Conoco and Elf Aquitaine Begin Major Natural Gas Development in Syria.

Business/Energy Editors

HOUSTON--(BUSINESS WIRE)--March 8, 2000

Conoco (NYSE:COCA) (NYSE:COCB) and its partner, Elf Aquitaine of France, have awarded a $160 million contract to Kvaerner ENC, a division of Kvaerner U.S. Inc., to engineer, procure and construct infrastructure for a major natural gas development in Syria's eastern desert.

Conoco, as lead operator, is a 50-50 partner with Elf Aquitaine in the Deir Ez Zor gas project. Under the terms of a service contract with the Syrian Petroleum Company, the project will gather, process and transport a large associated gas stream that has been flared in oil fields around the city of Deir Ez Zor.

The overall cost of the DEZ Gas Project is expected to be around $430 million, which represents the largest U.S. investment in Syria in several years. Conoco is the only U.S. oil company currently operating in Syria, and was selected to participate because of the company's exceptional project management skills.

"We saw an opportunity for harnessing the associated gas that was being flared, and responded with a creative technical and commercial approach that will turn this resource into a clean and valuable product for the people of Syria," said Rob McKee, Conoco executive vice president for worldwide exploration and production.

"Demand for natural gas in Syria far exceeds the country's current supply capability. Combine that with Conoco's project management strengths and our strategic interests in expanding our international gas business and increasing our presence in the Middle East, and you have a project that's an excellent fit for both Syria and Conoco," he said.

The contract awarded to Houston-based Kvaerner ENC involves building a plant with two natural gas processing trains that have a combined processing capacity of about 450 million cubic feet of gas per day. Six compressor stations, a 100-mile gathering system and a 150-mile transport pipeline connecting to the national grid also will be built. Initial construction is expected to begin later this month.

"Conoco opened an office in Damascus in 1999," said David Lundeen, head of Conoco Syria DEZ Gas Ltd. "We're now establishing our construction camp and gearing up to begin laying the transport pipeline. The pipeline will carry 150 million cubic feet of processed gas per day to an existing delivery system that connects to the major population centers in western Syria, including the capital city of Damascus. The remaining processed gas will be reinjected for future use."

Conoco, celebrating its 125th anniversary, is a major, integrated energy company based in Houston and active in more than 40 countries.

Totalfina (NYSE:TOT) holds approximately 95 percent of the share capital of Elf Aquitaine. The European Commission approved the merger between the two companies on Feb. 9, 2000.

This news release contains certain forward-looking statements about Conoco's operations and business plans. These statements are not guarantees of future performance, involve certain risks, uncertainties and assumptions that are difficult to predict, and are based upon assumptions as to future events that may not prove accurate. Actual outcomes and results may differ materially from what is expressed herein. Among the factors that could cause such differences are changes in crude oil and natural gas prices; changes in anticipated construction costs; unanticipated technical difficulties or delays in completion of project facilities; and the potential disruption or interruption of the Company's facilities or operations due to accidents or political events. Such matters are detailed in Conoco's publicly available filings with the Securities and Exchange Commission.