press release

Texaco Press Release - Texaco And Shell Announce Signing Of Memorandum Of Understanding

FOR IMMEDIATE RELEASE: THURSDAY, SEPTEMBER 3, 1998

LONDON, U.K., September 3rd - Texaco and Shell Europe Oil Products today announced the signing of a non-binding Memorandum Of Understanding (MOU) with the intention of establishing an alliance for their European oil products marketing and manufacturing activities. This MOU culminates talks that began in 1997.

The proposed venture would draw upon the combined strengths of Shell and Texaco, with the aim of improving shareholder returns and value for customers in the highly competitive European market. The proposed venture would market using both the Shell and Texaco brands.

The two companies will now undertake detailed discussions with the goal of finalising agreement on the formation of a new joint venture as soon as possible. Subject to final definitive agreements, regulatory reviews and staff consultation procedures, the new venture could be operational by mid-1999.

Under the terms of the MOU, Shell companies will have an interest of 88% and Texaco 12% of the new venture, with certain governance matters requiring joint agreement.

The proposed alliance would not involve the companies' other activities in Europe or their LPG, coolants, international aviation and marine products businesses. The new venture would be in addition to the Shell-Texaco joint ventures in the United States.

(This press release contains projections and other forward-looking statements within the meaning of section 21E of the U.S. Securities Exchange Act of 1934. These projections and statements reflect Texaco's current views with respect to future revenues. No assurances can be given, however, that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors, such as market conditions and other factors included in Texaco's periodic reports filed with the Securities and Exchange Commission.)

Note to Editors:

The attached fact sheet outlines significant details of the assets anticipated to be included in the proposed joint venture.

FACT SHEET:
PROPOSED SHELL/TEXACO
EUROPEAN MARKETING & MANUFACTURING ALLIANCE

(Note: All Numbers as of end 1997)

EMPLOYEES (including subsidiaries)

SHELL TEXACO
25,000 4,300

REFINERIES (figures in brackets are: % equity interest and capacity in 1,000 barrels per day)

Petit-Couronne, France (100%, 141)
SHELL TEXACO
Stanlow, UK (100%, 260)
Shell Haven, UK (100%, 92
Eastham, UK (50%, 20)
Pembroke, United Kingdom (100% 190)
Pernis, Netherlands (100%, 374) Rotterdam, The Netherlands (35%, 140)
Godorf, Germany (100%, 170)
Harburg, Germany (100%, 102)
Berre-l-Etang, France (100%, 127)
Vendenheim, France (65%, 80)
Fredericia, Denmark (100%, 70)
Gothenburg, Sweden (100%, 81)
Cressier, Switzerland (100%, 60)
Sola, Norway (100%, 53)
Mersin, Turkey (27%, 100 - for sale)
Pantano di Grano (20%, 85)
Litvinov, Czech Republic (16%, 110)
Kralupy, Czech Republic (16%, 68)

MARKETING (BY COUNTRY) Branded outlets

COUNTRY SHELL TEXACO
Austria 431
Belgium/Luxembourg 448 483
Central and Eastern Europe 365 19 Poland
Denmark 276 (See notes, below)
Finland 434
France 1,406
Germany 1,715
Greece 780 373
Italy 1,759
Rep. Of Ireland 340 432
Netherlands 800 557
Norway 449 (See notes, below)
Portugal 250
Spain 285 55
Sweden 602
Switzerland 547
Turkey 608
(for sale)
United Kingdom 1,459
(Excluding 382 Gulf sites acquired Dec. 8, 1997)
1,065
TOTAL: 12,954 2,984

NOTE: Hydro-Texaco Holdings is a joint venture of Texaco and Norsk Hydro, formed in December 1994, that sells petroleum products in Norway, Denmark and the Baltic states. Altogether, Hydro Texaco operates approximately 990 branded sites.

LUBES PLANTS

SHELL TEXACO
13 3

TERMINALS

SHELL (including refinery terminals) TEXACO
78 100% owned 11 100% owned
255 JVs, Equity interest or throughput 23 JVs, Equity interest or throughput

Updated: September 1998