press release

Texaco Press Release - Texaco Chief Says Company Is on Plan to Achieve Goals; Cites Strong 1997

Cites Strong 1997 Performance and Production Growth in 1998


WHITE PLAINS, N.Y., Dec. 10 - Texaco Chairman and Chief Executive Officer Peter I. Bijur today expressed optimism in Texaco's future based on strong 1997 performance and a 1998 plan focused on building significant value for the company. In remarks before approximately 200 security analysts at Texaco's Harrison, N.Y. offices, Bijur and Texaco's senior management team outlined a series of goals for financial and operational performance, including:

  • Growing reserves over the next five years well ahead of expected production increases: 1997 reserves are expected to grow by 10 to 11 percent;
  • Anticipated annual production growth of approximately eight percent over the next five years;
  • Expectations for new production during the five-year period having higher value than existing production: $4.00 per barrel for new production, or $.70 per barrel over existing production;
  • Five-year capital and exploratory spending planned at $26 billion, with $4.6 billion in 1998; and
  • Completion of the U.S. downstream alliance with Shell and Saudi Aramco which will achieve anticipated $800 million in annual pre-tax savings for the planned ventures.

Strong Short- and Long-Term Growth in Upstream Sector

"As we approach 1998, Texaco's worldwide production has risen to just over 1.3 million barrels of oil equivalent per day. This puts us in a great position as we move into 1998," Bijur reported, citing expected production growth from the Monterey assets and the Deepwater Gulf as drivers to increased production. Each is expected to grow to nearly 120,000 barrels of oil per day within five years.

"Our production profile over the next five years will come about as a result of a balance of maximizing our existing assets, discovered reserve opportunities, focused impact exploration and selected acquisitions," he stated.

Outside the U.S., major areas of production growth will be seen in the Partitioned Neutral Zone, Karachaganak, and the new North Sea fields Captain B, Erskine area developments, and Galley. Increased production will be realized from the Hamaca Field in Venezuela, in addition to projects in Trinidad and Colombia.

Aggressive Efforts to Revitalize Downstream

In the downstream, Texaco and Saudi Aramco are close to completing the alliance with Shell Oil. The Federal Trade Commission approval is expected soon. Bijur stated, "The alliance arose out of the need to take bold steps to improve returns in Texaco's refining and marketing operations in the United States. Both Texaco and Shell had plans to grow their U.S. downstream businesses, but recognized an opportunity to grow faster and deliver greater returns by combining resources."

Beyond the U.S., Bijur reported that Texaco continues to strengthen its position in the downstream sector, particularly in the Latin American market. "For example," Bijur noted, "the opening of the retail market in Venezuela, which is likely to occur next year, is very promising. Also, market entries into Peru and Ecuador continue to show good growth in volume and earnings."

Technology Drives Future Success

Bijur noted that success in 1998 and beyond will be driven by technology, such as Texaco's new state-of-the-art 3-D visualization centers and the promising agreement with Syntroleum to explore gas to liquids opportunities.

In conclusion, he stated, "As I look forward to the next five years, I am confident that Texaco is well positioned to build significant value for its shareholders. We have substantial and profitable assets in our portfolio along with financial flexibility, and we are ready to capitalize on many new opportunities."

Note: This press release contains forward-looking statements about Texaco's capital expenditures, future earnings, production, and other operating results. Actual results may differ materially, and plans may change based on changing business conditions. Among the factors which could cause such differences are the following: crude oil and natural gas prices; refining margins and marketing margins; potential failure to achieve expected production from existing and future oil and gas developments; and potential disruption or interruption of the company's production or manufacturing facilities due to accidents or political events.

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 "Certain Factors Which May Affect Business" section on page 2 of Texaco's 1996 Annual Report on Form 10-K.

Updated: December 1997