-1, encountered 420 net feet of pay in multiple oil zones from 8,200 feet to the total depth of 12,400 feet. The well penetrated stacked reservoir sands saturated with oil, ranging in overall column thickness from 400 to more than 1,000 feet. The quality of the oil from these zones is 35 - 45 degree API gravity, with very low sulfur content. Preliminary data indicates the reservoirs contain several hundred million barrels of recoverable oil.

The well spudded on July 15 in 4,700 feet of water, making it the deepest water depth well in Nigeria. It reached the total depth in late November and was temporarily suspended to allow for flow testing and possible production at a later date.

"We have made excellent progress in focusing and positioning our exploration program in areas that can yield high impact results. This discovery is a direct result of those efforts," noted John J. O'Connor, President of Texaco Worldwide Exploration and Production. "The Agbami-1 shows significant oil reservoirs, however, we will not know the full magnitude of this discovery until further appraisal drilling and testing are conducted later this year."

Texaco and Famfa were granted exploration rights to the 617,000-acre OPL Block 216 in late 1996. Acquisition, processing and interpretation of the 3-D seismic data using Texaco's 3-D Visualization technology enabled the company to reduce the cycle time for this well to approximately one and one-half years.

Famfa, an independent Nigerian oil company, is operator of the Agbami-1, with Texaco serving as technical advisor. Ownership interests in the discovery are defined by the terms of a deepwater production sharing contract (PSC) between Texaco and Famfa. As technical advisor, Texaco currently holds a 100 percent contractor's interest subject to further provisions of the PSC.

O'Connor added, "Nigeria has been identified as one of the key focus areas of Texaco's upstream business strategy. We hope to build upon the long standing relationships we have forged in Nigeria, and to work with our business partners to develop the country's vast energy resources in a responsible and environmentally sensitive fashion."

Texaco's deepwater operations in Nigeria OPL 216 are managed through Texaco's wholly owned subsidiary, Star Deep Water Petroleum Limited. Texaco has had a presence in Nigeria since 1913, and currently produces some 65,000 barrels of oil per day from offshore operations in the Pennington and adjacent fields, through Texaco Overseas (Nigeria) Petroleum Company Unlimited.

NOTE:

This press release contains forward-looking statements about recoverable oil in Nigeria OPL Block 216. Actual results may change based on changing business conditions. Among the factors which could cause such differences are crude oil and natural gas prices and potential failure to achieve expected production.

For a further discussion of additional factors that could cause actual results to materially differ from those in the forward-looking statements, please refer to the section entitled "Forward-Looking Statements" in Texaco's 1997 Annual Report on Form 10-K.

Updated: January 1999