press release

Texaco Press Release - Texaco Completes Phase Two Appraisal Drilling at Its North Buzachi Field

FOR RELEASE: WEDNESDAY, JULY 4, 2001

LONDON, July 4 - Texaco today announced that it has completed appraisal drilling as part of the second phase of its North Buzachi onshore field appraisal program in the Mangistau province of Kazakhstan.

Commenting on the announcement, Mark L. Johnson, Vice President of Texaco North Buzachi Inc. said, "The main objective of phase two was appraisal drilling to confirm the amount of oil in place and the areal extent of the field. The program has been completed on schedule."

"Phase two involved evaluating the use of steam stimulation and water injection at the field with knowledge gained from this assessment work being used to increase our understanding of how to best develop the field," said Johnson.

The appraisal program at the Texaco-operated North Buzachi field involved both two- and three-dimensional seismic data acquisition and 30 new wells drilled to add to the four drilled under the phase one appraisal program.

Texaco will evaluate phase two results this year, with a decision on full field development likely to be taken during first half of 2002. Full development could include as many as 600 wells drilled over a 10-year period.

Current production at the field is 4,000 barrels of oil per day (bopd) and is expected to rise to 7,000 bopd by the end of the year.

The phase two appraisal program created 1,100 local jobs, further demonstrating Texaco's commitment to the Kazakhstan oil and gas industry. Contractors were required to employ Kazakh workers wherever possible as part of the North Buzachi field's commitment to contributing to the local community.

A local company, Azimuth, formerly Geotex, conducted the full-scale acquisition of seismic data over a 92 square kilometre area and employed a local workforce of more than 300 people.

Canadian based Precision Drilling International (PDI) was awarded the contract to conduct drilling operations. As part of Texaco's conditions in awarding the drilling contract, 80 percent of PDIs workforce were local Kazakhs.

PDI's Super Single rig, PD 709, commissioned to complete the work was particularly suited for drilling applications in environmentally sensitive and remote locations. It has been designed to a high safety standard and has operated for four years without a lost time incident.

North Buzachi crude is being exported to Germany via the Russian pipeline system to the north, across the Caspian to Baku and onward to the Black Sea port of Batumi, and to local Kazakh refinery.

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

Cautionary Note to U.S. Investors:

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 forward-looking statements are subject to risk factors associated with oil, gas, power and renewables businesses. It is believed that the expectations reflected in these statements are reasonable, but may be affected that by a variety of variables which could cause actual results or trends to differ materially, including, but not limited to: price fluctuations, actual demand, currency fluctuations, drilling and production results, reserve estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates, and worldwide and industry economic condition. 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 26, 2001, 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.

The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this press release, such as expected production, reserves in place and estimated resources, that the SEC's guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the Supplemental Oil and Gas Information disclosure in our 2000 Annual Report on Form 10-K referenced above.

Updated: July 2001