Texaco signs contracts for two exploration blocks in China's Tarim Basin; New blocks bring Texaco's total Tarim holdings to nearly 10 million acres.

WHITE PLAINS, N.Y.--(BUSINESS WIRE)--Feb. 5, 1996--Texaco announced today that it has signed petroleum contracts for the exploration of two onshore blocks in the Tarim Basin in northwestern China. The blocks, T6 and T7, adjoin an existing Texaco block in the southern portion of Tarim Basin.

The agreement was made between the China National Petroleum Corporation (CNPC), Texaco China B.V. and Agip (Overseas) Ltd. Texaco and Agip each own a 50-percent share in the two blocks, with Agip acting as operator. Texaco and Agip also are partners in a consortium that holds a petroleum contract on adjacent Block 1 to the east of T6 and T7.

Texaco Inc. Vice President Dr. William P. Doyle said, "Texaco's interest in the three contiguous Tarim blocks underscores the importance of the region in the company's focused worldwide exploration portfolio. Several recent discoveries in the Tarim Basin reinforce our belief in the hydrocarbon potential of this region.

"We expect to drill a well on Block 1 before the end of the year, and will shoot seismic on blocks T6 and T7 in 1997," he added.

Texaco and Agip were invited by CNPC to negotiate terms to explore, produce and develop oil and gas reserves in the 3.5- million-acre Block T6 (Minfeng Block) and the 3.8- million-acre Block T7 (Yutian Block) following the conclusion of China's Third Onshore Bid Round in November 1995. Texaco now owns interest in the Tarim Basin covering approximately 9.7 million acres (39,250 square kilometers), similar to the size of Switzerland.

The remote Tarim Basin is one of the largest underexplored onshore regions of China. The total area of the basin is some 138 million acres (560,000 square kilometers), more than half of which is covered by the Taklimakan Desert.

CONTACT: Cynthia B. Michener

TEXACO INC.

914-253-4743