press release

Texaco Press Release - Texaco Begins Production from Petronius Project in Gulf of Mexico

FOR RELEASE: FRIDAY, JULY 21, 2000.

Petronius Platform

NEW ORLEANS, July 21 -- Texaco announced today that it has begun commercial production of oil and natural gas from the Petronius project located in the Gulf of Mexico, 130 miles southeast of New Orleans. Installation of the Petronius platform was completed in early May. Texaco and its partner, Marathon, each have a 50-percent working interest and Texaco is operator.

The Petronius project, located in 1,754 feet of water in Viosca Knoll Block 786, began production of oil and gas on July 9. Current production from two pre-drilled wells is 8,700 barrels of oil and 6 million cubic feet of natural gas per day and will be increasing as production rampup continues. An additional three pre-drilled wells will be brought on production over the next three months leading to rates of 40,000 barrels of oil and 35 million cubic feet of natural gas per day by October 2000. Additional wells will be drilled and brought on line through the remainder of 2000 and 2001, leading to peak production rates of 50,000 barrels of oil and 70 million cubic feet of natural gas per day.

"Petronius is an important part of our growth plan for the deepwater Gulf of Mexico, which is a focus area of our worldwide upstream strategy," said Robert A. Solberg, President of Texaco Worldwide Upstream Commercial Development. "Texaco worked with Marathon and numerous contractors, most of which are Louisiana-based, to move this $500 million project on a fast-track construction schedule, positioning Petronius to play an important role in helping us achieve our production growth targets."

The Petronius development consists of a compliant tower structure with production and drilling facilities set over six pre-drilled wells. The tower is the first of its kind in the world, using flexible piling to provide resistance to the forces of hurricanes.

With the tip of its vent boom more than 2,000 feet above the seafloor, the Petronius platform is the world's tallest freestanding structure.

Robert S. Lane, Vice President of Texaco's New Orleans-based Gulf of Mexico Producing unit added, "Petronius is located in the eastern area of the Gulf and is well situated as a potential hub for future developments in the area. This project is a good example of the type of positive economic impact our industry has on the economy of the State of Louisiana and the Gulf Coast Region."

Note: This press release contains forward-looking statements about production rates from the Petronius field. Actual production rates may change based on changing business conditions. For a further discussion of additional factors that could cause actual results to materially differ from those in the forward-looking statements, please refer to the section entitled "Forward-Looking Statements" in Texaco's 1999 Annual Report or Form 10-K.

Updated: July 2000