$3.8 Billion Hamaca Heavy Crude Upgrader Points Way for ChevronTexaco's Next $6 Billion Orinoco Belt Project.

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Venezuela's Orinoco Belt holds the largest known hydrocarbon deposit in the world and has become a target for companies hoping to apply state-of- the-art producing and refining technologies to the heavy crude oil resource. The Hamaca upgrading facility project at the country's Jose Industrial Complex, recently completed by ChevronTexaco (NYSE:CVX) (San Ramon, California), is projected to produce over two billion barrels of oil over its lifetime.

The upgrader project is the core infrastructure element of the $3.8 billion Hamaca project and is a component in CVX's global upstream growth program. It will see the ramp-up of production in the fourth quarter of 2004, from the current 120,000 barrels per day (bpd). In the past three years, production levels have been increased by blending extra heavy crude with light crude supplied by the state's PDVSA. The upgraded plant has the capacity to process 190,000 bpd of extra heavy crude from the Orinoco Belt and reconstitute it into 180,000 bpd of high quality synthetic crude. The Hamaca project which uses the latest production and refining process methods, has similar financial characteristics to many light oil operations. Production from the plant will be delivered to customers in the international market.

With the completion of this upgrader project, ChevronTexaco is demonstrating its attraction to the Orinoco Belt resource, with a plan to build a $6 billion upgrade project in the Faja region. The project will include upstream development, a pipeline, and an upgrader complex capable of producing 200,000 to 400,000 bpd of high quality synthetic crude and products.

On the Hamaca project, in which CVX has a 30% interest and ConocoPhillips (NYSE:COP) (Houston, Texas), 40%, and PDVSA, 30%, 11,000 people were employed at the peak construction period. The companies developing the site appear to have handled Venezuela's 2001 hydrocarbon, which have been criticized as being unfavorable to investment projects with energy to spare for the new proposed development.

George Kirkland, President of ChevronTexaco Overseas Petroleum, said after the Hamaca project completion, "This accomplishment supports our key upstream strategy of maximizing and growing the value of our base business, and it comes at a time when global demand for energy is increasing. The Hamaca project, and Venezuela in general, are well positioned to be reliable, long-term contributors in meeting that demand."

CVX, with 50,000 employees working in 180 countries, is celebrating its 125th anniversary in 2004. It claims to be the fifth largest energy company in the world.