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Letter to Employees TO ALL EMPLOYEES: The Chevron Texaco Corporation combines companies with long and proud histories and worldwide reputations for honesty and integrity - two key values of The Chevron Texaco Way. These well-deserved reputations not only underlie our past accomplishments but also will be critical to our future success. The Chevron Texaco Manual of Compliance Procedures and Guidelines (the Manual) describes our policies both on the way we conduct ourselves and on the way we do business around the world. We ask each of you whose jobs require more detailed guidance than is contained in the companion ChevronTexaco Business Conduct and Ethics Code to read the Manual and become familiar with how the various policies relate to your job.

In brief, Chevron Texaco's policy is always to comply fully with both the spirit and the letter of the law. But beyond that, we should conduct our business with the highest standards of honesty and integrity -- wherever we operate. Wherever the law is unclear or seems conflicting or we are in one of those gray areas, we should conduct our business in such a way that we would be proud to have all the facts disclosed. No matter what our jobs may be, each of us may face ethical questions -- in our dealings with supervisors, peers and subordinates; with customers and suppliers; with unions and governments; and with the communities in which we live and work. These situations continually test our judgment and integrity in the face of changing cultural values and increasing competitive pressures. Often the test is not just what is illegal, but what is proper.

Shortcuts, half truths, compromises and the expedient never should be allowed to replace what is ethical and legal. These convenient or perhaps seemingly harmless acts can hurt our business and harm our reputation, which is one of the cornerstones of our success. That is why Chevron Texaco will not tolerate any unethical behavior by employees. In the final analysis, Chevron Texaco's success will continue to depend on its ethical business conduct. We count on each of you to continue to conduct yourselves following the highest standards of The Chevron Texaco Way. Dave O'ReillyChairman of the Board and Chief Executive Officer Introduction INTRODUCTION October 2001 This manual brings together the procedures and guidelines concerning compliance with particularly complex U.S. laws and regulations (federal, state and local) that call for special attention.

There are, of course, many others that have an impact on Chevron Texaco. For all these laws, the long-standing policy of unequivocal compliance applies. The potentially severe civil and criminal penalties resulting for both the employee and Chevron Texaco for violating these laws underscore the importance of knowing and following the procedures and guidelines in this manual. The management of every Corporation department and operating company is responsible for implementing and enforcing the applicable procedures and guidelines.

It is vital that each employee whose work is affected by these procedures and guidelines have access to the relevant sections of this manual. Employees should be aware that violation of the law and of the procedures and guidelines in this manual may lead not only to legal penalties but also to disciplinary action by the company, up to and including termination of employment. Each employee is responsible to make sure that he or she acts in compliance with the letter and spirit of applicable laws, a swell as the procedures and guidelines in this manual. All Chevron Texaco managers and supervisors have the additional responsibility of making sure that everyone who works for them understands and fulfills all their compliance obligations. The Chevron Texaco Corporation Law Department has responsibility for updating and distributing this manual. Employees with questions or changes may call the Law Department Compliance Manual Administrator at (925) or CTN 973-4582 or send an e-mail E: THIS ' INTRODUCTION ' AND THE FOLLOWING 'GENERAL INSTRUCTIONS " FORM AN INTEGRAL PART OF EACH OF THE FOLLOWING SECTIONS.

TO THE EXTENT THAT SECTIONS ARE TO BE SEPARATELY DISTRIBUTED TO EMPLOYEES, IT IS IMPORTANT THAT COPIES OF THIS ' INTRODUCTION ' ANDTHE 'GENERAL INSTRUCTIONS' BE ATTACHED TO EACH SEPARATE SECTION. General Instructions GENERAL INSTRUCTIONS Revised October 2001 I. COMPLIANCE STANDARDS AND PROCEDURESChevronTexaco's standards and procedures for compliance by its employees or agents with applicable laws and regulations are stated in these instructions and in the following specific sections of this Manual as they may be revised and as they have been or may be supplemented in other documents from time to time. These standards and procedures are referred to collectively as 'guidelines. ' In any case in which an agent, as distinguished from an employee, is used to conduct ChevronTexaco business that must conform to legal standards, those in ChevronTexaco engaging the services of the agent are responsible for assuring that he or she is properly instructed concerning Chevron Texaco's applicable guidelines. II.

