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                          ****************************


                                  PRESS RELEASE

                 CHEVRON AND TEXACO AGREE TO $100 BILLION MERGER
                   CREATING TOP-TIER INTEGRATED ENERGY COMPANY

     ChevronTexaco Corp. to achieve annual savings of at least $1.2 billion
                  and create stronger, more competitive company

SAN FRANCISCO and NEW YORK (October 16, 2000) - Chevron  Corporation [NYSE: CHV]
and Texaco Inc. [NYSE: TX] today announced a merger that will create a company -
ChevronTexaco  Corporation  - that  ranks  with  the  world's  largest  and most
competitive international energy companies.

The merger joins two leading energy companies and long-time partners to create a
U.S.-based,  global  enterprise  that is highly  competitive  across  all energy
sectors.  ChevronTexaco  will have world-class  upstream  positions in reserves,
production and exploration opportunities; an integrated,  worldwide refining and
marketing business; a global chemicals business; significant growth platforms in
natural gas and power; and industry leading skills in technology innovation.

The combined  company expects to achieve annual savings of at least $1.2 billion
within  six to  nine  months  of the  merger's  completion.  The  merger,  to be
accounted for as a pooling of interests,  is expected to become accretive to the
new company's  earnings and cash flow per share upon realization of the savings.
The  company  also  expects to improve  capital  efficiency  by funding the best
growth  opportunities  of Chevron and Texaco,  resulting  in improved  return on
capital employed over time.

The new company  will have  reserves of 11.2 billion  barrels of oil  equivalent
(BOE),  daily  production  of  2.7  million  BOE,  assets  of $77  billion,  and
operations throughout the world. In the United States, ChevronTexaco will be the
nation's third largest  producer of oil and gas, with  production of 1.1 million
BOE per day, and will hold the nation's third largest reserve position, with 4.2
billion BOE of proved reserves.

In the merger,  Texaco  shareholders  will receive .77 shares of Chevron  common
stock for each share of Texaco  common stock they own, and Chevron  shareholders
will retain their existing shares.  The exchange ratio represents  approximately
$64.87 per Texaco  share  based on  Chevron's  closing  stock price of $84.25 on
October 13,  2000.  The  exchange  ratio  represents  an 18% premium  based upon
Texaco's closing share price on October 13, and a 25% premium based upon the two
companies'  average  relative  share  prices  during the 30-day  period  through
October  13.  As  a  result  of  the  merger,   Chevron  shareholders  will  own
approximately 61 percent of the combined equity,  and Texaco  shareholders  will
own about 39 percent.  The combined  company would have an  enterprise  value of
more than $100 billion.

Dave  O'Reilly,  Chevron  chairman and chief  executive  officer,  will serve as
chairman and CEO of ChevronTexaco, which will be headquartered in San Francisco.
Peter  Bijur,  Texaco  chairman  and CEO,  will  become a vice  chairman  of the
combined  company  with  responsibility  for  downstream,  power  and  chemicals
operations.  Richard Matzke, Chevron vice chairman for upstream operations, will
retain those  responsibilities  in the combined company.  The composition of the
ChevronTexaco  Board of  Directors  will be  approximately  proportional  to the
equity  split and will be drawn from  current  members of the Chevron and Texaco
boards.  Chevron  Vice  President  and Chief  Financial  Officer John Watson and
Texaco Senior Vice President and Chief Financial Officer Patrick Lynch will lead
the integration process.

"This merger positions ChevronTexaco as a much stronger U.S.-based global energy
producer better able to contribute to the nation's energy needs," said O'Reilly.
"That's  good  news for the  country  because  the  United  States  will have an
additional top-tier energy company better positioned to compete effectively with
the international majors.

"ChevronTexaco,"  O'Reilly  continued,   "will  create  greater  value  for  the
shareholders  of both  companies.  We'll be  positioned  for stronger  financial
returns  than could be achieved by either  company  separately,  partly  through
significant cost reductions, but mainly because we'll have a much broader mix of
quality assets,  skills,  and technology.  We're committed to being first in our
industry  in  total  shareholder  return,  and  this  transaction  will  help us
accomplish that objective."

Bijur said: "These two companies form a powerful  combination that will have the
strength  and  resources  to compete  and succeed  around the globe.  Texaco and
Chevron are natural  partners,  whose historic  relationship and operational fit
are highly  complementary.  We know each other well,  and we already  have long,
highly  productive   experience  working  together  in  both  the  upstream  and
downstream, giving us an advantage in integrating the companies.

"We also share common values  including  protection of the  environment,  active
support  for the  communities  where we operate,  and  promoting  diversity  and
opportunity in our workforce and among our business partners," Bijur continued.

ChevronTexaco will be much stronger in several important respects:

o         Significant cost savings:  The new company expects to reduce  costs by
          at least  $1.2  billion  per year  within  six to nine  months  of the
          merger's   completion.   The  historic   associations   and  strategic
          compatibility  of Chevron and Texaco will enable rapid  integration of
          the two companies.  The most significant  savings  (approximately $700
          million)  will come from more  efficient  exploration  and  production
          activities,  but other areas will  contribute as well,  including some
          $300 million from the  consolidation  of corporate  functions and $200
          million  from other  operations.  The  companies  anticipate  that the
          combined  workforce of about 57,000 will be reduced by approximately 7
          percent  worldwide.  Anticipated cost savings build on both companies'
          track records of successfully achieving cost reductions.

o         Leadership  position  in  upstream:  The  combined  company will  be a
          premier global  upstream  competitor,  with a  significantly  enhanced
          leadership  position  in  most  of  the  world's  major  and  emerging
          exploration and producing areas.  ChevronTexaco  will have world-class
          reserves and growth  opportunities in both west Africa and the Caspian
          region,  where,  in the latter case, the new company will solidify its
          position as the largest  producer.  In addition,  the combined company
          will  have  a  superior  exploration  acreage  position  in  the  most
          promising deepwater areas in west Africa,  Brazil and the U.S. Gulf of
          Mexico.  The combination will  significantly  strengthen  positions in
          core producing areas in North America and the North Sea. Further,  the
          combination   will   create  an   outstanding   portfolio   of  growth
          opportunities in Latin America and the Asia-Pacific region.

