press release

Texaco Press Release - Texaco and Tyumen Oil in Discussions to Expand Marketing Venture in Russia


KIEV, UKRAINE, Nov. 23 - Texaco and Tyumen Oil Co. (TNK), one of Russia's top four oil companies, today announced the signing of a non-binding memorandum of understanding (MOU), with the intention of working together to establish a joint venture to build and operate Texaco Star Mart convenience stores, in conjunction with Tyumen Oil service stations, in the greater Moscow and Kiev areas in the Ukraine.

The current proposed venture would see Tyumen Oil develop 60 service stations in the Moscow area, and 30 in the Kiev area. Gasoline would be sold under the TNK brand, but the new Tyumen Oil/Texaco joint venture would lease and manage the convenience stores, car washes and quick service oil change facilities under the Texaco Star Mart brand. The discussions between the companies are expected to be completed in the next several months, with the first service stations projected to begin operations by mid-2001.

"Our ongoing relationship with Texaco continues to expand and benefit both companies," said Tyumen Oil's Deputy Chairman, German Khan. "We hope that Texaco's modern, clean convenience stores will soon be a welcome sight for motorists around the Moscow and Kiev areas."

The joint venture would seek to capture a significant share of the greater Moscow and greater Kiev retail fuel market. Tyumen Oil currently has 51 gasoline stations in greater Moscow.

"Tyumen Oil and Texaco have developed a successful relationship, and we are happy to be co-operating with them on this initiative," said Scott Brown, President of Texaco Global Products. "This Memorandum of Understanding could represent a significant increase in our joint activities in Russia and the Ukraine. TNK's aim to provide quality and reliable products fits with Texaco's commitment to supply the highest quality products and services to its Start Mart customers worldwide."

In addition to providing Tyumen Oil with commodity risk management support, Texaco has operated a 50/50 joint venture with Tyumen Oil since January 2000, to market Texaco-branded imported lubricants, as well as TNK and Texaco-branded lubricants produced and blended at Ryazan.

Under the MOU, Texaco and Tyumen Oil will also investigate the possible expansion of their lubricant joint venture by the construction of a new lubricant blending plant adjacent to the Lisichansk oil refinery (Linos) in the Ukraine. Tyumen acquired Linos in July after successfully acquiring 67.41 percent of the state-owned facility at public auction.

Notes to the editors

Tyumen Oil, established in 1995 and owned by the Russian Alfa Group and US/Russian Access/Renova, has crude oil reserves of more than 7.4 million barrels and refines more than 500,000 barrels per day. It ranks No. 2 in reserves and No. 4 in production among Russian oil companies. Tyumen Oil owns and franchises a chain of nearly 700 branded retail gasoline stations. It is in the process of an ambitious $300 million upgrade of its Ryazan Refinery, located just 120 kilometres south east of Moscow. Once the upgrade is complete in 2002, the refinery will become the most advanced refining facility in Russia. For further information, go to

Operating in over 150 countries worldwide, Texaco explores for and produces crude oil, natural gas and natural gas liquids; manufactures and markets high quality fuels and lubricants; and operates trading, transportation and distribution facilities; and produces alternate forms of energy. Texaco is a world leader in gasification technology, an environmentally advanced technology for the conversion of coal, petroleum coke and other low-value hydrocarbons into a clean synthesis gas, which is used for the production of electric power as well as chemical products and industrial gases, including hydrogen. For further information, visit Texaco's website at

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: mechanical failures; decreased demand for motor fuels, natural gas and other products; above or below-average temperatures; pipeline failures; oil spills; worldwide and industry economic conditions; inaccurate forecasts of crude oil, natural gas and petroleum product prices; increasing price and product competition; price fluctuations; higher costs, expenses and interest rates; the outcome of pending and future litigation and governmental proceedings; continued availability of financing; strikes and other industrial disputes; legal, regulatory and legislative risks; import and export controls; price controls; crude oil and refined product allocations; refined product specifications; environmental, health and safety regulations; retroactive and prospective tax increases; cancellation of contract rights and concessions by host governments; expropriation of property; divestiture of operations; foreign exchange rate changes; restrictions as to convertibility of currencies; tariffs and other international trade restrictions.

In addition, you are encouraged to review Texaco's latest reports filed with the SEC, including Texaco's Annual Report on Form 10-K filed with the SEC on March 30, 2000, 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: November 2000