press release

Texaco Press Release - Texaco Secures UK Government Approval for Development of North Sea Galley Field

FOR RELEASE: WEDNESDAY, MARCH 19, 1997.

WHITE PLAINS, N.Y., March 19 - Texaco announced today that it has received approval from the UK Department of Trade and Industry (DTI) and field partners Enterprise Oil Exploration Ltd and Lasmo (TNS) Ltd, to develop the Galley oil and gas field in Block 15/23a of the UK North Sea.

Commenting on the announcement, Texaco Ltd Chairman Don Bennett, said: "Galley is an exciting demonstration of the flexible and imaginative approach Texaco brings to the North Sea. The field will produce oil quickly and economically using an innovative combination of development and production options, created in collaboration with our partners and contractors."

Adding his commments, Galley Project Manager Randall Kubota notes, "the use of established UK companies has assisted with the project's risk management process, both in the conceptual design and in the development plans of the project."

Phase one of the Galley project calls for the development of the North and South accumulations using Seatankers' Northern Producer floating production facility (FPF). The Northern Producer is one of the first FPFs to be re-used in U.K. waters. Originally called the Emerald Producer, it was previously used on the Emerald Field. While full production processing will be carried out on the FPF, produced oil and gas will be exported, by pipeline, to Texaco's Tartan A platform. From there, oil will be piped to the Flotta terminal, and gas to the St. Fergus terminal.

First production from Galley is anticipated in the first quarter of 1998. Peak production from the initial wells will be 43,000 barrels of oil equivalent per day. Two development wells will be pre-drilled, one in each of the North and South accumulations. The drilling, which commenced in early March 1997, is being carried out by the Stena Forth semi-submersible drilling rig.

Texaco will lease the Northern Producer from Seatankers, which has awarded a ten-year management contract to Atlantic Power (AP), with a minimum period of four years. AP has contracted Granhearne to perform the engineering for topsides conversion and front end engineering design work, and Noble Denton to perform marine conversion work. Seatankers is currently tendering for a facilities yard to carry out the topsides facilities modifications. A contract has been awarded to a Coflexip Stena Offshore Ltd./Allseas U.K. Ltd. joint venture for the supply and installation of pipelines and subsea hardware.

Updated: March 1997