Mobil acquires equity interest in Caspian Pipeline Consortium.

FAIRFAX, Va.--(BUSINESS WIRE)--May 16, 1997--Mobil Corp. (NYSE: MOB) announced that final agreements were signed in Moscow earlier today by Mobil Caspian Pipeline Company, a wholly owned subsidiary, and other shareholders to restructure the Caspian Pipeline Consortium (CPC) which will construct a 900-mile pipeline to transport crude oil from Kazakstan and Russia to the Black Sea.

Equity interests in the restructured CPC project include the governments of Russia (24%), Kazakstan (19%) and Oman (7%) as well as Chevron (15%), LUKARCO (12.5%), Mobil (7.5%), Rosneft/Shell (7.5%); Agip (2%), British Gas (2%), Amoco/Munaigaz (1.75%) and Oryx (1.75%). The acquisition of equity interests by the partners follows the execution of a Shareholders Agreement in Moscow on December 6, 1996, which provided that the purchase of shares by the producer companies was subject to certain conditions prior to share acquisition. With the receipt of the required documents and assurances and the satisfaction of certain financial, contractual and other conditions, the closing was completed.

Under the terms of the agreement, the producer companies will have the obligation to fund the project at twice their equity for the initial construction of the CPC pipeline project. Mobil's funding obligation will be 15 percent. Initial pipeline construction, which is expected to be completed and commissioned by mid-to-late 1999, will provide an export capacity of 28 million metric tons per year (580 thousand barrels per day) of Russian and Kazak oil exports. It involves the rehabilitation and upgrading of the existing pipeline from Tengiz to Komsomolsk, the construction and completion of a new pipeline from Komsomolsk to the Black Sea and a new terminal and single-point-mooring offshore loading facility at or near Novorossiysk.

Total estimated capital expenditures for initial construction, excluding pipeline assets valued at about $600 million contributed by the CPC Founding Members, is $2.1 billion (Mobil share: $310 million) over the next two to three years.

After completion of initial construction, the CPC pipeline is expected to undergo a phased expansion to accommodate a projected 67 million tons per year (1.4 million barrels per day) of Russian and Kazak oil exports. This expansion is forecast to cost approximately $2 billion and be completed around 2010.

Construction of the CPC pipeline will allow production from the Tengiz oil field, in which Mobil has a 25 percent equity interest, to reach well over 200 thousand barrels per day (TBD) by the turn of the century and eventually about 800 TBD (Mobil's share: 200 TBD). Current production is approximately 160 TBD.

In April 1996, Mobil signed a joint protocol between the CPC founding member governments and the producer companies to restructure the CPC. In May 1996, Mobil purchased a 25 percent stake in the Tengiz oil field with reserves estimated in excess of six billion barrels. Mobil is also a partner in two major exploration joint ventures in Kazakstan -- the Caspian Sea Consortium and the Tulpar Munai Joint Venture.

CONTACT: Mobil Corp.

David Dickson, 703/846-2378 or

Tom Cooney, 703/846-4476