press release

Texaco Press Release - Texaco and Mobil Sign Agreements With Rosneft and Rosneft-Sakhalinmorneftegaz


WHITE PLAINS, N.Y., Aug. 6 - Texaco and Mobil Corporation, announced today that affiliates, Texaco Exploration Sakhalin Inc. and Mobil Sakhalin Neftegaz Inc., signed a number of agreements with affiliates of oil companies "Rosneft" and Open Joint Stock Company "Rosneft-Sakhalinmorneftegaz" to include them in the Sakhalin III Kirinskiy Block project, the rights to which were obtained through the Sakhalin III Bid Round in December 1993. The agreements were signed in Moscow on Tuesday, August 4.

In accordance with the terms and conditions of the agreements, the two Russian companies will hold a one-third interest in equal shares and Texaco and Mobil will each retain a one-third interest. PegaStar Neftegaz Limited Liability Company has been formed and will be the operating company in conducting exploration, development and production in the Kirinskiy Block under a Production Sharing Agreement.

The companies have concurrently agreed to jointly appraise and potentially bid in the anticipated tender for the Sakhalin VI (Pogranichny Block) area which is located adjacent to and south of the Kirinskiy Block.

PegaStar will unite the technological and operational capabilities, and the financial strengths and managerial experience of all four companies. This signing marks an important step to achieve large-scale development in the Arctic environment offshore Sakhalin Island.

The inclusion by the end of 1998 of the Kirinskiy Block on the list of fields for development allowed under a production sharing agreement would allow exploration drilling activities to commence as early as 1999.

Updated: August 1998