Texaco Announces Oil Discovery in Bohai Bay, Offshore China.

Business/Energy Editors

HOUSTON--(BUSINESS WIRE)--July 13, 2000

Texaco (NYSE:TX) today announced a shallow water oil discovery offshore northeastern China in the Bohai Bay Contract Area 11/19, located approximately 90 miles south of Tanggu near the Port of Tianjin.

The discovery well, Bozhong 25-1-8, is in 57 feet of water and was drilled to a total depth of 7,134 feet. Initial results indicate the presence of high quality reservoir sands in the Tertiary Minghuazhen Formation, at a depth of 5,500 to 5,700 feet, with a total net pay of 115 feet. The well results were encouraging and will be incorporated into further geological and engineering studies to determine Bozhong's commercial potential.

"The Bozhong discovery, if deemed commercial, will enable us to expand our existing business interests in Bohai Bay," said Robert A. Solberg, president of Texaco Worldwide Upstream Commercial Development. "Bozhong is the result of, and would not have been possible without, the strong cooperative effort between Texaco and the China National Offshore Oil Corporation (CNOOC) group of companies. Texaco is pleased with this newest discovery, and we are hopeful that it will lead to an expansion of our joint developments of oil fields offshore China with CNOOC."

Texaco presently shares in the 110,000 barrels per day production from five offshore fields in the South China Sea operated by the CACT Operators Group which is comprised of CNOOC, Agip China BV, Chevron Overseas Petroleum Inc. and Texaco China BV. The CACT operation is the largest foreign invested offshore field production in China. Texaco also is participating in the joint development of the CNOOC-operated, Qinhuangdao 32-6 Field, which is located 50 miles north of the Bozhong discovery well in Bohai Bay.

Texaco holds a 100 percent contractor's interest in Block 11/19, subject to further provisions of the production sharing contract. The Block covers 787,384 acres.