Company Will Focus on Assets More Aligned with Strategic Growth Objectives

SAN RAMON, Calif. and PORT MORESBY, Papua New Guinea, April 10 -- ChevronTexaco today announced plans to sell its interests and resign operatorship of its Papua New Guinea (PNG) joint ventures as part of the company's drive to focus on assets more aligned with strategic growth objectives.

ChevronTexaco said the offer for sale will include all its oil and gas production interests in Kutubu, Moran, Gobe Main and South East Gobe oil fields in PNG's Southern Highlands Province. The joint venture currently produces around 53,000 barrels of oil per day. ChevronTexaco, through its subsidiary Chevron Niugini Ltd (CNGL) holds equity interests in the Kutubu, Moran, Gobe Main and South East Gobe fields, an exploration license and two petroleum retention licenses.

Commenting on the announcement, Peter Robertson, vice chairman of ChevronTexaco Corp., said, "The decision to conclude our business in PNG was a very difficult one given the outstanding relationship the company has been privileged to enjoy over two decades with the people and government of Papua New Guinea. During this time, CNGL and its Joint Venture Participants have invested more than (US) $2.9 billion in PNG exploration, development and production."

Robertson added, "Our decision was a result of the company's ongoing review of its global portfolio following the merger of Chevron and Texaco in October 2001. We believe the associated gas reserves from the operating oil fields make this sale particularly attractive to companies interested in future gas projects in PNG, in addition to the production of oil.

"We will leave an operation in the rainforests of PNG that we believe is unsurpassed in its environmental record and its approach to sustainable development, and we've been delighted with the results achieved through our unique partnership with the World Wild Fund for Nature. We take great pride in this performance and in the recognition we've received both from within the industry and from environmental organizations," said Robertson.

Mike Casey, CNGL's asset manager in PNG, said the company is committed to working with all concerned -- joint venture participants, employees, contractors, landowners, local communities, government officials and the new operator -- to help ensure a safe and smooth transition of operations, environmental stewardship and community support.

"I'm particularly proud of the highly skilled, dedicated and hard-working employees and contractors who have made this venture a success for all stakeholders," said Casey. "My message to any new participant or operator is that this workforce has been a vital part of the success of this venture."

Casey said he was also proud that CNGL and its joint venture participants had contributed significantly to the economic and social development of PNG. CNGL was instrumental in establishing the Community Development Initiatives (CDI) Foundation through which the company and its joint venture participants support community health and education, environmental sustainability and agricultural activities in the Southern Highlands and Gulf provinces. Through the Tax Credit Program, the company supports community infrastructure projects such as schools and health centers.

ChevronTexaco first discovered oil in commercial quantities in the Kutubu region in 1985, with production beginning in 1992. Since then, more than 300 million barrels of oil have been produced.

Sale of ChevronTexaco Interests in PNG

• ChevronTexaco's interests for sale in PNG specifically include Kutubu (PDL2, PL2 - 19.4%); Moran (PDL2 - 8.7%); Gobe Main (PDL4 - 19.4%); South East Gobe (9.4%), (PL3 - 13.7%); PPL219 (25%); PRL2 (21.5%) and PRL3 (25%). CNGL is also resigning as Operator of the Kutubu, Moran, Gobe Main and South East Gobe oil fields.
• Completion of sale and appointment of an operator are expected to be completed by the end of October.
• The new operator will be appointed by the joint venture participants in accordance with the provisions of the existing joint venture operating agreements.
• The joint venture (JV) employs 429 permanent citizens, 40 fixed-term Australian employees and 31 expatriates.

CNGL Community Outreach

• CNGL and its joint venture participants have contributed significantly to the PNG Government and to the people of Papua New Guinea for community engagement projects, including:
• Supporting community health and education projects and environmental and agricultural initiatives through the Community Development Initiatives (CDI) Foundation,
• Supporting the WWF's Kikori Integrated Conservation and Development Project promoting conservation and sustainable development,
• Providing benefits to landowners in the Kikori River catchment through royalties, project equity, development grants, education assistance and infrastructure projects,
• Creating business opportunities for hundreds of employees and contractors,
• Supporting the construction of many community infrastructure projects throughout the Southern Highlands and Gulf Provinces including the Kikori and Pimaga health centers, Kikori station roads, Kagua, Moro and Erave police houses, police stations at Moro and Tari, SHP Administration Centre, and the Wandi Community School.

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

This news release contains forward-looking statements about the sale of interests and operatorship of ChevronTexaco's joint ventures in Papua New Guinea. The statements are based on 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 the identification of a buyer and timing and terms of the sale of the company's interests; local and general economic conditions; and local political events. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this 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