Mobil, Pequiven Begin Venezuela Petrochemicals Engineering.

FAIRFAX, Va.--(BUSINESS WIRE)--May 7, 1998--Mobil Chemical Company and Petroquimica De Venezuela, S.A. (Pequiven), the petrochemical affiliate of Venezuela's state-owned oil company, Petroleos de Venezuela, S.A. (PDVSA), announced today that an association between the two companies has selected Fluor Daniel, Inc. to immediately begin Phase I Engineering for their Jose Petrochemicals Project in the state of Anzoategui, Venezuela, 140 miles east of Caracas.

Capital costs are estimated at about $2 billion.

The project will include an ethane-based ethylene cracker with a capacity of about 1,000,000 metric tons-per-year and related downstream facilities to convert the ethylene into as much as 750,000 metric tons of polyethylenes and 420,000 metric tons of ethylene glycols.

Feedstocks for the Jose cracker will be supplied from associated gas out of oil fields in eastern Venezuela. Construction of the complex is expected to begin in 1999 with start-up scheduled for early 2002.

DSM's "Clean Tubular Reactor" technology, licensed by Stamicarbon, has been selected for the high-pressure, low-density polyethylene (LDPE) plant. The 300,000-metric-ton-a-year facility will be the largest single-line, high-pressure LDPE plant in the world.

Technology for a combination gas-phase linear low-density (LLDPE) and high-density (HDPE) polyethylene resin plant will be provided by Univation Technologies. This unit will combine the UNIPOL PE process with Super Condensing Mode Technology to produce up to 450,000 metric tons annually, making it the largest single-line gas-phase unit in the Americas.

The venture also has selected Union Carbide's Meteor Process technology for the design of the 420,000-metric-tons-per-year polyester grade glycol unit.

Basic engineering will take about a year to complete and follows a comprehensive feasibility study that confirmed the economic attractiveness and better defined the scope of the project. As a result of the feasibility study, the partners decided to increase the design capacity from the original 830,000 metric-tons-per-year level. About 600 new permanent jobs will be created at the Jose site.

"The Jose plant will be one of the lowest cost producers of petrochemicals in the world," said Mobil Chemical Company President Raymond J. McGowan. "This project is consistent with Mobil's strategy to build petrochemical plants that are competitively advantaged. The Jose complex can deliver product to most major markets of the world at very competitive costs."

Pequiven selected Mobil as its partner in the Jose project in October of 1996. A Preliminary Development Agreement was signed in January of 1997 and committed the companies to jointly perform the detailed feasibility study.

"The development of the Jose Project with Mobil is a major item in this company's business plan, which aims to triple overall petrochemical production volume to 21 million tons by 2006 in the basic business areas of fertilizers, methanol, olefins and by-products," said Pequiven President Arnold Volkenborn. "The joint venture project with Mobil is especially important because it provides us with the opportunity to position ourselves as a major olefins supplier to this continent. It fits perfectly into Pequiven's production plans for the international market, and doing so competitively, by taking advantage of low-cost gas availability."

The Jose Petrochemicals Project is one of several major investments Mobil has made recently in Venezuela. In 1995, Mobil re-entered the Venezuela lubes market by acquiring a 50-percent share in the Compania Nacional De Grasas y Lubricantes plant.

Mobil also re-entered the Venezuela fuels market in March when it opened its first service station in Venezuela. The company plans to have more than 200 service stations designed to meet the specific needs of the Venezuela consumers.

In early 1996, Mobil joined Veba Oel and Nippon Oil  Company to acquire exploration rights in Lake Maracaibo's La Ceiba Block. In addition, Mobil, PDVSA and Veba have a $2.5-billion, joint-venture project to produce 120,000 barrels of extra heavy crude oil per day from the Cerro Negro Field in the Orinoco Belt for final processing in refineries in Chalmette, Louisiana and Germany.

Mobil also is a 25-percent partner in the eastern Venezuela Quiamare - La Ceiba marginal producing field in which a very promising discovery was recently announced. Mobil acquired its interest in the field through the purchase of Ampolex.

CONTACT: Mobil Corp.

Gail Campbell Woolley, 703/846-1004

Mike Kimmitt, 703/846-2387