RESPONSIBILITY FOR COMPLIANCE SUPERVISION Each of the following sections of this Manual assigns responsibility for compliance supervision to one or more individuals or staff organizations. The manager of each Corporation department and the President of each operating company will oversee such compliance to assure that all affected employees of that department or operating company have been informed and have acknowledged that they will comply with the guidelines applicable to their particular employment. In addition, all officers, managers, supervisors and employees are individually responsible not only for their own compliance with the guidelines but for assuring that those working under their supervision are in compliance with them.. DELEGATION OF DISCRETIONARY AUTHORITY ChevronTexaco will not knowingly employ anyone whose prior conduct has demonstrated a propensity to engage in criminal activities. Appropriate inquiries of applicants for employment will be made on this subject by the Human Resources Department of the Corporation or of the operating company, as the case may be. Any Chevron Texaco employee whose conduct demonstrates a propensity to engage in illegal activities should expect to be discharged.

If in extraordinary circumstances the employment were continued, the employee would not be given discretionary authority that might be used in any area ofChevronTexaco's operations to violate the law. General Instructions IV. COMMUNICATION OF THE COMPLIANCE PROGRAM All affected employees will be given a copy of this Manual, or of those particular parts of it applicable to their employment, and must state in writing that they have read and will comply with the guidelines. This is to be documented by each employee's execution of a Form GO 260-ACK acknowledgment or on-line equivalent.

The original of this document will be placed in the employee's personnel file and the employee will be given a duplicate copy. The same procedure will be followed with new employees and with those transferred to a new position affected by the guidelines. This written instruction will be regularly supplemented as appropriate by training programs in which the meaning and practical application of the guidelines will be discussed and questions answered. Whenever changes in the law require additional instruction, it will be promptly given. As it is not practical in written guidelines to cover all possible issues, or to anticipate all possible questions, employees are urged to consult with those responsible for compliance as provided in this Manual. V. TRAINING AND MONITORINGChevronTexaco's program is designed to achieve compliance with, and seek to detect violations of, the guidelines through: A. Periodic training programs on the meaning and application of the guidelines (see IV, above); B. Periodic audits of pertinent files and records; andC.

Requiring every employee to report any conduct that he or she believes may be in violation of the law or the guidelines. VI. REPORTING SUSPECTED VIOLATIONS If any employee believes that another employee or any agent, consultant or contract worker or a Chevron Texaco business unit is violating the law or these guidelines or is engaging in activities on Chevron Texaco's behalf that could damage Chevron Texaco's reputation, this information must be brought to the attention of the employee's management, or, in the alternative, to the attention of one or more of the following: A. The head of the employee's organization, department or business unit. B. Legal counsel responsible for the employee's organization, department or business unit. C. Any person designated in these guidelines as a person responsible for compliance in the specified area involved. D. Chevron Texaco Corporation Auditing Department. E. Corporate Security. General Instructions Employees who report possible misconduct to any of the above will not be subject to retribution or suffer any adverse Chevron Texaco action as a consequence of making such a report. The person to whom the information is reported shall ensure that the report is promptly investigated to determine if any possible misconduct has occurred.

A toll-free 24-hour Chevron Texaco Hotline has been set up for employees to report possible violations of law or Chevron Texaco policy in the event that an employee is reluctant to contact any of the above. The number is 1-800-284-3015. Employees in Bermuda, Canada or the United States can normally access the Hotline directly. Employees in other countries may need to call the local AT&T access number for their country or city to reach the Hotline.

