press release

Texaco Press Release - Texaco and Sonangol Retain Citibank as Financial Advisor

Phase Two Of Angola LNG Project Moves Forward


HOUSTON, May 15 - Angola's state owned oil company, Sonangol, and Texaco continue to advance the proposed Liquefied Natural Gas (LNG) project in Luanda, Angola. It was announced today that Citibank has been retained as financial advisor for a financing feasibility study and that the project has issued an invitation to four consortia to bid for a front-end engineering design (FEED) contract.

The consortia invited to bid for FEED are:

  • Kellogg Brown & Root - JGC of Japan - Technip.
  • Chiyoda - Foster Wheeler - ABB - Stolt Comex.
  • Bechtel - Bouygues - Saibos (Saipem - Bouygues Offshore joint venture).
  • Kvaerner - Black & Veatch Pritchard - Hyundai.

Commenting on the announcement, Bill Hauhe, Texaco's Angola LNG Project Manager said, "We have adopted a phased approach to this project. After successful completion of the initial phase, this marks the beginning of the second phase of the project. We intend to award FEED contracts to two successful consortia by mid-year 2001. This project offers a comprehensive utilisation of Angola's large gas resources."

Ângelo Ribeiro, Sonangol's Senior Vice President, considers this project to be very important for Angola, as it will use associated gas from the major deep-water discoveries, which might otherwise be flared. In addition, this project will have a considerable social impact on Angola with the creation of direct and indirect employment, both in the construction stage and the production stage.

The Citibank feasibility study is expected to be concluded in two months. The goal of this study is to investigate financing options for the project and begin to structure the financial program necessary for the development.

Under the terms of the FEED award, the two successful consortia will be required to plan and engineer an offshore and onshore facilities design package for the LNG project and simultaneously prepare lump-sum, turn-key bids for their construction.

The Angola LNG project is a joint development between Sonangol and Texaco, and additional partners are expected to join the project soon. Initially the plant configuration allows for a one-train design each with a throughput of four million tonnes of LNG per annum. The project is expandable to four trains on the chosen site in the Luanda area. A joint feasibility study conducted by Texaco and Sonangol concluded that sufficient gas resources exist to supply a LNG project in Angola, that the project is feasible and that markets are obtainable. Texaco and Sonangol are working towards expanding the first LNG cargo in mid-2005.

LNG cargo

Note: This press release contains a number of forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In particular, statements made concerning Texaco's expected performance and financial results in future periods are based upon Texaco's current expectations and beliefs and are subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

The following factors known to Texaco among others, could cause Texaco's actual results to differ materially from those described in the forward-looking statements: inaccurate scientific data; mechanical, chemical and technological failures; decreased demand for fuels and other products; above or below-average product and technology demands; worldwide and industry economic conditions; higher costs, expenses and interest rates; the outcome of pending and future litigation and governmental proceedings; continued availability of financing; and strikes and other industrial disputes. In addition, you are encouraged to review Texaco's latest reports filed with the SEC, including, but not limited to, Texaco's Annual Report on Form 10-K filed with the SEC on March 26, 2001, which describes a number of additional risks and uncertainties that could cause actual results to vary materially from those listed in the forward-looking statements made in this press release.

Updated: May 2001