o         Worldwide downstream platform:  ChevronTexaco will create a  worldwide
          business  built  around  the  well-recognized,  international  brands:
          Chevron, Texaco and Caltex. By integrating the operations of Caltex, a
          65-year  international  refining and marketing  joint venture  between
          Chevron  and  Texaco,  the  combined  company  will be able to realize
          efficiencies  from  streamlined  decision-making  and management.  The
          merger also allows an enterprise approach to lubricants (including the
          well-known  quality  lubricants  brands  Havoline and Delo),  trading,
          international  markets and customers,  and will expand on the existing
          fuels and marine  marketing  joint  venture.  In addition,  the merger
          enables the new company to use its brand  presence to help  facilitate
          activities  and new  entries  in the  upstream,  and in gas and  power
          businesses in Asia, Latin America and Europe.

o         Strength  and  scale  in  chemicals:  The  chemicals  business  of the
          combined  company  consists of Chevron's  recently  formed 50/50 joint
          venture,  Chevron  Phillips  Chemical Co. With more than $6 billion in
          assets and $6 billion in revenues, Chevron Phillips Chemical Co. has a
          strong, global position in olefins, polyolefins and aromatics.

o         Leadership   position  in  power   generation:   Texaco's   power  and
          gasification  business,  with equity  interests in 3,500  megawatts of
          power operating or under construction,  and Chevron's 26 percent stake
          in  Dynegy,  Inc.,  give the  combined  company  more  options  in the
          fast-growing power and energy convergence businesses.

o         Broad  technology  portfolio:  The  merger  will  strengthen  the  new
          company's  leading  technologies  in its core  businesses  by bringing
          together  specialized  expertise from the two companies.  The combined
          company will also have a broader  portfolio in advanced  technologies,
          e-business  ventures  and  alternate  energy,  such as fuel  cells and
          gas-to-liquids conversion.

o         Superior  organizational  capability:  The  capabilities  of  the  new
          company will be  strengthened  by the  combination of people from both
          Chevron  and  Texaco  who have the  diverse  skills,  talent  and vast
          experience  to compete  successfully  in an  increasingly  competitive
          industry.  The merged  company  also gains an  advantage  with  proven
          leadership in many facets of the global,  integrated  energy  business
          and a track record of success in executing key strategies.

The merger is conditioned,  among other things, on shareholder approval for both
companies,  pooling accounting treatment for the merger and regulatory approvals
of government  agencies such as the U.S. Federal Trade  Commission.  Chevron and
Texaco  anticipate  that the FTC will require  certain  divestitures in the U.S.
downstream in order to address market  concentration  issues,  and the companies
intend to cooperate with the FTC in this process.  In that regard,  Texaco is in
discussions with its partners in the U.S. downstream.

Lehman Brothers Inc. is acting as financial advisor to Chevron. Al Pepin; Fried,
Frank, Harris,  Shriver & Jacobson;  and Pillsbury Madison & Sutro are acting as
legal  advisors to Chevron.  Credit Suisse First Boston and Morgan  Stanley Dean
Witter are acting as  financial  advisors;  and Davis Polk &  Wardwell;  Howrey,
Simon, Arnold & White; and Weil Gotshal & Manges are acting as legal advisors to
Texaco.

Chevron  Corp.  is involved in every  aspect of the oil and gas  industry,  from
exploration and production to transportation,  refining and retail marketing, as
well as chemicals  manufacturing and sales. It is active in nearly 100 countries
and employs about 31,000 people worldwide.

Texaco Inc. is a fully  integrated  energy company  engaged in exploring for and
producing oil and natural gas;  manufacturing and marketing  high-quality  fuels
and lubricant  products;  operating  trading,  transportation  and  distribution
facilities;  and  producing  power.  Directly  and  through  affiliates,  Texaco
operates in more than 150 countries.

Private Securities Litigation Reform Act Safe Harbor Statement
Except for the historical and present factual information  contained herein, the
matters set forth in this press release, including statements as to the expected
benefits of the merger such as  efficiencies,  cost savings,  market profile and
financial  strength,  and the  competitive  ability and position of the combined
company, and other statements identified by words such as "expects," "projects,"
"plans,"  and similar  expressions  are  forward-looking  statements  within the
meaning of the "safe  harbor"  provisions of the Private  Securities  Litigation
Reform Act of 1995.  These  forward-looking  statements are subject to risks and
uncertainties that may cause actual results to differ materially,  including the
possibility  that the  anticipated  benefits  from the  merger  cannot  be fully
realized,  the possibility that costs or difficulties related to the integration
of our businesses  will be greater than expected,  the impact of competition and
other risk  factors  relating to our  industry as detailed  from time to time in
each of Chevron's and Texaco's  reports  filed with the SEC.  Chevron and Texaco
disclaim any responsibility to update these forward-looking statements.

Additional Information
Chevron and Texaco  will file a proxy  statement/prospectus  and other  relevant
documents concerning the proposed merger transaction with the SEC. Investors are
urged to read the proxy  statement/prospectus  when it becomes available and any
other relevant  documents filed with the SEC because they will contain important
information.  You will be able to  obtain  the  documents  free of charge at the
website  maintained  by the SEC at  www.sec.gov.  In  addition,  you may  obtain
documents  filed with the SEC by Chevron  free of charge by  requesting  them in
writing from Chevron  Corporation,  575 Market Street, San Francisco,  CA 94105,
Attention:  Corporate  Secretary,  or by  telephone at (415)  894-7700.  You may
obtain  documents filed with the SEC by Texaco free of charge by requesting them
in writing from Texaco Inc., 2000  Westchester  Avenue,  White Plains,  New York
10650, Attention: Secretary, or by telephone at (914) 253-4000.

Chevron and Texaco, and their respective  directors and executive officers,  may
be  deemed  to  be  participants  in  the   solicitation  of  proxies  from  the
stockholders  of Chevron and Texaco in connection  with the merger.  Information
about the  directors and  executive  officers of Chevron and their  ownership of
Chevron  stock is set forth in the proxy  statement  for  Chevron's  2000 Annual
Meeting of stockholders.  Information about the directors and executive officers
of  Texaco  and  their  ownership  of  Texaco  stock is set  forth in the  proxy
statement for Texaco's 2000 Annual Meeting of stockholders. Investors may obtain
additional  information  regarding the interests of such participants by reading
the proxy statement / prospectus when it becomes available.

Investors should read the proxy  statement/prospectus  carefully when it becomes
available before making any voting or investment decisions.

