press release

Texaco Press Release - Texaco Chairman Cites 1997 As a Record Year

Stockholders Approve Extension of "Stockholder Rights Plan" At Company's Annual Meeting

FOR RELEASE: TUESDAY, APRIL 28, 1998.

RYE BROOK, N.Y., April 28 - A review of outstanding performance in 1997, a focus on the challenges to building shareholder value in 1998 and approval of a stockholder rights plan were highlights of Texaco's 97th Annual Meeting here today. Speaking before approximately 300 shareholders, Texaco Chairman and Chief Executive Officer Peter I. Bijur noted key 1997 achievements including record net operating income, a dividend increase, a stock split in September, the acquisition of Monterey Resources, and reserve replacement of 167 percent, excluding Monterey.

Bijur also said that Texaco exceeded its first year goals for the company's comprehensive plan to advance the hiring and promotion of women and minorities and increase expenditures with women- and minority-owned businesses.

In commenting on the company's first quarter 1998 earnings, Bijur noted that operationally the company performed well, and year-to-year downstream results improved by $119 million; however, overall earnings could not overcome the sharp decline in crude oil prices.

Bijur outlined the company's efforts to protect stockholder value during the current period of low crude prices. "We are keeping a keen eye on our cash outlays, tightening expense controls and, if our view of pricing changes, we have identified capital expenditures that could be deferred without negatively impacting our growth plan," he said. Bijur stated that while the current price environment calls for vigilance, Texaco's plan factors in the historical volatile energy market.

"Looking beyond today's imbalance, the market outlook is encouraging. As the Asian economies shift into a higher gear and Latin American, U.S., and European markets continue to expand, we expect world oil demand to grow at about two to three percent per year, roughly two million barrels of oil per day. This is robust growth and should help in sopping up the excess supplies and restoring market balance," Bijur said.

The annual meeting was highlighted by approval of a five-year extension of the Texaco Stockholder Rights Plan that is designed to protect the full value of stockholders' investment against certain coercive takeover tactics. Votes cast in favor were 66 percent. Texaco was unique among major industrial companies in seeking stockholder approval of such a plan.

Responding to Shareholder Comments

In addition to outlining Texaco's 1997 performance and building shareholder value, Bijur responded to questions on other issues relating to the company.

In response to a stockholder's comment about Texaco's diversity efforts, Bijur said, "In December 1996 the company established an ambitious and comprehensive plan directed at ensuring fairness and economic opportunity for employees and business partners, and enabling Texaco to better compete in the energy marketplace."

In 1997, direct expenditures with women- and minority-owned business enterprises more than doubled to nearly $300 million, or 7.1 percent of total discretionary spending, over last year. Minorities and women accounted for 69 percent of the 8,904 new hires in the U.S. Also, 57 percent of the 599 promotions went to minorities and women. In the marketing operations, Texaco added 13 minority and women wholesalers, exceeding the 1997 plan to add nine.

Answering a stockholder question about the environmental issues associated with Texaco's former producing activities in Ecuador, Bijur pointed out that operations in Ecuador were conducted by a consortium, and Texaco Petroleum Company was a minority partner in that consortium until 1992 when the company left the region.

"Independent assessments and audits have confirmed that the consortium adhered to international petroleum industry standards," he said.

Bijur stated that after discussions with representatives of the Ecuadorian government and local municipalities, Texaco Petroleum Company conducted extensive environmental remediation projects and funded social programs where the consortium operated. In return, Ecuador and these communities have settled all their claims and Texaco Petroleum Company is in the process of finalizing its remediation work.

With regard to shareholder comments about Texaco's position on global climate change, Bijur stated, "Texaco's role cannot simply be to debate the science of climate change, but we must find ways within our company to reduce emissions and protect the environment. We should work together with government and others in industry to actively address and propose solutions to concerns surrounding this issue."

Updated: April 1998