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CHEVRONTEXACO CORPORATION 2004 ANNUAL REPORT 29

oil฀discovery฀was฀announced฀at฀the฀operated฀and฀50฀percent-

owned฀Jack฀prospect฀in฀Walker฀Ridge฀Block฀759.

Angola฀ In฀late฀2004,฀ﬁrst฀production฀was฀achieved฀at฀the฀

Block฀0฀Sanha฀Bomboco฀project,฀which฀will฀help฀reduce฀natural-

gas฀ﬂaring.฀

Australia฀ In฀mid-2004,฀the฀company฀announced฀a฀฀natural฀

gas฀discovery฀at฀the฀wholly฀owned฀Wheatstone-1฀well฀located฀off-

shore฀Western฀Australia.฀Production฀tests฀were฀completed฀in฀the฀

third฀quarter฀2004,฀and฀in฀early฀2005฀the฀company฀was฀evaluating฀

development฀options.

Cambodia฀ In฀January฀2005,฀the฀company฀announced฀crude฀

oil฀discoveries฀at฀four฀exploration฀wells฀in฀offshore฀Block฀A.฀

ChevronTexaco฀is฀the฀operator฀of฀the฀block฀and฀holds฀a฀฀

55฀percent฀interest.฀

China฀ In฀August฀2004,฀initial฀crude฀oil฀production฀occurred฀

at฀the฀16฀percent-owned฀BZ฀25-1฀Field,฀located฀in฀Bohai฀Bay.฀

Crude฀oil฀production฀also฀began฀late฀in฀2004฀at฀the฀HZ฀19-3฀

Field,฀in฀which฀the฀company฀has฀a฀33฀percent฀working฀interest.฀

Faroe฀Islands฀ In฀January฀2005,฀the฀company฀was฀awarded฀

ﬁve฀offshore฀exploration฀blocks฀in฀the฀Faroe฀Islands’฀second฀

offshore฀licensing฀round.฀The฀blocks฀are฀near฀the฀earlier฀Rose-

bank/Lochnagar฀discovery฀in฀the฀United฀Kingdom.฀The฀company฀

has฀a฀40฀percent฀interest฀and฀will฀be฀the฀operator.

Kazakhstan฀ The฀company’s฀ﬁrst฀crude฀oil฀from฀Karachaganak฀

Field฀was฀loaded฀at฀Russia’s฀Black฀Sea฀port฀of฀Novorossiysk฀in฀

mid-2004.฀This฀represented฀the฀ﬁrst฀shipment฀of฀Karachaganak฀

crude฀oil฀through฀the฀Caspian฀Pipeline฀Consortium฀export฀pipe-

line฀that฀provides฀access฀to฀world฀markets.

Construction฀continued฀during฀2004฀by฀the฀company’s฀50฀

percent-owned฀Tengizchevroil฀afﬁliate฀on฀Sour฀Gas฀Injection฀

(SGI)/Second฀Generation฀Project฀(SGP),฀which฀is฀expected฀to฀

increase฀total฀production฀from฀the฀current฀capacity฀of฀298,000฀

barrels฀of฀crude฀oil฀per฀day฀to฀between฀430,000฀and฀500,000฀bar-

rels฀per฀day฀by฀the฀end฀of฀2006,฀with฀the฀expansion฀dependent฀

upon฀the฀success฀of฀the฀SGI.฀

Libya฀ In฀early฀2005,฀the฀company฀was฀awarded฀onshore฀

Block฀177฀in฀Libya’s฀ﬁrst฀exploration฀license฀round฀under฀the฀

Exploration฀and฀Production฀Sharing฀Agreement฀IV฀terms.฀The฀

company฀was฀also฀made฀operator฀of฀the฀block฀with฀100฀percent฀

equity.฀The฀events฀mark฀the฀company’s฀return฀to฀Libya฀after฀a฀

28-year฀absence.฀

Nigeria฀ At฀the฀deepwater฀Agbami฀project,฀several฀milestones฀

were฀achieved฀in฀2004,฀including฀initial฀development฀drilling฀

in฀the฀third฀quarter฀and฀reaching฀a฀unitization฀agreement฀with฀

other฀owners฀in฀the฀area.฀In฀early฀2005,฀a฀contract฀for฀the฀

construction฀of฀a฀ﬂoating฀production,฀storage฀and฀offshore฀loading฀

platform฀was฀awarded.฀The฀project฀is฀being฀unitized,฀and฀the฀

company’s฀equity฀will฀be฀about฀68฀percent.