You may also listen to the analyst briefing via the Internet at  www.chevron.com
and  www.texaco.com  at 10:00 a.m. EDT.  Real  Network's  RealPlayer,  Microsoft
Windows  Media  Player or Apple's  Quicktime  Player is  required  to access the
webcast.

Today's  news  release,  along  with other news about  Chevron  and  Texaco,  is
available  on  the  Internet  at  www.chevron.com    and
www.texaco.com .

                                      # # #

To All Texaco Employees:

Today we are  announcing a merger with Chevron to create a new company that will
propel us into the  front  ranks of the  world's  largest  and most  competitive
integrated  energy  companies.  The new  company  -- to be called  ChevronTexaco
Corporation -- unites two organizations with a shared history to create a global
energy leader that can compete across all aspects of our business.  The attached
news release offers further detail on this announcement.

         Highlights of the combined company include:

o        U.S.-based  top-tier  enterprise  with  expanded  scale and  scope;
o        Premier positions in exploration and production;
o        Unified and highly competitive downstream business with a global reach;
o        Leadership  position  in  the  fast-growing  natural  gas  and  power
         sectors;
o        World-class chemicals business; and
o        Platform for future business in the advanced  energy  technology and
         e-commerce arenas.

         Texaco  and  Chevron  share  a  record  of six  decades  of  successful
collaboration in both the upstream and downstream. Our companies both have proud
histories,  a passion  for growth and  innovation;  and we share a common set of
core  values,  including  the  protection  of the  people  and  the  environment
everywhere  we operate,  and a commitment  to fostering a workplace  environment
that promotes diversity.  Together,  we will have a unified culture in which the
best people and  practices  from each company will  flourish and knit us quickly
into an even more successful enterprise.

         Our  entire  management team  has  been  singularly focused on creating
maximum value for our  shareholders,  and I have said on many  occasions that we
would consider all options to achieve this objective.

         The reason that we did not  undertake a merger with  Chevron  last year
was that the time, circumstances and situation were just not right. However, the
industry landscape  continues to change and it is increasingly  apparent to both
companies that future success in the energy sector requires  financial  strength
and scale, and that the market rewards size.  Consequently,  after reviewing all
the options  currently  before us, our respective  boards  determined  that this
combination holds the greatest opportunity for maximizing shareholder value.

         While this merger will involve many changes, it is intended, above all,
to make  our  combined  company  more  competitive  and to  enhance  its  growth
potential. The new company will draw from the best of both companies to create a
new global  energy  leader that can compete  with the largest  companies  in our
industry now and well into the future.

         We recognize that this  announcement will generate many questions and a
level of  uncertainty  for you.  I pledge to you  that,  as we  progress  toward
completion of this merger,  we will  communicate with you on a regular basis and
we will be as sensitive as we can be to your concerns.

         This proposed merger is subject to regulatory and shareholder approval,
which we anticipate will take a number of months.  No doubt,  you will have many
questions,  and we will work hard to answer them.  During this  period,  we will
communicate  with you on a regular  basis via  employee  meetings,  letters  and
e-mail communications such as this, and via our Intranet site, @texaco.

         Finally, on behalf of the entire management team, I want to express our
profound   gratitude  for  your  consistent   excellence  that  has  built  this
outstanding enterprise. Going forward, it is important to keep in mind that this
is simply the beginning of a process,  and it is in our  collective  interest to
remain focused on our objective of creating value for our  shareholders,  and in
delivering quality products and services to our customers.

         Peter I. Bijur

                          -----------------------------

                                  PRESS RELEASE

                 CHEVRON AND TEXACO AGREE TO $100 BILLION MERGER
                   CREATING TOP-TIER INTEGRATED ENERGY COMPANY

     ChevronTexaco Corp. to achieve annual savings of at least $1.2 billion
                  and create stronger, more competitive company

SAN FRANCISCO and NEW YORK (October 16, 2000) - Chevron  Corporation [NYSE: CHV]
and Texaco Inc. [NYSE: TX] today announced a merger that will create a company -
ChevronTexaco  Corporation  - that  ranks  with  the  world's  largest  and most
competitive international energy companies.

The merger joins two leading energy companies and long-time partners to create a
U.S.-based,  global  enterprise  that is highly  competitive  across  all energy
sectors.  ChevronTexaco  will have world-class  upstream  positions in reserves,
production and exploration opportunities; an integrated,  worldwide refining and
marketing business; a global chemicals business; significant growth platforms in
natural gas and power; and industry leading skills in technology innovation.

The combined  company expects to achieve annual savings of at least $1.2 billion
within  six to  nine  months  of the  merger's  completion.  The  merger,  to be
accounted for as a pooling of interests,  is expected to become accretive to the
new company's  earnings and cash flow per share upon realization of the savings.
The  company  also  expects to improve  capital  efficiency  by funding the best
growth  opportunities  of Chevron and Texaco,  resulting  in improved  return on
capital employed over time.

The new company  will have  reserves of 11.2 billion  barrels of oil  equivalent
(BOE),  daily  production  of  2.7  million  BOE,  assets  of $77  billion,  and
operations throughout the world. In the United States, ChevronTexaco will be the
nation's third largest  producer of oil and gas, with  production of 1.1 million
BOE per day, and will hold the nation's third largest reserve position, with 4.2
billion BOE of proved reserves.

In the merger,  Texaco  shareholders  will receive .77 shares of Chevron  common
stock for each share of Texaco  common stock they own, and Chevron  shareholders
will retain their existing shares.  The exchange ratio represents  approximately
$64.87 per Texaco  share  based on  Chevron's  closing  stock price of $84.25 on
October 13,  2000.  The  exchange  ratio  represents  an 18% premium  based upon
Texaco's closing share price on October 13, and a 25% premium based upon the two
companies'  average  relative  share  prices  during the 30-day  period  through
October  13.  As  a  result  of  the  merger,   Chevron  shareholders  will  own
approximately 61 percent of the combined equity,  and Texaco  shareholders  will
own about 39 percent.  The combined  company would have an  enterprise  value of
more than $100 billion.

