IRVING, Texas (November 22, 1996) - Exxon Corporation today announced that a Consortium headed by its affiliate, Esso Exploration and Production Chad Inc. (Esso), has signed a Memorandum of Understanding (MOU) with the Government of Chad on development terms that represent an important step leading to the first commercial oil production in that country. The MOU addresses key financial, legal and operating terms under which the Doba Basin project in southern Chad would be developed.

The project area, located about 350 miles south of Chad's capital, N'Djaména, is estimated to contain approximately 900 million barrels of recoverable reserves. The total cost of developing the reserves and the infrastructure needed to transport them is expected to be in the range of about $3 billion. Esso is operator for the Consortium and holds a 40% interest, while Société Shell Tchadienne de Recherches et d'Exploitation and Elf Hydrocarbures Tchad hold 40% and 20% interests, respectively.

According to Dean L. Guttormson, President of Esso Exploration and Production Chad Inc., "This MOU represents significant progress toward the development of these resources, which are mutually important to Chad and the Consortium members. Remaining milestones include final government ratification of terms and the securing of project financing." In the interim, the Consortium will invite proposals from potential bidders for the major engineering, procurement and construction contracts.

The Doba Basin Project would draw on reserves from three oil fields in southern Chad. Approximately 300 wells would be drilled, with peak production projected to be about 200-250 thousand barrels of oil per day, beginning as early as the year 2000. This production would be gathered into a central treating facility located in the field area. The oil would then be transported approximately 650 miles via a 30-inch pipeline across Chad and the neighboring Republic of Cameroon to the Atlantic coast. The Presidents of Chad and Cameroon recently signed a Bilateral Treaty which established the basis for construction and operation of this pipeline. Commercial tankers would then be loaded from an offshore marine terminal near the town of Kribi, Cameroon, to carry the oil to world markets.

The MOU also outlines a second potential project in Chad. This project would call for development of the Sedigi field north of Lake Chad and a pipeline to supply a refinery to be built in the capital city of N'Djaména and to be operated by Société d'Etude et d'Exploitation de la Raffinerie du Tchad (SEERAT). The refinery would produce fuel for transportation, electric power generation and other uses.