AT&T local access numbers can be found on the Internet at web who are not fluent in English may use the Hotline's translation service. (Employees may also call 1-704-556-7046 collect and ask the telephone operator to charge the call to Chevron Texaco). Calls received by the Hotline will be referred to the appropriate organization for investigation and follow-up. All calls are strictly confidential. No employee who reports possible misconduct will suffer retribution or any adverse Chevron Texaco action because of his or her report. VII.

ENFORCEMENT OF THE GUIDELINES Failure to comply with the law or the applicable guidelines will result in disciplinary action including, in appropriate circumstances, termination of employment. Disciplinary action, as appropriate, may also be taken against any employee who fails to report misconduct, or who negligently fails to detect misconduct by someone working under his or her supervision, or who fails to take appropriate steps to deal with misconduct once discovered. V. RESPONDING TO VIOLATIONS When a violation of the law or the guidelines has been detected, Chevron Texaco will take appropriate action to stop the violation and to prevent further violations. This action will include making modifications to its compliance program when deemed desirable to enhance its goals of preventing and detecting violations. IX. UPDATING THE MANUAL This Manual is available on Chevron Texaco's Intranet.

The Corporation Law Department is responsible for incorporating and distributing all changes and additions to the Manual. Changes effected by new or substitute pages should be brought promptly to the personal attention of all employees whose work or responsibilities may thus be affected. Employees who do not have access to the Intranet may contact the Compliance Manual Administrator to obtain a paper copy. As used herein, 'Corporation' means Chevron Texaco Corporation, its departments and their staffs;' Chevron Texaco' means Chevron Texaco Corporation and / or any and all of its operating companies.

Section 1. Internal Controls SECTION 1. INTERNAL CONTROLS. INTRODUCTION ChevronTexaco has maintained, since its inception, an internal accounting control system designed to ensure that its books and records are maintained correctly. However, with the passage of the Foreign Corrupt Practices Act (FCPA) in December 1977 (amended in August 1988 and November 1998), the evaluation and documentation of internal accounting control systems took on increased importance.

The FCPA amends the Securities Exchange Act of 1934 and has two parts. One part, which is entitled "Foreign Corrupt Practices", makes it unlawful to make "corrupt " payments or gifts to foreign government officials. Guidelines and procedures for compliance with this part of the FCPA and penalties for violations thereof are contained in Section 3 of this Manual. The other part of the FCPA is entitled "Accounting Standards" and prescribes rules governing the books and records and the systems of internal accounting controls, and penalties for violations thereof, for all corporations registered with the U.S. Securities and Exchange Commission (SEC).

A general explanation of the accounting standards provisions of the FCPA as they affect the corporation and its subsidiaries and joint ventures is set forth in these guidelines. II. ACCOUNTING STANDARDS PROVISIONS OF THE FCPAThe FCPA mandates that publicly held companies (a) keep books and records which in reasonable detail "accurately and fairly reflect the transactions and dispositions of the assets" of such companies and (b) devise and maintain systems of internal accounting controls which are "sufficient to provide reasonable assurances that: A. transactions are executed in accordance with management's general or specific authorization; B. transactions are recorded as necessary (1) to permit preparation of financial statements in conformity with generally accepted accounting principles or another criteria applicable to such statements, and (2) to maintain accountability for assets; C. access to assets is permitted only in accordance with management's general or specific authorizations; and Section 1. Internal Controls. the recorded accountability for assets is compared with the existing assets a treasonable intervals and appropriate action is taken with respect to any differences".