The฀company฀was฀awarded฀a฀100฀percent฀contractor฀interest฀in฀

the฀deepwater฀Nigeria฀Block฀OPL-247฀in฀the฀eastern฀part฀of฀the฀Niger฀

Delta฀in฀the฀second฀quarter฀2004.฀Block฀247฀is฀adjacent฀to฀Block฀222,฀

which฀includes฀the฀company’s฀Usan฀and฀Ukot฀discoveries.฀

In฀the฀third฀quarter฀2004,฀the฀company฀announced฀a฀crude฀

oil฀discovery฀at฀the฀Usan฀5฀well.฀Additionally,฀in฀early฀2005,฀

hydrocarbons฀were฀encountered฀at฀the฀Usan฀6฀appraisal฀well.฀

ChevronTexaco฀holds฀a฀30฀percent฀interest฀in฀the฀wells,฀both฀of฀

which฀are฀located฀in฀OPL-222.฀

Nigeria฀–฀São฀Tomé฀and฀Príncipe฀Joint฀Development฀Zone฀

(JDZ)฀ The฀company฀was฀awarded฀the฀right฀in฀early฀2004฀to฀

conduct฀exploration฀activities฀in฀deepwater฀Block฀1฀in฀the฀JDZ,฀

offshore฀São฀Tomé฀and฀Príncipe฀and฀Nigeria.฀In฀early฀2005,฀the฀

company฀signed฀a฀production-sharing฀contract฀with฀the฀Joint฀

Development฀Authority,฀under฀which฀ChevronTexaco฀will฀be฀the฀

operator฀with฀a฀51฀percent฀interest฀in฀the฀block.฀

Southern฀Africa฀ The฀company฀announced฀a฀discovery฀in฀the฀

deepwater฀area฀between฀Angola฀and฀the฀Republic฀of฀Congo฀at฀the฀

Lianzi-1฀exploration฀well฀in฀the฀third฀quarter฀2004.฀The฀discovery,฀

in฀the฀shared฀14K/A-IMI฀Unit,฀is฀located฀in฀the฀same฀area฀as฀the฀

previous฀Block฀14฀deepwater฀crude฀oil฀discoveries฀at฀Landana฀

and฀Tombua฀in฀Angola.฀ChevronTexaco฀is฀the฀operator฀of฀the฀

14K/A-IMI฀Unit฀and฀holds฀about฀a฀31฀percent฀interest.

Russia฀ In฀September฀2004,฀the฀company฀and฀OAO฀Gazprom฀

signed฀a฀six-month฀memorandum฀of฀understanding฀to฀jointly฀

undertake฀feasibility฀studies฀for฀the฀possible฀implementation฀of฀

projects฀in฀Russia฀and฀the฀United฀States.฀This฀represents฀a฀pos-

sible฀opportunity฀to฀participate฀in฀the฀development฀of฀the฀vast฀

natural฀gas฀and฀crude฀oil฀resource฀base฀in฀Russia฀and฀to฀develop฀

a฀close฀partnership฀with฀Russia’s฀largest฀natural฀gas฀producer.

Thailand฀ The฀company฀announced฀successful฀exploration฀

and฀appraisal฀drilling฀results฀in฀mid-2004฀at฀Block฀G4/43,฀located฀

in฀the฀Gulf฀of฀Thailand.฀Block฀G4/43฀is฀adjacent฀to฀the฀company’s฀

operated฀and฀52฀percent-owned฀Block฀B8/32.

Trinidad฀and฀Tobago฀ In฀early฀2005,฀the฀company฀announced฀

successful฀exploration฀drilling฀results฀at฀the฀offshore฀Manatee฀1฀

exploration฀well฀in฀Block฀6d.฀ChevronTexaco฀operates฀and฀holds฀

a฀50฀percent฀interest฀in฀this฀well.

