04 Jul 2001

TEXACO COMPLETES PHASE TWO APPRAISAL DRILLING AT ITS NORTH BUZACHI FIELD IN KAZAKHSTAN

FOR RELEASE: WEDNESDAY, JULY 4, 2001

LONDON, July 4 - Texaco today announced that it has completed appraisal drilling as part of the second phase of its North Buzachi onshore field appraisal program in the Mangistau province of Kazakhstan.

Commenting on the announcement, Mark L. Johnson, Vice President of Texaco North Buzachi Inc. said, "The main objective of phase two was appraisal drilling to confirm the amount of oil in place and the areal extent of the field. The program has been completed on schedule."

"Phase two involved evaluating the use of steam stimulation and water injection at the field with knowledge gained from this assessment work being used to increase our understanding of how to best develop the field," said Johnson.

The appraisal program at the Texaco-operated North Buzachi field involved both two- and three-dimensional seismic data acquisition and 30 new wells drilled to add to the four drilled under the phase one appraisal program.

Texaco will evaluate phase two results this year, with a decision on full field development likely to be taken during first half of 2002. Full development could include as many as 600 wells drilled over a 10-year period.

Current production at the field is 4,000 barrels of oil per day (bopd) and is expected to rise to 7,000 bopd by the end of the year.

The phase two appraisal program created 1,100 local jobs, further demonstrating Texaco's commitment to the Kazakhstan oil and gas industry. Contractors were required to employ Kazakh workers wherever possible as part of the North Buzachi field's commitment to contributing to the local community.

A local company, Azimuth, formerly Geotex, conducted the full-scale acquisition of seismic data over a 92 square kilometre area and employed a local workforce of more than 300 people.

Canadian based Precision Drilling International (PDI) was awarded the contract to conduct drilling operations. As part of Texaco's conditions in awarding the drilling contract, 80 percent of PDI’s workforce were local Kazakhs.

PDI's Super Single rig, PD 709, commissioned to complete the work was particularly suited for drilling applications in environmentally sensitive and remote locations. It has been designed to a high safety standard and has operated for four years without a lost time incident.

North Buzachi crude is being exported to Germany via the Russian pipeline system to the north, across the Caspian to Baku and onward to the Black Sea port of Batumi, and to local Kazakh refinery.

Texaco is operator with a 65 percent interest in the North Buzachi field with Nimir Petroleum Limited holding the remaining 35 percent interest.