The stated purpose of the accounting standards provisions was to prevent the use of "off the-book" bank accounts and slush funds in making questionable payments to United States and foreign government officials. It is apparent, however, that these provisions have an impact on both domestic and foreign operations far beyond preventing "corrupt payments". Indeed, the SEC has interpreted the accounting standards provisions so as to enlarge management's legal responsibility for all aspects of corporate operations. Civil penalties for violating the accounting standards provisions of the FCPA include substantial monetary penalties and mandatory injunctions applicable to corporations and individuals as well as public disclosure of such violations. Criminal penalties for knowingly circumventing or knowingly failing to implement a system of internal accounting controls or knowingly falsifying any book, record, or account include a significant fine and / or imprisonment for individuals and a fine for corporations. Mandatory injunctions obtained against U.S. corporations and individuals have, for example, required the: A. appointment of an independent task force to study the company's internal control system, B. appointment of new directors, andC. appointment of a receiver to run the company.

The accounting standards provisions of the FCPA apply equally to ChevronTexaco Corporation and its 100 percent-owned subsidiaries. With regard to subsidiaries or affiliates where Chevron Texaco has a controlling interest (i. e., Chevron Texaco owns more than 50 percent) or is the operator the company, the company has responsibility to ensure compliance with the accounting standards Also, we must use our influence in an effort to cause our 50 percent or less owned affiliates and those joint ventures in which we are associated-but not as operator-to devise and maintain adequate accounting control systems.. CHEVRONTEXACO'S INTERNAL ACCOUNTING CONTROLS To ensure that all transactions are "accurately and fairly reflected" in Chevron Texaco's books and records, the Comptroller maintains company-wide accounting and internal accounting control systems. In very general terms, the accounting system provides: Section 1.

Internal Controls. Common definitions and standardized accounting procedures throughout ChevronTexaco. B. Uniform reporting of similar transactions throughout Chevron Texaco. C. A basis for the preparation of financial statements in accordance with generally accepted accounting principles and other applicable methods of reporting financial and operating information. D. Accurate and timely data for management use. The basic ground rules for Chevron Texaco's accounting system are contained init's Guide to Corporate Accounting. All employees, both inside and outside the financial organizations, involved in recording Chevron Texaco's transactions are expected to adhere to these procedures.

Any questions on the correct recording of transaction not answered in the Guide to Corporate Accounting should be referred to the Corporation's Comptroller. It is essential to note that attainment of a high degree of integrity inChevronTexaco's accounting system necessitates that all entries inChevronTexaco's books be prepared with care and honesty and be supported by adequate documentation to provide complete, audit able records. Recording false or misleading entries or assisting others in making such entries is prohibited both by company policy and by law. No asset, liability, revenue or expense ofChevronTexaco shall, under any circumstances, be willfully concealed or incompletely or inaccurately recorded. The goal of our internal accounting control system is to ensure that the are achieved. The primary objectives of Chevron Texaco's internal accounting control system are to provide management with reasonable assurance that: 1.

Transactions are executed in conformity with general or specific management authorization. 2. Access to assets are safeguarded. 3.

All transactions are recorded at the correct amounts, in the proper time period, and in the appropriate accounts. Section 1. Internal Control sIV. INTERNAL CONTROL FRAMEWORK The successful operation of an internal accounting control system is based in large measure on the existence of a comprehensive control environment. Specific accounting controls cannot operate in a vacuum and the "control consciousness" established by management will dictate to a great extent the overall organization's adherence to controls. Chevron Texaco's internal control environment, which provides a positive setting for the accounting control system, includes: A. An appropriate organization structure Management has established clear delegation of authority and communication of responsibility within Chevron Texaco.

Chevron Texaco has also recognized the need for a strong Board Audit Committee and a competent and independent internal audit staff as a foundation for a company-wide system of controls. B. A systematic communication of corporate policies Information pertaining to corporate policies and procedures has been communicated to employees through the Corporate Policy Manual, the Manual of Compliance Procedures and Guidelines, the "Chevron Texaco Business Conduct and Ethics Code", and general letters issued by management. C. Appropriate personnel policies ChevronTexaco has promoted the development of its employees through training programs and systems designed to identify and reward performance. D. Establishment of company objectives systematic company planning process has been maintained to ensure effective development of company objectives and strategies. Working in conjunction with this control environment is Chevron Texaco's established network of specific accounting controls. This system consists of all the means devised by Chevron Texaco to direct, govern, measure, and verify its various activities. Examples of these accounting controls are: A. An appropriate segregation of duties- e. g., responsibility for the safeguarding of material in a company warehouse and responsibility for maintaining the inventory records for this material are not assigned to the same person. Section 1. Internal Controls.

