press release

Texaco Press Release - Texaco and Petrobras Sign First Partnership Agreement for Campos Basin

Agreement Follows Texaco's Acquisition of Exploration Blocks in Brazil's First License Round

FOR RELEASE: THURSDAY, JULY 8, 1999.

HOUSTON, July 8 - Texaco announced today that it has signed an agreement with Petroleo Brasileiro S.A. (Petrobras), Brazil's national oil company, to become an equity partner in the Campos BC-4 exploration and the Frade development areas offshore Brazil. This agreement solidifies Texaco's entry into the Brazilian upstream industry.

Commenting on the announcement, Peter I. Bijur, Chairman and Chief Executive Officer of Texaco Inc., said, "We are pleased to formalize our partnership with Petrobras in these high potential blocks. Texaco's participation in BC-4 is consistent with our strategy of pursuing high-impact exploration and production opportunities."

Texaco, a 42.5 percent interest partner, will operate the offshore BC-4 and the Frade development blocks, which are located approximately 300 km (190 miles) east of Rio de Janeiro in the Campos Basin. In addition to Texaco and Petrobras, other partners in the agreements are Nissho Iwai/Inpex and Odebrecht (15%).

The Campos Basin is a world class petroleum system, which contains approximately 70 percent of Brazil's known reserves and daily oil production.

Today's announcement follows Texaco's recent acquisition of three additional offshore exploration blocks in Brazil's First License Round held last month in Rio de Janeiro.

Bijur added, "We are very enthusiastic about our acquisitions in the recent bid round in Rio de Janeiro, which will help us develop our upstream portfolio and build on our 84 years of successful downstream operations in Brazil."

Petrobras, headquartered in Rio de Janeiro, is the world's 15th largest oil company conducting business in the areas of exploration, production, refining, distribution and marketing of oil products. Petrobras is a recognized leader in the development and application of deepwater exploration and production technology and currently holds the industry record of 1,853 meters (6,709 feet) for deepwater production.

Texaco and its affiliates, operating in more than 150 countries, find and produce crude oil and natural gas, manufacture and market high-quality fuel and lubricant products; operate transportation, trading and distribution facilities; and produce alternate forms of energy for power and manufacturing. At year-end 1998, Texaco had worldwide assets totaling more than $28 billion and revenues of more than $31 billion.

Updated: July 1999