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    ChevronTexaco Cuts Costs, Maximizes Efficiencies

    Exploration and production successes position company well for future, says CEO O'Reilly.

    MIDLAND, Texas -- Addressing the annual stockholders' meeting, ChevronTexaco Chairman and CEO David J. O'Reilly reported that ChevronTexaco is "up to the challenge of delivering the performance stockholders expect of us and we expect of ourselves." Strong operating performance in the first quarter of 2003 led to a 19 percent annualized return on capital employed.

    O'Reilly commented on a number of other accomplishments the company achieved over the past year, including:
    * Successfully completing its merger and operating as one company with common systems, policies and practices. In addition, the company has achieved an annual synergy savings rate of $2.2 billion -- compared to $1.2 billion originally estimated.
    * Continuing its record of success in more than replacing its worldwide oil and natural gas equivalent production.
    * Having its best exploration program in recent years, including recently announced major discoveries in the Gulf of Mexico and offshore Australia.

    Reviewing the company's downstream performance in 2002, Executive Vice President Patricia Woertz said that ChevronTexaco has built a platform for greater profitability. Among successes in 2002, she said the downstream moved quickly to capture efficiencies from the merger and was continuing to lower costs.

    O'Reilly said the company is moving forward with an important initiative to create a global natural gas business. He cited ChevronTexaco's strong natural gas positions in Australia, West Africa and the United States, as well as the company's technologies and infrastructure for producing and delivering gas.

    O'Reilly reiterated the company's strong commitment to enhancing stockholder value and said the company has aggressive goals for improving return on capital employed.

    Vice Chairman Peter Robertson described major projects under way in the upstream business. He said new production would begin this year from the Athabasca oil sands in Canada, and in Chad-Cameroon, and production is increasing at the Karachaganak development in Kazakhstan. "From now through 2007, we'll be steadily bringing on major new oil and gas developments that will enable us to maintain a strong production profile well into the future," said Robertson.

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