Duties are executed within authorized scope and limits- e. g., purchase orders are checked to ensure the individual authorizing the expenditure of funds is authorized by management to do so. C. Transactions are recorded promptly and accurately- e. g., monthly reconciliation of total products shipped from a terminal is made with invoices sent to the terminal's customers. D. Access to assets is limited to authorized personnel- e. g., petty cash funds are kept in a locked container accessible only to the fund's custodian. E. Comparison of recorded amounts with physical assets- e. g., a monthly inventory of mog as at a terminal is compared with the inventory reflected on the accounting statements. While these guidelines are specifically directed to internal accounting controls-those bearing directly on the reliability of the financial statements and the broad objectives of transaction authorization, accounting and asset safeguarding-it must be kept in mind that internal controls concerned with administrative and operational control over the company's activities are also part of the internal control environment. Controls of this type usually concentrate on operational effectiveness and efficiency, adherence to managerial policies, and compliance with applicable laws and regulations, but they are also important to accounting control procedures and may impact the company's financial records. Thus, it is essential that these non-accounting controls be adhered to as strictly as the accounting controls discussed above. A summary of Chevron Texaco's internal controls is contained in Corporate Policy 130. It is recognized that, as with all systems, adequacy and effectiveness must be based on the recognition that the cost of any control normally should not exceed the benefits to be derived.

Balancing these risk factors requires economic analysis and management judgment. Of similar importance is the dynamic environment within whichChevronTexaco's record keeping functions operate. Systems must be designed with necessary flexibility to recognize and react to environmental changes. Accordingly, the Comptroller directs a monitoring process sufficient to ensure that cost / benefit considerations are appropriately reviewed, systems are revised and updated consistent with operational and environmental evolution, and the corporation and its subsidiaries are in compliance with the guidelines and procedures set forth herein. Compliance is also documented through an annual letter of representation submitted by the Section 1. Internal Controls management of each operating company to the appropriate Reporting Officer, which includes a description of the adequacy of its internal accounting control systems.

These letters are also reviewed by the Comptroller, who has functional responsibility for the Internal Controls compliance subject. Employees should report any suspected FCPA problems or accounting control weaknesses to the Corporation Comptroller, the Corporation's Auditing Department or to Corporate Security which will promptly notify the Corporation Comptroller and the General Manager, Auditing. No retaliatory action will be taken against any employee who in good faith reports any suspected problem. Alternatively, an employee may contact the Chevron Texaco Hotline at 1-800 -284-3015. Calls may be made anonymously and will be referred to the appropriate organization for investigation and follow-up. V. OTHER RULES AND REGULATIONS In addition to the accounting standards requirements of the FCPA, employees should also be aware of two supplemental regulations.

These rules, issued by the SEC in March 1979, provide as follows: A. No person shall, directly or indirectly, falsify or cause to be falsified, any corporate book, record or account. B. No Director or Officer of the corporation shall, directly or indirectly, in connection with an audit or examination: 1. Make or cause to be made a materially false or misleading statement. 2. Omit or cause to omit to state any material fact necessary to not mislead an accountant.

The penalties for violation of these regulations are the same as for violating the accounting standards section of the FCPA. It is important to note that even though the second rule is addressed to Directors and Officers, the conduct of other employees is covered under various other anti-fraud laws. They, therefore, are also prohibited from "misleading an accountant". Section 2. Conflicts of Interest SECTION 2. CONFLICTS OF INTEREST Revised October 1, 2001 I. INTRODUCTION ChevronTexaco respects the privacy and individual rights of its employees in the conduct of their personal affairs.