Dave  O'Reilly,  Chevron  chairman and chief  executive  officer,  will serve as
chairman and CEO of ChevronTexaco, which will be headquartered in San Francisco.
Peter  Bijur,  Texaco  chairman  and CEO,  will  become a vice  chairman  of the
combined  company  with  responsibility  for  downstream,  power  and  chemicals
operations.  Richard Matzke, Chevron vice chairman for upstream operations, will
retain those  responsibilities  in the combined company.  The composition of the
ChevronTexaco  Board of  Directors  will be  approximately  proportional  to the
equity  split and will be drawn from  current  members of the Chevron and Texaco
boards.  Chevron  Vice  President  and Chief  Financial  Officer John Watson and
Texaco Senior Vice President and Chief Financial Officer Patrick Lynch will lead
the integration process.

"This merger positions ChevronTexaco as a much stronger U.S.-based global energy
producer better able to contribute to the nation's energy needs," said O'Reilly.
"That's  good  news for the  country  because  the  United  States  will have an
additional top-tier energy company better positioned to compete effectively with
the international majors.

"ChevronTexaco,"  O'Reilly  continued,   "will  create  greater  value  for  the
shareholders  of both  companies.  We'll be  positioned  for stronger  financial
returns  than could be achieved by either  company  separately,  partly  through
significant cost reductions, but mainly because we'll have a much broader mix of
quality assets,  skills,  and technology.  We're committed to being first in our
industry  in  total  shareholder  return,  and  this  transaction  will  help us
accomplish that objective."

Bijur said: "These two companies form a powerful  combination that will have the
strength  and  resources  to compete  and succeed  around the globe.  Texaco and
Chevron are natural  partners,  whose historic  relationship and operational fit
are highly  complementary.  We know each other well,  and we already  have long,
highly  productive   experience  working  together  in  both  the  upstream  and
downstream, giving us an advantage in integrating the companies.

"We also share common values  including  protection of the  environment,  active
support  for the  communities  where we operate,  and  promoting  diversity  and
opportunity in our workforce and among our business partners," Bijur continued.

ChevronTexaco will be much stronger in several important respects:

o         Significant cost savings:  The new company expects to reduce  costs by
          at least  $1.2  billion  per year  within  six to nine  months  of the
          merger's   completion.   The  historic   associations   and  strategic
          compatibility  of Chevron and Texaco will enable rapid  integration of
          the two companies.  The most significant  savings  (approximately $700
          million)  will come from more  efficient  exploration  and  production
          activities,  but other areas will  contribute as well,  including some
          $300 million from the  consolidation  of corporate  functions and $200
          million  from other  operations.  The  companies  anticipate  that the
          combined  workforce of about 57,000 will be reduced by approximately 7
          percent  worldwide.  Anticipated cost savings build on both companies'
          track records of successfully achieving cost reductions.

o         Leadership  position  in  upstream:  The  combined  company will  be a
          premier global  upstream  competitor,  with a  significantly  enhanced
          leadership  position  in  most  of  the  world's  major  and  emerging
          exploration and producing areas.  ChevronTexaco  will have world-class
          reserves and growth  opportunities in both west Africa and the Caspian
          region,  where,  in the latter case, the new company will solidify its
          position as the largest  producer.  In addition,  the combined company
          will  have  a  superior  exploration  acreage  position  in  the  most
          promising deepwater areas in west Africa,  Brazil and the U.S. Gulf of
          Mexico.  The combination will  significantly  strengthen  positions in
          core producing areas in North America and the North Sea. Further,  the
          combination   will   create  an   outstanding   portfolio   of  growth
          opportunities in Latin America and the Asia-Pacific region.

o         Worldwide downstream platform:  ChevronTexaco will create a  worldwide
          business  built  around  the  well-recognized,  international  brands:
          Chevron, Texaco and Caltex. By integrating the operations of Caltex, a
          65-year  international  refining and marketing  joint venture  between
          Chevron  and  Texaco,  the  combined  company  will be able to realize
          efficiencies  from  streamlined  decision-making  and management.  The
          merger also allows an enterprise approach to lubricants (including the
          well-known  quality  lubricants  brands  Havoline and Delo),  trading,
          international  markets and customers,  and will expand on the existing
          fuels and marine  marketing  joint  venture.  In addition,  the merger
          enables the new company to use its brand  presence to help  facilitate
          activities  and new  entries  in the  upstream,  and in gas and  power
          businesses in Asia, Latin America and Europe.

o         Strength  and  scale  in  chemicals:  The  chemicals  business  of the
          combined  company  consists of Chevron's  recently  formed 50/50 joint
          venture,  Chevron  Phillips  Chemical Co. With more than $6 billion in
          assets and $6 billion in revenues, Chevron Phillips Chemical Co. has a
          strong, global position in olefins, polyolefins and aromatics.

o         Leadership   position  in  power   generation:   Texaco's   power  and
          gasification  business,  with equity  interests in 3,500  megawatts of
          power operating or under construction,  and Chevron's 26 percent stake
          in  Dynegy,  Inc.,  give the  combined  company  more  options  in the
          fast-growing power and energy convergence businesses.

o         Broad  technology  portfolio:  The  merger  will  strengthen  the  new
          company's  leading  technologies  in its core  businesses  by bringing
          together  specialized  expertise from the two companies.  The combined
          company will also have a broader  portfolio in advanced  technologies,
          e-business  ventures  and  alternate  energy,  such as fuel  cells and
          gas-to-liquids conversion.

o         Superior  organizational  capability:  The  capabilities  of  the  new
          company will be  strengthened  by the  combination of people from both
          Chevron  and  Texaco  who have the  diverse  skills,  talent  and vast
          experience  to compete  successfully  in an  increasingly  competitive
          industry.  The merged  company  also gains an  advantage  with  proven
          leadership in many facets of the global,  integrated  energy  business
          and a track record of success in executing key strategies.

The merger is conditioned,  among other things, on shareholder approval for both
companies,  pooling accounting treatment for the merger and regulatory approvals
of government  agencies such as the U.S. Federal Trade  Commission.  Chevron and
Texaco  anticipate  that the FTC will require  certain  divestitures in the U.S.
downstream in order to address market  concentration  issues,  and the companies
intend to cooperate with the FTC in this process.  In that regard,  Texaco is in
discussions with its partners in the U.S. downstream.

Lehman Brothers Inc. is acting as financial advisor to Chevron. Al Pepin; Fried,
Frank, Harris,  Shriver & Jacobson;  and Pillsbury Madison & Sutro are acting as
legal  advisors to Chevron.  Credit Suisse First Boston and Morgan  Stanley Dean
Witter are acting as  financial  advisors;  and Davis Polk &  Wardwell;  Howrey,
Simon, Arnold & White; and Weil Gotshal & Manges are acting as legal advisors to
Texaco.

