Service Stations to be Branded as Texaco

BRAZZAVILLE, REPUBLIC OF THE CONGO, May 14, 2002 – ChevronTexaco Global Energy Inc., a subsidiary of ChevronTexaco, today announced it has signed an agreement with the Republic of the Congo government to invest over $7 million in fuel logistics and distribution operations to enter the Congo downstream market.

The agreement was signed in the capital Brazzaville today by the Republic of the Congo's President of the Privatisation Committee, Gerard Bitsindou, and on behalf of ChevronTexaco by Jules Harvey, general manager of West and Central Africa Products. Under the agreement ChevronTexaco will become an equal 25 percent stakeholder in SCLOG (Societé de Logistique), a fuel logistics joint venture. The new joint venture will consist of ChevronTexaco, the Republic of the Congo government, TotalFinaElf and trading consortium Trafigura/Tacoma. 

In addition, ChevronTexaco will acquire a one-third stake in the country's distribution operation, Hydro Congo, which will see 40 of the republic's 120 service stations branded as Texaco. 

The transfer of assets, which is subject to due diligence and a number of other conditions being met, is expected to take place within three months. A new ChevronTexaco company, which will be integrated into the Europe West Africa Products business unit, will be created to manage the Texaco brand in the Republic of the Congo. 

Commenting on the agreement, Jim Hawn, president of Europe West Africa Products, said: “Entering into the Republic of the Congo fuels market is an excellent opportunity with the potential for unlocking business growth. Although investment will be required to upgrade some assets, petrol retailing in Congo is a market that offers steady volume and good margins. 

“Additionally, the agreement provides us with the logistics infrastructure to access our existing operation in Cameroon as well as the promising central African market. The whole region is showing encouraging signs of steady growth following the moves towards peace,” he added.

ChevronTexaco will undertake a full review of the logistics and service station assets before a Texaco branding programme is rolled out to the 40-strong dealer network. A complete review of the sites, including the assessment of underground tanks, will be undertaken to ensure that ChevronTexaco's rigorous health and safety standards are applied across its Congolese operations. This review will follow the government's own environmental baseline assessment for which it will assume responsibility.

The primary source for refined product will be the government run refinery in Pointe-Noire, which has a throughput of 16,000 barrels per day. If demand exceeds this figure then further product can be imported from ChevronTexaco's refineries in South Africa or Europe. Logistical assets such as the terminals and storage facilities at Pointe-Noire and Brazzaville will require initial investment to upgrade them to the required standards. Other local depots around the country will also receive investment.

“This agreement aligns well with our overall growth strategy for the Republic of the Congo and creates a solid energy portfolio for ChevronTexaco,” noted Jim Pearce, country manager for ChevronTexaco's exploration and production activities. 

Pearce also noted that since 1996, ChevronTexaco has invested over $1 billion in energy-related projects making the company the largest U.S. investor in the Congo. “We've long valued our partnership with the Republic of the Congo and this new agreement is further demonstration of our commitment to the country and our desire to grow additional mutually beneficial business opportunities in the future.”

Distribution of fuel between Pointe-Noire and Brazzaville is primarily by rail. Further inland, beyond Brazzaville, distribution is predominantly by barge along the Congo River, which also provides access to central African countries such as the Democratic Republic of the Congo and the Central African Republic.

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5/14/02

Notes to Editors:

• ChevronTexaco's upstream presence in the Republic of the Congo includes interests in two offshore oilfields producing a total of 70,000 barrels a day. It is also actively involved in exploration and development of new offshore oil fields, along with an electrical power plant at Pointe-Noire. 
• The Republic of the Congo's retail petroleum market totals 1.5 million barrels per year.
•  Crude oil is the largest export product in the Republic of the Congo.

This news release contains forward-looking statements relating to ChevronTexaco's operations that are based on management's current expectations, estimates and projections about the petroleum industry. Words such as “growth,” “opportunity,” “promising,” “projected,” “potential,” “strategy,” and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. 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.