However, circumstances may arise in which the activities of an employee conflict with the best interests of Chevron Texaco, adversely affectChevronTexaco's reputation or relations with others, or interfere with fulfillment of the employee's job responsibilities. It is management's responsibility to ensure that employees are made aware that such activities must be avoided-both on the job and off. It is each employee's responsibility to avoid such activities, any activity, association, or interest which interferes with, or potentially interferes with, the employee's exercise of independent judgment in the performance of his or her responsibilities with Chevron Texaco and any activity which has the appearance of a conflict of interest, regardless of whether an actual conflict exists... For the purposes of conflict of interest, the activities of immediate family members of the employee are considered the actions of the employee; therefore, care should be taken to insure that appropriate precautions are taken. Employees may not use their position in Chevron Texaco or their influence in or as a representative of Chevron Texaco for personal advantage or for the improper advantage of others. Employees also should not allow themselves to become personally obligated to any person or business enterprise, which has or is seeking to have any dealings or relations withChevronTexaco.

Moreover, Chevron Texaco's assets may not be used directly or indirectly for an employee's personal use or advantage or for the improper advantage of others. It is not possible to list every circumstance that may give rise to a conflict of interest. These guidelines discuss only a few of the activities of employees, which may conflict with the best interests of Chevron Texaco. Employees are expected to exercise good judgment in dealing with other situations as may arise. Additional details are contained in Corporate Policy 282 (Conflict of Interests). Should any doubt exist regarding an actual or potential conflict of interest, employees should seek guidance from their management.

Counsel may also be obtained from the Corporation Comptroller. Employees should report any suspected conflict of interest to the Corporation Comptroller, Corporation's General Manager, Auditing or to Corporate Security. Corporation's General Manager, Auditing or to Corporate Security will promptly notify the Corporation Comptroller of any suspected conflict of interest. Retaliatory action will not be taken against an employee because that employee in good faith has reported a suspected conflict of interest. Section 2. Conflicts of Interest Potential conflicts of interest in four areas are discussed below: Gifts and Entertainment; Employee Outside Activities; Use of Company Information; and Employee Personal Financial Affairs.

II. GIFTS AND ENTERTAINMENT Gifts of more than a nominal value, travel, loans, cash in any amount, excessive entertainment, services, favored treatment, or substantial or unusual accommodations of any nature may not be accepted by employees when to do so could possibly place them in a position prejudicial or embarrassing to Chevron Texaco, interfere in any way with the impartial discharge of their duties, reflect adversely on their integrity or that ofChevronTexaco, or create an appearance of impropriety. Subject to this restriction, employees may accept gifts, meals, entertainment and other normal social amenities from customers, suppliers or other persons or concerns who do, or are seeking to do, business withChevronTexaco, and from a competitor of Chevron Texaco, so long as what is received has nominal value, is not extravagant under the circumstances and conforms to the laws and customs of the country in which it is received. Cash in any amount may not be accepted.

Employees may not make or promise to make any payment or gift to any individual or concern, if the making of such payment or gift violates any law, regulation or governmental decree or is made for the purpose of attempting to improperly influence an officer or employee of any customer, supplier, competitor or other person or concern, or an officer of any federal, state, local or foreign government, to take action in favor of Chevron Texaco. Meals, gifts, tickets to athletic or cultural events, entertainment, etc. may be extended to customers, suppliers and other persons only as social amenities and only so long as they conform to the laws and customs of the country in which the expenditure is incurred. Chevron Texaco will not under any circumstances tolerate the solicitation, receipt or payment of kickbacks or unauthorized rebates. Chevron Texaco requires the inclusion of conflict of interest clauses in its contracts. Chevron Texaco also retains the right to audit the contracting party for compliance with these clauses. The Corporation Comptroller must approve any exception..