Chevron  Corp.  is involved in every  aspect of the oil and gas  industry,  from
exploration and production to transportation,  refining and retail marketing, as
well as chemicals  manufacturing and sales. It is active in nearly 100 countries
and employs about 31,000 people worldwide.

Texaco Inc. is a fully  integrated  energy company  engaged in exploring for and
producing oil and natural gas;  manufacturing and marketing  high-quality  fuels
and lubricant  products;  operating  trading,  transportation  and  distribution
facilities;  and  producing  power.  Directly  and  through  affiliates,  Texaco
operates in more than 150 countries.

Private Securities Litigation Reform Act Safe Harbor Statement
Except for the historical and present factual information  contained herein, the
matters set forth in this press release, including statements as to the expected
benefits of the merger such as  efficiencies,  cost savings,  market profile and
financial  strength,  and the  competitive  ability and position of the combined
company, and other statements identified by words such as "expects," "projects,"
"plans,"  and similar  expressions  are  forward-looking  statements  within the
meaning of the "safe  harbor"  provisions of the Private  Securities  Litigation
Reform Act of 1995.  These  forward-looking  statements are subject to risks and
uncertainties that may cause actual results to differ materially,  including the
possibility  that the  anticipated  benefits  from the  merger  cannot  be fully
realized,  the possibility that costs or difficulties related to the integration
of our businesses  will be greater than expected,  the impact of competition and
other risk  factors  relating to our  industry as detailed  from time to time in
each of Chevron's and Texaco's  reports  filed with the SEC.  Chevron and Texaco
disclaim any responsibility to update these forward-looking statements.

Additional Information
Chevron and Texaco  will file a proxy  statement/prospectus  and other  relevant
documents concerning the proposed merger transaction with the SEC. Investors are
urged to read the proxy  statement/prospectus  when it becomes available and any
other relevant  documents filed with the SEC because they will contain important
information.  You will be able to  obtain  the  documents  free of charge at the
website  maintained  by the SEC at  www.sec.gov.  In  addition,  you may  obtain
documents  filed with the SEC by Chevron  free of charge by  requesting  them in
writing from Chevron  Corporation,  575 Market Street, San Francisco,  CA 94105,
Attention:  Corporate  Secretary,  or by  telephone at (415)  894-7700.  You may
obtain  documents filed with the SEC by Texaco free of charge by requesting them
in writing from Texaco Inc., 2000  Westchester  Avenue,  White Plains,  New York
10650, Attention: Secretary, or by telephone at (914) 253-4000.

Chevron and Texaco, and their respective  directors and executive officers,  may
be  deemed  to  be  participants  in  the   solicitation  of  proxies  from  the
stockholders  of Chevron and Texaco in connection  with the merger.  Information
about the  directors and  executive  officers of Chevron and their  ownership of
Chevron  stock is set forth in the proxy  statement  for  Chevron's  2000 Annual
Meeting of stockholders.  Information about the directors and executive officers
of  Texaco  and  their  ownership  of  Texaco  stock is set  forth in the  proxy
statement for Texaco's 2000 Annual Meeting of stockholders. Investors may obtain
additional  information  regarding the interests of such participants by reading
the proxy statement / prospectus when it becomes available.

Investors should read the proxy  statement/prospectus  carefully when it becomes
available before making any voting or investment decisions.

You may also listen to the analyst briefing via the Internet at  www.chevron.com
and  www.texaco.com  at 10:00 a.m. EDT.  Real  Network's  RealPlayer,  Microsoft
Windows  Media  Player or Apple's  Quicktime  Player is  required  to access the
webcast.

Today's  news  release,  along  with other news about  Chevron  and  Texaco,  is
available  on  the  Internet  at  www.chevron.com    and
www.texaco.com .

                                      # # #

       [Chairman's Oral Statement to Texaco Employees on October 16, 2000]

As you know,  Texaco has announced  plans to merge with Chevron to create one of
the world's largest, strongest and most competitive energy companies.

I want to  share  with  you  some of the  details  of this  new  chapter  in our
company's history, and to explain the rationale behind the merger.

I hope  you  will  spend  some  time  reviewing  the news  release  and  related
information that we've sent to you -- which is also available on the Internet. I
encourage you to discuss this proposed  merger with your  management team leader
and fellow  employees.  It is important  that we all  understand  the compelling
reasons for this combination.

As we explain in the news release, this merger raises our company into the ranks
of the world's  largest  international  energy  companies  -- one that is highly
competitive across all energy sectors,  and in all regions. The new company will
be named ChevronTexaco and will be headquarted in San Francisco.

o        ChevronTexaco  will be a  world-class  player in the  dynamic  upstream
         sector,  with  strong  positions  in  production  and  reserves,  and a
         collection of high impact opportunities.

o    The new company will be a fully  integrated  global  refining and marketing
     business with greater opportunity for success in this fiercely  competitive
     sector;

2 o In gas and power operations, the merger will give ChevronTexaco broader options for continued expansion in this fast growing sector; o Petrochemicals will also be an important part of ChevronTexaco's worldwide activities. o And, in addition to leveraging technology to strengthen its core businesses, the new company intends to remain at the front edge of advanced technologies and e-business initiatives. Altogether, this will be a very competitive enterprise. (pause) Now let me touch upon the rationale behind our Board's decision to move forward with this merger. Our entire management team has been singularly focused on creating maximum value for our shareholders, and I have said on many occasions that we would consider all options to achieve this objective. Many of you may ask, " Why didn't you complete this merger last year?" Plain and simple: the time, circumstances and situation were simply not right at that time. The industry landscape has continued to change, and it is apparent to both companies that future success in the energy sector increasingly requires financial strength and scale, and that the market size is important. We see that with BP, and with ExxonMobil.

