press release

Texaco Press Release - Texaco and Tyumen Oil Company to Form Lubricants Marketing Joint Venture

FOR IMMEDIATE RELEASE: WEDNESDAY, JUNE 9, 1999.

WHITE PLAINS, N.Y., June 9 - Texaco and Tyumen Oil Company (TNK) today announced that they have signed a joint venture agreement to form a lubricants marketing company with a sales territory of the Russian Federation, Belarus and the Ukraine. Texaco will hold 50 percent of the ownership of the proposed venture and TNK will hold 50 percent. The joint venture company will market Texaco-branded imported lubricants as well as Texaco- and TNK-branded lubricants produced and blended at TNK's Ryazan Oil Refinery located 200km from Moscow. Both Texaco's and TNK's existing lubricant businesses in the sales territory will be involved in the venture, with anticipated JV lubricant sales of nearly 200,000 metric tons per year or 10% market share.

Commenting on the deal, Glenn F. Tilton, Texaco Inc. Senior Vice President and President, Global Businesses, and Simon G. Kukes, President and CEO of Tyumen Oil Company said: "The creation of this joint venture reflects our commitment to the lubricants business in a region with substantial demand in an increasingly quality-focused environment. Our customers will receive a wider range of products, and the ability to source high quality base oil feedstock from the Ryazan refinery along with first-class Texaco technology will give TNK and Texaco Lubricants Company a competitive edge. Most importantly, this company is well-positioned for growth and has the potential to quickly become the market leader."

TNK is a leading vertically-integrated oil company in Russia, ranking third in terms of oil reserves. Since 1998, it has increased the operating throughput of the Ryazan Oil Refinery six-fold, doubled its number of retail service stations to 540 and expects to have 1000 stations in two years. TNK has also recently secured a $197.6 million loan guarantee from the U.S. Export-Import Bank to upgrade the Ryazan Oil Refinery.

New York-based Texaco is one of the world's largest, most respected energy companies. Operating in more than 150 countries, Texaco and its affiliates explore for, find, produce and sell crude oil, natural gas liquids and natural gas; manufacture and market high-quality fuels and lubricant products; operate trading, transportation and distribution facilities; and produce alternate forms of energy for power and manufacturing.

Updated: June 1999