EMPLOYEE OUTSIDE ACTIVITIES Outside activities which may involve the inappropriate or unauthorized use of company time, equipment or information, which detract from job performance, which may adversely affectChevronTexaco's reputation or public or government relations, or which might conflict in any material way with Chevron Texaco's best interests, require careful attention. Section 2. Conflicts of Interest. Employees are encouraged to participate in civic and political activities. However, these activities should not be allowed to adversely affect job performance or Chevron Texaco's reputation or public or government relations.

In such activities, including those where participation is on company time or by company accommodation, an employee is not considered to be a representative of, or in any manner acting for, Chevron Texaco. Inaddition, employees should avoid becoming a party to actions, which could in any way be interpreted as being in conflict with the best interests of Chevron Texaco. B. Self-employment or employment by others is permissible only if it does not adversely affect or conflict with job performance with Chevron Texaco. Except as otherwise provided for in this Section, no employee may have an interest in an organization dealing or seeking to deal with Chevron Texaco as a supplier or customer without the approval in writing of the head of the employing organization. C. No employee, without the prior approval of the Chairman of the Corporation Board, may agree to serve as an officer or director of any corporation or other entity organized for profit which is not affiliated with Chevron Texaco, if any of the following conditions exist: 1. its stock is available for public ownership through any channel; 2. its business pursuits are in competition with Chevron Texaco or a business relationship exists with Chevron Texaco; 3. the holding of such position can reasonably be presumed to have an adverse effect ofchevrontexaco-in any manner whatsoever; 4. the employee's job performance with Chevron Texaco could be adversely affected in any manner or degree. An employee who is a member of the board of another company in compliance with the foregoing guidelines may nevertheless be confronted with a business decision, which involves opportunities that compete with Chevron Texaco's activit ies. The employee may also come into possession of information, which could be used by, or be useful to ChevronTexaco to the detriment of the company on whose board the employee sits. In such situations, the employee should seek legal advice on the proper way to handle the conflict.

IV. USE OF COMPANY INFORMATION An employee's responsibility to act in the best interests of Chevron Texaco includes the proper use and protection of Chevron Texaco's confidential, proprietary or sensitive information, including information designated Classified or Confidential pursuant to Corporate Policy 575 ('Sensitive Information'). Sensitive Information is the exclusive Section 2. Conflicts of Interest property of Chevron Texaco and every employee who has gained knowledge of it is required to hold the information in trust and must safeguard it. Employees should avoid situations in which their actions may be interpreted by others as using information of Chevron Texaco's for personal benefit or for the benefit of others-whether or not such is really the case.

Inaddition, Sensitive Information discovered or developed by the employee during employment, whether in the course of employment or as a result of information gained while with Chevron Texaco, is the property of Chevron Texaco and, subject to applicable law, shall be held in confidence by the employee and not disclosed without prior permission ofChevronTexaco. Although management is responsible for assigning the appropriate security classification to all confidential, proprietary or sensitive material, it is virtually impossible to properly classify all such material. For this reason, employees are required to exercise caution and good judgment in discussing any aspect of Chevron Texaco's business with others, including fellow employees, in order to prevent the release to outsiders, or unnecessary dissemination within the company, of Sensitive Information. Employees may not use such information or disclose it to anyone without prior permission of Chevron Texaco, except as is necessary for the performance of their assigned work. A. Chevron Texaco does not discourage employees from delivering talks or presenting papers to outside organizations on subjects pertaining to activities in which Chevron Texaco is engaged or interested. Refer to Corporate Policy 360-Talks and Papers by Employees-for additional information and restrictions. However, formal presentations require prior approval of the employee's management.

In preparing papers, employees may quote from all material, which has been published for general distribution. Chevron Texaco figures or statements not included in these materials should be used only with a high degree of discretion and with the approval of the employee's management. Employee's obligations regarding use of company information continue following termination. Chevron Texaco reserves the right to protect its legal rights when any company information, whether or not confidential, proprietary or sensitive, is used improperly by current or former employees or others. V. EMPLOYEE PERSONAL FINANCIAL AFFAIRS Investments or financial transactions by employees, including those involving real property, should not involve the use of company time or property or the company's confidential, proprietary or sensitive information.