3 So, after reviewing all the options before us, our respective boards determined that this combination holds the greatest opportunity for maximizing shareholder value. (pause) This combination is right for many reasons. First, we will form a substantially stronger company with the scale and financial resources necessary to fully capitalize on the attractive opportunities that each of you have helped to create. The new company will have combined revenues of about $120 billion dollars and an enterprise value of more than $100 billion dollars. Second, our operations and assets are highly complementary. Our production and exploration portfolios are a perfect match in location, quality and timing of projects, and the new company will hold sizeable positions in some of the most significant producing regions of the world, including the Caspian, Europe, the Middle East, West Africa, South America, Asia and, of course, the United States. We will truly be a global upstream leader - clearly one of the "Super Majors." In the downstream, we will be creating a world-class business built around a family of well-known brands that share a common hallmark of excellence. By integrating operations of Caltex, the combined company will be able to create a seamless, more efficient organization in one of the fastest growing regions in the world. In addition, the Texaco brand will continue to fly above our world-class refining and marketing businesses in Europe and the big growth areas of Latin America, the Caribbean and West Africa, where we already enjoy a premium position in the marketplace.

4 The Havoline brand will remain a global symbol of quality lubricant products. In the U.S., given the overlap between Chevron's downstream business and the operations of our Alliance companies, we do anticipate that the government will require certain divestitures in order to address market concentration issues. Nevertheless, this new company will remain a strong competitor in this very important market. (pause) By combining Texaco and Chevron we will be well positioned to seize opportunities to fully exploit our attractive assets, while also creating a platform to realize synergies in excess of a billion dollars. The strong relationships we have forged with Chevron will be a key to our future success. Our two companies have a shared history that is unique in our industry. We have a common set of core values and 65 years of successfully working together in Caltex and other ventures. Together, we will have a unified culture in which the best people and practices from each company will flourish and knit us quickly into an even more successful enterprise. What all this means is that we can do more than compete. We can and will succeed. (pause) Now that's a snapshot of what the combined company will look like. I'd like to turn now to the question that I know must be on your minds. What does this mean for you? Where do you fit into this new company?

5 I know this announcement will create some anxiety for you, your colleagues and your families. And I commit to you that we will do our very best to communicate with you on a regular basis as we make progress toward a completion of the merger. Commencing with the signing of this merger agreement, we have established a transition team that will be jointly led by Chevron Vice President and CFO John Watson and Pat Lynch, our Senior Vice President and CFO. This team will review the issues we will need to address to ensure a smooth and efficient integration of the companies once we complete the merger, and will oversee efforts in the coming months to ensure that we tap into the best and the brightest from both companies. (pause) On the issue of transition to the new company, it's essential to keep in mind two key points: o First, our goal is to create even more growth and opportunity than we could on our own; and o Second, we have as good a team around the world as any company in the industry. This will distinguish us among our industry competitors. (pause) In recent weeks, as our discussions with Chevron progressed, it became quite clear to me how compatible our two companies really are; both in terms of assets and operations, but also in terms of our values, our work ethic and our commitment to our shareholders, customers and employees. This is the reason I am so confident that we will be able to achieve our common goal of creating a truly global enterprise from two very strong energy companies.

6 Before closing, I do want to say a few words about process. This proposed merger will require the review and approval of various regulatory agencies and, of course, approval of the shareholders of the two companies. This process will take a number of months, and we're optimistic that we will secure all necessary approvals. During this period, it is vitally important that we continue to perform at the level of excellence that we are accustomed to. The greater value we can create during this period; the more beneficial it will be for our shareholders when this merger is completed. And since many of you are shareholders, it's in our collective interest to remain focused on the objective of maximizing shareholder value. (pause) On a more personal note, I want you to know that this combination is one that we do not enter into lightly, and our management team appreciates the anxiety and uncertainty that this creates for many of you. I can assure you that the transition team, as it begins its work, will honor the maxim that is at the core of our values: "Respect for the Individual." We will communicate, and we will be as sensitive as we can to your concerns. (pause) As custodians of a nearly century-old enterprise, our responsibility is to take the steps that will ensure the strongest possible future... that creates the greatest possible growth in the business... that delivers the most value for our shareholders... and that opens up the most promising paths of opportunity for our employees.

7 The combination of Texaco and Chevron lives up to that responsibility. It allows us to compete with the largest companies in our industry now and well into the future, and succeed across all lines of our business. Together, these great brands will symbolize excellence the world over. Thank you. # # # * * * [Presentation materials for Analyst Briefing October 16, 2000] - -------------------------------------------------------------- ChevronTexaco Corporation Dave O'Reilly Peter Bijur Chairman & CEO Chairman & CEO Chevron Corporation Texaco Inc. 1

Safe Harbor Statement - -------------------------------------------------------------------------------- Private Securities Litigation Reform Act Safe Harbor Statement Except for the historical and present factual information contained herein, the matters set forth in this presentation, including statements as to the expected benefits of the merger such as efficiencies, cost savings, market profile and financial strength, and the competitive ability and position of the combined company, and other statements identified by words such as "expects," "projects," "plans," and similar expressions are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the possibility that the anticipated benefits from the merger cannot be fully realized, the possibility that costs or difficulties related to the integration of our businesses will be greater than expected, the impact of competition and other risk factors relating to our industry as detailed from time to time in each of Chevron's and Texaco's reports filed with the SEC. Chevron and Texaco disclaim any responsibility to update these forward-looking statements. 2

Agenda - -------------------------------------------------------------------------------- * Strategic Rationale * Transaction Summary * Business Overview * Financial Results * Synergy and Integration * Conclusion 3

Strategic Rationale - -------------------------------------------------------------------------------- This combination creates: * U.S.-based, top-tier global energy company with expanded scale, scope and competitiveness * Premier global upstream with leading positions in prime exploration and producing areas * Unified global downstream business built around three well-known international brands * Expanded growth opportunities in power and advanced technologies * Strengthened organizational capability to achieve #1 in total shareholder return 4

Strategic Rationale - -------------------------------------------------------------------------------- Financial Benefits include: * Substantial recurring cost savings of at least $1.2 billion per year * Accretive to operational earnings and cash flow per share within 6-9 months of merger close * Capital efficiency through high grading, best practices, and procurement integration * Higher ROCE over time * Enhanced shareholder value 5

Key Transaction Terms - -------------------------------------------------------------------------------- * Tax-free exchange of stock at ratio of .77 Chevron: 1 Texaco * Equity ownership split: 61% Chevron / 39% Texaco * Principal conditions to close - Shareholder approvals - Regulatory clearances - Pooling accounting 6

