press release

Texaco Press Release - Texaco Awards Two Contracts in Preparation for Phase Two

FOR RELEASE: WEDNESDAY, MAY 10, 2000.

LONDON, May 10 - Texaco today announced that it has awarded a seismic acquisition contract to Geotex, a Kazakh seismic company, and a drilling contract to Precision Drilling International in preparation for Phase Two of its North Buzachi onshore field appraisal program in the Mangistau province of Western Kazakhstan.

Commenting on the contract awards, Mark L. Johnson, Vice President of Texaco North Buzachi Inc. said: "Texaco has a successful track record in developing projects of this nature and we are keen to establish this field's potential. The award of these two important contracts will lead the company into Phase Two of North Buzachi's appraisal program later this year. It will also secure local employment, further demonstrating Texaco's commitment to the Kazakhstan oil and gas industry.

"The awarding of these contracts has been subject to strict safety and environmental standards that reflect Texaco's dedication to safety and protecting the environment. Contractors are required to employ Kazakh workers wherever possible as part of the North Buzachi field's commitment to contributing to the local community," said Johnson.

Texaco has awarded local company, Geotex a contract to conduct two- and three-dimensional seismic data acquisition. Equipment is currently being mobilised for parameter testing with full-scale acquisition of seismic data scheduled to commence during May. The work, which is expected to take approximately seven months, will initially be conducted over a 92 square kilometre area and will employ a local workforce of 280 people.

In addition, Texaco has awarded Canada-based Precision Drilling International a contract to drill vertical, directional and horizontal wells over a two-year period. Precision Drilling's super single rig, PD 709, commissioned to do the work is particularly suited for drilling applications in environmentally sensitive and inaccessible locations. It was also designed to a high safety standard and has operated for three years without a lost time incident. As part of Texaco's conditions for awarding the contract, 80 percent of the workforce will be local Kazakhs.

Texaco is operator with a 65 percent interest in the North Buzachi field with Nimir Petroleum Limited holding the remaining 35 percent interest.

Updated: May 2000