Concession Extended to 2030

WASHINGTON, May 13, 2004 -- ChevronTexaco today confirmed that the Angola Block 0 concession held by its wholly owned subsidiary Cabinda Gulf Oil Company Ltd. (CABGOC) has been extended beyond 2010 to 2030 by the government of Angola and national oil company, Sonangol.

Comprising 36 major fields including Takula and Malongo, the 2,155-square-mile concession lies off the coast of Cabinda Province. CABGOC, with a 39.2 percent interest, is operator on behalf of its association partners, Sonangol (41 percent), Total (10 percent) and ENI (9.8 percent). Current average production from Block 0 is approximately 400,000 barrels of oil per day.

Speaking today at a signing ceremony in Washington, D.C., ChevronTexaco's chairman and chief executive officer, Dave O'Reilly, said: "ChevronTexaco would like to express its thanks to the government of Angola, Sonangol and our Block 0 Association partners for the constructive approach they have taken in helping to reach this milestone.

"This agreement is the latest highlight in ChevronTexaco's long-term partnership with Angola and underscores our commitment to a country where we have had a presence since the 1930s. It also sends a strong message to the international business community -- that we have found Angola to be a good place to invest. The extension enables the Block 0 Association partners to optimize the further development of Block 0 to the benefit of the Angolan people and the association," O'Reilly said.

In a move welcomed by international observers, Sonangol made public the $210 million "signing bonus" and an additional $80 million "social bonus," part of which will be targeted specifically at Cabinda Province, paid by the association partners under terms of the extension agreement. Referring to the disclosure as "an important step" in the ongoing reconstruction of post-war Angola, Manuel Vicente, chairman and chief executive officer of Sonangol, said: "The government of Angola understands that good governance is a cornerstone of good business and that it is in our own interest to make progress in this important area. Economic growth and stability are critical factors in the reconstruction of Angola and that is why we are working diligently to put in place the financial management systems necessary to facilitate the resumption of normal economic life for Angola's people, to foster international trade and to encourage foreign direct investment in our country."

Adding his comments on the disclosure by Sonangol, Dave O'Reilly said: "ChevronTexaco is fully supportive of the bold move to tackle such a difficult issue as transparency and good governance. The disclosure of the Block 0 signing bonuses is fully in line with what we have long believed and called for: that the effort to address the management of oil revenues should be led by affected governments, not imposed on them by others. We are pleased that President Dos Santos and his administration have taken this step, and we stand by to support their transparency efforts."

Outlining the importance of the extension agreement to ChevronTexaco, George Kirkland, president of ChevronTexaco Overseas Petroleum, said: "Africa is extremely important to us, and our Angola operations, in particular, are a central component of ChevronTexaco's global exploration and production portfolio. The continuing development of Block 0 will be integral to us successfully reaching our target of maximizing the value of our base businesses around the world."

The extension agreement formalizes a previously concluded Heads of Agreement governing the flow of investment monies to major Block 0 capital projects, including the Sanha gas condensate development, which continues on pace and will cut routine flaring on the block by half when it comes fully onstream in early 2005. In addition, with the extension now signed, CABGOC will be able to redouble its efforts around other strategic business aims.

"Today's announcement is not only good news in terms of our ongoing operations and capital investment program in Angola, it also means we can continue to build on the solid progress we have made in other areas, including the steady 'Angolanization' of our work force," said James R. Blackwell, managing director of ChevronTexaco's Southern Africa strategic business unit. "Already, about 63 percent of CABGOC's technical staff and management are Angolan, along with more than 87 percent of the total work force. Under the terms of the extension agreement, we are committed to expanding those numbers so that by 2010 90 percent of those within our technical and managerial ranks will be Angolan.

"We are also keenly aware of the changes currently taking place in Angola," added Blackwell. "The signing of the extension agreement will give further impetus to the social and economic development programs we have put in place to help speed the reconstruction effort throughout the country, as well as to our well-established community and local content programs."

CABGOC also has confirmed it will be proceeding with its plan to open an office in Cabinda City during 2005.

Cautionary Statement Relevant to Forward-Looking Information for the Purpose of "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995.

Some of the items discussed in this press release are forward-looking statements about the significance of the extension of the Angola Block 0 concession and the exploration and production activities in Angola. The statements are based upon management's current expectations, estimates, and projections; are not guarantees of future performance; and are subject to certain risks, uncertainties and other factors, some of which are beyond the company's control and are difficult to predict. Among the factors that could cause actual results to differ materially are future demand for crude oil and natural gas; actions of OPEC; potential delays in the development, construction or start-up of planned projects; inability or failure of the company's joint venture partners to fund their share of development activities and operations; potential failure to achieve expected production from existing and future oil and gas development projects; potential disruptions or interruptions of the company's development activities and operations due to accidents, political events, severe weather, civil unrest or war; local political events and general economic conditions. You should not place undue reliance on these forward-looking statements, which speak only as of the date of the press release. Unless legally required, ChevronTexaco undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

SOURCE ChevronTexaco