Governance and Management - -------------------------------------------------------------------------------- * Board composition to include 9 Chevron directors and 6 Texaco directors * Principal Officers - Dave OReilly Chairman & CEO - Richard Matzke Vice Chairman Upstream - Peter Bijur Vice Chairman Downstream, Chemicals & Power * Integration process to be led by - John Watson, Chevron CFO - Patrick Lynch, Texaco CFO * Headquarters: San Francisco 7

Combined Global Upstream Joins "Super Major" League - -------------------------------------------------------------------------------- (CHART) (Graph X axis = Reserves (BBOE); Y axis = Production (MMBOED)). (Plot shows Chevron and Texaco individually as being larger than ENI, Phillips, Conoco, Oxy, Marathon, Repsol and Hess (except for ENI reserves that are larger than Texaco) but all are grouped in the lower left quadrant of the graph in the same general category as to size. All of these companies are shown as being much smaller than TotalFinaElf, BP, RD Shell and Exxon Mobil.) (Plot also shows Chevron and Texaco combined as significantly increased in size larger than TotalFinaElf and smaller than BP, RD Shell and Exxon Mobil. A circle is drawn around all of these companies to indicate the same general category as to size grouped in the upper right quadrant and all being significantly larger than the other companies on the chart. Note at the bottom of the chart indicates 1999 data with pro forma adjustments for significant 2000 acquisitions and divestitures.) 8

Combined Global Upstream Expanded Scale, Scope and Growth Opportunities - -------------------------------------------------------------------------------- (MAP) (Content: Map of the world showing locations of major production areas. Circles are drawn around general location of production on the continents. Dots within the circles are colored differently to show Texaco and Chevron. Connotes joint presence in many major producing areas:) (North America 1210 MBOED) (Europe 220 MBOED) (Caspian 135 MBOED) (South America 115 MBOED) (West Africa 370 MBOED) (Asia Pacific 500 MBOED) (Middle East 140 MBOED) (Also shows 2 bar charts:) (Reserves BBOE: Chevron 6.3; Texaco 4.9; Total ChevronTexaco 11.2 Production MMBOED: Chevron 1.6; Texaco 1.1; Total ChevronTexaco 2.7 Reserves data is year-end 1999 and production data is 1st half 2000) 9

Combined Global Upstream - North America Top Tier in U.S. Production - -------------------------------------------------------------------------------- * Significantly strengthened position in core areas: GOM Shelf - # 1 producer GOM Deepwater - # 1 acreage position San Joaquin Valley - Low-cost producer * Existing growth positions in Canadian frontiers (BAR CHART) (Bar Chart showing 2Q 2000 U.S. Production (MBOED)) (Bars in descending order of production BP, ExxonMobil, ChevronTexaco, RD Shell, Texaco and Chevron. Indicates Chevron and Texaco individually as having less than half of the production each of BP and ExxonMobil but ChevronTexaco combined having nearly the same production as BP and ExxonMobil and significantly more than RD Shell.) 10

Combined Global Upstream - West Africa Broadened Growth Platform - -------------------------------------------------------------------------------- * Increased scale and scope Angola - #1 producer - Expanded deepwater position Nigeria - #2 producer - #1 deepwater acreage position Strong positions in 6 other countries in region West Africa: ChevronTexaco Position Net Reserves (BBOE) 1.6 Net Production (MBOED) 370 (MAP) (Map with dots showing the Chevron and Texaco production areas onshore and offshore West Africa Namibia, Angola, DRC, Congo, EG, Cameroon, Chad and Nigeria.) 11

Combined Global Upstream - Caspian Region Solidified Leader Position - -------------------------------------------------------------------------------- * #1 producer in region with significant upside Tengiz - 700 MBOED by 2010 Karachaganak - 375 MBOED by 2003 Caspian Pipeline - Start-up 2001 Absheron - First well 2001 North Buzachi - 30 well program Caspian: ChevronTexaco Position Net Reserves (BBOE) 1.8 Net Production (MBOED) 135 (MAP) (Map with dots showing Chevron and Texaco production areas in the Caspian Region Kazakhstan and Azerbaijan. Caspian Pipeline depicted running from northeastern edge of Caspian Sea area westward to the Black Sea port of Novorossiysk.) 12

Combined Global Upstream - South America Expanded Portfolio - -------------------------------------------------------------------------------- * Positioned for growth Venezuela - #1 foreign producer Brazil - #1 exploration position with 9 deepwater blocks Argentina - Growing production Natural gas opportunities South America: ChevronTexaco Position Net Reserves (BBOE) * 0.5 Net Production (MBOED) 115 * Excludes Boscan (MAP) (Map with dots showing Chevron and Texaco exploration and production areas in South America Trinidad, Venezuela, Colombia, Brazil and Argentina.) 13

Combined Global Upstream - Asia Pacific Strengthened Positions - -------------------------------------------------------------------------------- * Enhanced scale and efficiency - Indonesia - China * Expanded gas platforms - Australia - Philippines - Thailand Asia Pacific: ChevronTexaco Position Net Reserves (BBOE) 1.9 Net Production (MBOED) 500 (MAP) (Map with dots showing exploration and production areas in Asia Pacific China, Philippines, Thailand, Indonesia, PNG and Australia.) 14

Global R&M Business Combined Portfolio - -------------------------------------------------------------------------------- (WORLD MAP) (Content: World map showing Chevron, Texaco and Caltex Marketing areas and Refinerie) (Adjusted 1999 refinery capacities shown: North America 1.653 MBD, Europe 314 MBD, Africa 454 MBD, Asia Pacific 394 MBD.) (Two bar charts embedded showing combined refinery capacity and product sales in 1H00 made up of U.S. 100 %, U.S. JVs, Caltex and Other. Total refinery capacity slightly less than 3,000 MBD and sales slightly more than 5,000 MBD.) 15

Global R&M Business Integration Potential - -------------------------------------------------------------------------------- * Creates worldwide business built around a family of well-recognized international brands * Integrates Caltex for streamlined decision-making and simplified governance * Allows integrated approach to lubricants, trading and risk management * Leverages brand presence into upstream, downstream gas and power value chains * Strong market positions in U.S., Latin America, U.K., and Caltex areas. 16