United฀Kingdom฀ In฀the฀third฀quarter฀2004,฀production฀of฀

ﬁrst฀crude฀oil฀occurred฀at฀the฀21฀percent-owned฀Alba฀Extreme฀

South฀Phase฀2฀project.฀Alba฀Field฀is฀located฀in฀Block฀16/26,฀north-

east฀of฀Aberdeen.฀In฀the฀fourth฀quarter,฀a฀crude฀oil฀and฀natural฀

gas฀discovery฀was฀made฀at฀the฀offshore฀40฀percent-owned฀Rose-

bank/Lochnagar฀well฀(213/27-1Z)฀in฀the฀Faroe-Shetland฀Channel.

Venezuela฀ In฀August฀2004,฀the฀company฀was฀awarded฀

an฀exploration฀license฀and฀100฀percent฀interest฀for฀Block฀3฀in฀

Plataforma฀Deltana,฀an฀offshore฀area฀on฀Venezuela’s฀Atlantic฀

continental฀shelf.฀The฀exploration฀rights฀added฀to฀the฀company’s฀

existing฀Block฀2฀license฀in฀Venezuela฀and฀Block฀6d฀in฀Trinidad฀

and฀Tobago,฀across฀the฀border฀with฀Venezuela.฀Two฀exploration฀

wells฀were฀successful฀during฀2004฀in฀the฀operated฀and฀60฀percent-

owned฀Plataforma฀Deltana฀Block฀2.฀

The฀company฀completed฀onshore฀construction฀of฀the฀30฀

percent-owned฀Hamaca฀Project’s฀crude฀oil฀upgrading฀facility.฀

This฀facility฀has฀the฀capacity฀to฀process฀190,000฀barrels฀per฀day฀

of฀heavy฀crude฀oil฀and฀upgrade฀into฀180,000฀barrels฀per฀day฀of฀

lighter฀higher-value฀crude฀oil.฀Upgrading฀began฀in฀October฀2004.฀

Global฀Natural฀Gas฀Projects฀ In฀Qatar,฀Sasol฀Chevron,฀Chevron-

Texaco’s฀50-50฀global฀joint฀venture฀with฀Sasol฀of฀South฀Africa,฀

entered฀into฀a฀memorandum฀of฀understanding฀with฀Qatar฀Petro-

leum฀to฀expand฀the฀Oryx฀gas-to-liquids฀project฀and฀a฀letter฀of฀intent฀

to฀examine฀GTL฀base฀oils฀opportunities฀in฀Qatar.฀Qatar฀Petroleum฀

and฀Sasol฀Chevron฀also฀agreed฀to฀pursue฀an฀opportunity฀to฀develop฀

a฀130,000-barrel-per-day฀integrated฀gas-to-liquids฀project.

In฀Australia,฀the฀North฀West฀Shelf฀Venture฀began฀commis-

sioning฀of฀a฀fourth฀LNG฀train฀in฀September฀2004.฀This฀increased฀

the฀venture’s฀LNG฀production฀capacity฀by฀approximately฀50฀per-

cent฀during฀2004.฀ChevronTexaco฀holds฀a฀one-sixth฀interest฀in฀

the฀joint฀venture.

The฀company฀announced฀in฀the฀fourth฀quarter฀2004฀an฀

agreement฀with฀other฀shareholders฀of฀the฀West฀African฀Gas฀Pipe-

line฀Co.฀Ltd.฀to฀move฀forward฀with฀the฀construction฀of฀a฀pipeline฀

to฀be฀used฀for฀the฀transportation฀of฀natural฀gas฀more฀than฀400฀

miles฀from฀Nigeria฀to฀customers฀in฀Ghana,฀Benin฀and฀Togo.

In฀early฀2005,฀the฀company฀announced฀plans฀to฀conduct฀a฀

feasibility฀study฀on฀a฀potential฀liqueﬁed฀natural฀gas฀(LNG)฀project฀

at฀Olokola฀in฀southwest฀Nigeria.฀Future฀decisions฀to฀move฀forward฀

with฀Olokola฀LNG฀will฀depend฀on฀the฀results฀of฀the฀feasibility฀study.