Chevron Awards Drilling Contract to Build a New Deepwater Drillship

Ship will be named Discoverer Clear Leader $1.7 billion in contracts also will extend leases on two other deepwater drillships

SAN RAMON, Calif., March 1, 2006 -- Chevron Corporation (NYSE: CVX) today announced that it has awarded Transocean Inc. a deepwater drilling contract that will prompt the construction of a new state-of-the-art drillship by Transocean that will be dedicated exclusively to Chevron for five years. The two companies also have signed multiyear contract extensions for two of Transocean’s deepwater drillships currently in use by Chevron. The three agreements total approximately $1.7 billion.

The contract for the new drillship is expected to commence during the second quarter of 2009. After an estimated 30-month shipyard construction phase and following sea trials, it will be mobilized to the U.S. Gulf of Mexico for Chevron’s acceptance of the ship.

“The design of the new drill ship, to be named Discoverer Clear Leader, will include the most advanced drilling capabilities in the offshore drilling industry,” said George Kirkland, executive vice president, Chevron Upstream and Gas. “In the Gulf of Mexico, Chevron has drilled in the deepest water, and we have drilled the deepest well. The new drillship, coupled with our strong organizational capabilities, cutting edge technologies and partnerships, will help us maintain our leading position in deepwater exploration and production.”

Ray Wilcox, president, Chevron North America Exploration and Production, added, “We already have proved our ability to create the technology and processes needed to be successful in deep water. Now, with these contracts, we expect to secure the deepwater rigs we need to go forward with Chevron’s extensive Gulf of Mexico portfolio of exploration prospects and projects under development. These contracts also demonstrate the benefits of building a strong business relationship with core contractors who consistently demonstrate top safety and operational performance.”

Construction of the dynamically positioned, double-hull drillship is scheduled to take place at the Daewoo Shipbuilding and Marine Engineering Yard Co., Ltd., in Okpo, South Korea, with an estimated total capital expenditure of approximately $650 million. The drillship will feature a patented dual-activity drilling technology process that utilizes two drilling systems in a single derrick, allowing for parallel drilling operations designed to save time and money in deepwater well construction, compared with conventional rigs.

In addition to the dual-activity technology process, the top drive, or hoisting structure, will be larger, stronger and more efficient than existing top drives, so wells can be drilled deeper. There also will be an expanded high-pressure mud-pump system, expanded completions capabilities and other unique features of the drillship that target drilling wells up to 40,000 feet of total depth.

The drillship will have a variable deckload of more than 20,000 metric tons, and will be capable of drilling in water depths of up to 12,000 feet. It will be an enhanced version of Transocean’s three predecessor Enterprise-Class drillships, which have set deepwater drilling records in recent years, including the world water-depth drilling record of 10,011 feet.

To continue even more deepwater work, Chevron has exercised a final one-year option on Transocean’s deepwater drillship Discoverer Deep Seas, which is expected to commence in or near January 2008, and awarded a two-year contract extension for the rig with an expected commencement date of January 2009.

Chevron has also extended its contract for Transocean’s Cajun Express, a semisubmersible deepwater drilling rig. The two-and-a-half year contract extension has an expected commencement date near July 2007, following the rig’s current contract assignment with Chevron in the U.S. Gulf of Mexico.

Chevron Corporation is one of the world’s leading energy companies. With more than 53,000 employees, Chevron subsidiaries conduct business in approximately 180 countries around the world, producing and transporting crude oil and natural gas, and refining, marketing and distributing fuels and other energy products. Chevron is based in San Ramon, Calif. More information on Chevron is available at www.chevron.com.

CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION

This press release of Chevron Corporation contains forward-looking statements relating to Chevron’s operations that are based on management’s current expectations, estimates and projections about the petroleum, chemicals and other energy-related industries. Words such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “projects,” “believes,” “seeks,” “estimates” and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this release. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact Information

Corporate Media Relations

Chevron Corporation

Contact via E-mail