Chemicals World Class Competitor - -------------------------------------------------------------------------------- * Chevron Phillips Chemical Company has the scale and technology to compete effectively on a global basis - $6 billion in assets and revenues - Top 5 in key olefins and aromatics markets * Additives and specialty chemicals (BAR CHART) (Bar chart in Billion Pounds per Year in descending order for: Ethylene (about 8 billion), Aromatics (about 7 billion), Polyethylene (about 5.5 billion), Propylene (about 2.5 billion) and Styrene (just under 2 billion). Connotes significant volumes of production for each product.) 17

Gas and Power Leading Position in a Growth Sector - -------------------------------------------------------------------------------- * Creates strong platforms for growth in natural gas and power worldwide - 26% ownership of Dynegy + Leading provider of energy products and services in North America and Europe - Global power business + 3500 MW of capacity 18

Technology Broadened Portfolio - -------------------------------------------------------------------------------- * Provides expanded technology base - Broader array of tools and know-how to support core businesses + Gasification + Reservoir management technologies - Leading technology positions in environmentally friendly energy diversification + Gas-to-liquids + Fuel cells - Leadership in emerging technologies + E-Commerce utilization + Venture capital investments 19

Organizational Capability Strengthened Through Diverse Skills and Talent - -------------------------------------------------------------------------------- * Vast talent and experience in critical core business skills and technology innovation * Strong leadership track record of executing key strategic goals * Enhanced results through rapid sharing of best practices aligned around "4+1" operating principles * Shared commitment to superior financial performance and delivering #1 in total shareholder return 20

Financial Profile - -------------------------------------------------------------------------------- 1H 2000 Chevron Texaco Combined* - ------------------------------------------------------------------------------ ($ Billions) Net Income - Operational 2.2 1.2 3.4 Cash Flow from Operations 3.9 2.0 6.2 Capex (incl. affiliates) 2.4 1.8 4.2 Total Assets 41.4 29.8 77.2 Debt/Debt + Equity (%) 28.7 35.8 35.5 Operational ROCE (%) 18.3 14.3 15.9 * Reflects consolidation of Caltex 21

Merger Synergy - -------------------------------------------------------------------------------- $ mm/yr Upstream Exploration $ 300 Production 350 R&D 50 ----- Total Upstream 700 Other Operations 200 Corporate 300 ----- Total Pretax Savings $1,200 Savings fully realized within 6-9 months of merger close 22

Execution Advantage - -------------------------------------------------------------------------------- Rapid integration resulting from: * Historical associations and strategic compatibility * Streamlined business portfolios with well-defined areas of overlap * Demonstrated competence in organizational restructuring and cost reduction * Firsthand experience in merger integration and business consolidations 23

ChevronTexaco Corporation - -------------------------------------------------------------------------------- * Historic partners with common values * Excellent strategic and geographic fit * Integrated operations across all energy markets * Enhanced competitiveness around the world * Improved financial strength and flexibility * Outstanding talent committed to superior returns and profitability 24

Additional Information - -------------------------------------------------------------------------------- Chevron and Texaco will file a proxy statement/prospectus and other relevant documents concerning the proposed merger transaction with the SEC. Investors are urged to read the proxy statement/prospectus when it becomes available and any other relevant documents filed with the SEC because they will contain important information. You will be able to obtain the documents free of charge at the website maintained by the SEC at www.sec.gov. In addition, you may obtain documents filed with the SEC by Chevron free of charge by requesting them in writing from Chevron Corporation, 575 Market Street, San Francisco, CA 94105, Attention: Corporate Secretary, or by telephone at (415) 894-7700. You may obtain documents filed with the SEC by Texaco free of charge by requesting them in writing from Texaco Inc., 2000 Westchester Avenue, White Plains, New York 10650, Attention: Secretary, or by telephone at (914) 253-4000. Chevron and Texaco, and their respective directors and executive officers, may be deemed to be participants in the solicitation of proxies from the stockholders of Chevron and Texaco in connection with the merger. Information about the directors and executive officers of Chevron and their ownership of Chevron stock is set forth in the proxy statement for Chevron's 2000 annual meeting of stockholders. Information about the directors and executive officers of Texaco and their ownership of Texaco stock is set forth in the proxy statement for Texaco's 2000 annual meeting of stockholders. Investors may obtain additional information regarding the interests of such participants by reading the proxy statement / prospectus when it becomes available. 25

ChevronTexaco Corporation - -------------------------------------------------------------------------------- 26 # # #

(Chevron Texaco Merger Transaction Overview) [Chevron logo] [Texaco logo] TRANSACTION OVERVIEW Merger Creates A U.S.-Based, Global Enterprise That Is Highly Competitive Across All Energy Sectors ================================================================================ Terms o More than $100 billion enterprise value o Texaco shareholders to receive .77 shares of Chevron common stock for each share of Texaco common stock they own, representing approximately $64.87 per Texaco share o Chevron shareholders to retain existing shares o Chevron shareholders to own approximately 61% of ChevronTexaco o Texaco shareholders to own approximately 39% of ChevronTexaco o Accretive to earnings and cash flow per share upon realization of cost savings ================================================================================ Combined o Headquarters: San Francisco, California Company Facts o Operations throughout the world o Year-end 1999 reserves of 11.2 billion BOE o 1H 2000 combined daily production of 2.7 million BOE o Assets of $77 billion o Third-largest oil and gas producer in the United States - Production of 1.1 million BOE per day - Nation's third largest reserve position - 4.2 billion BOE of proved reserves ================================================================================ Cost Savings o Significant annual cost savings of at least $1.2 billion to be achieved within 6-9 months of merger close - Approximately $700 million to come from more efficient exploration and production - Approximately $300 million to come from consolidation of corporate functions and $200 million from other operations - Combined workforce of about 57,000 to be reduced by approximately 7% worldwide o Chevron and Texaco have proven track records of achieving cost savings ================================================================================ Management, o Senior management: Integration - Dave O'Reilly - Chairman & CEO and Board - Richard Matzke - Vice Chairman, Upstream - Peter Bijur - Vice Chairman, Downstream, Power and Chemicals o Integration team to be led by: - John Watson - Chevron Vice President and CFO - Patrick Lynch - Texaco Senior Vice President and CFO o Board of Directors to be proportional to equity split ================================================================================ Closing o Shareholder approvals of Chevron and Texaco Conditions o Regulatory clearances o Pooling of accounting treatment o Chevron and Texaco anticipate that the FTC will require certain divestitures in the U.S. downstream business in order to address market concentration issues, and the companies intend to cooperate with the FTC in this process ================================================================================ # # #