No employee may use any such information obtained while an employee for the financial gain of the employee or others, both during employment and after employment ceases. In addition, an employee is prohibited from holding a substantial financial investment in an organization which deals with Chevron Texaco as a Section 2. Conflicts of Interest supplier, contractor, purchaser, or distributor, or in one which competes withChevronTexaco. An employee's personal financial activities should also not be of the type or circumstance where one could reasonably presume that the use of company, time, property, or confidential, proprietary or sensitive information was used, whether or not that was the case. Employees should avoid personal investments and financial transactions where it can reasonably be presumed that an opportunity exists for a conflict of interest to occur. An employee's personal transactions with Chevron Texaco's suppliers, contractors, purchasers, distributors, or competitors may not involve the use of company time, property or information.

Such transactions must be on non-preferential terms and independent of any relationship with Chevron Texaco. Moreover, personal investments and transactions, including loans, with any company or person doing or seeking to do business withChevronTexaco as a supplier or customer, or which is in competition with Chevron Texaco, are prohibited unless such transactions are clearly non-preferential and independent of any relationship with Chevron Texaco. No employee may profit directly or indirectly from a stock or other securities transaction made on the basis of 'material' information about Chevron Texaco or another company, obtained by the employee in the course of company business but not yet made generally known. Employees must avoid situations where their actions could reasonably lead one to believe that they are using 'inside' information for their own personal profit or that of their friends, relatives or others-whether or not such is the basis. It is often difficult to say what information should be considered 'material.

' While it is not possible to prepare a definitive or exhaustive list, matters which in other circumstances have been considered 'material' include: dividend increases or decreases, changes in previously announced earnings estimates or financial results significantly different from those which were generally anticipated, a significant increase or decline in an important line of business, a troublesome decline in liquidity, major litigation developments, important new discoveries, product lines, licenses or patents, major public or private sales of additional debt or equity securities (but not simply rollovers or replacements of existing debt on expected terms), changes in normal and expected capital investment plans, major acquisitions or dispositions of assets or business lines, mergers and top management or control changes. Employees may own securities of publicly owned corporations which are regularly traded on the open market if they are not purchased as a result of confidential knowledge aboutChevronTexaco's operations, relations or negotiations with such corporations. Section 3. Foreign Corrupt Practices Provisions SECTION 3. FOREIGN CORRUPT PRACTICES PROVISIONS OF THE FOREIGN CORRUPT PRACTICES ACT AND RELATED LAWS Updated October, 2001 I. INTRODUCTION The Foreign Corrupt Practices Act (FCPA) was enacted in December 1977, and amended in August 1988 and November 1998. The Act has two parts.

One part, entitled " Accounting Standards", establishes rules governing the keeping of books and records and the establishment of internal control systems by all corporations registered with the Securities and Exchange Commission (SEC). Guidelines and procedures relating to the Accounting Standards provisions of the FCPA and penalties for violations thereof a reset forth in Section 1 of this Manual. The other part, entitled "Foreign Corrupt Practices", deals with payments to foreign officials by any U.S. corporation or U.S. citizen and penalties for violations of the Act. The guidelines and procedures set forth below apply to the foreign corrupt practices part of the FCPA and to various related laws. Virtually all countries have laws prohibiting or regulating payments to political parties, candidates for public office and government officials. Until very recently, however, inmost countries such laws applied only to payments that relate to political or governmental activities of the country or to business transactions occurring within its borders.

With the enactment of the FCPA, the United States took the step of attempting to regulate payments and gifts to government officials and political parties in every country of the world whenever any participation, however remote, by U.S. citizens or corporations could be found. This means that dealings with government officials in all countries must be scrutinized not only under the laws and regulations of the official " sown country, but also under the foreign corrupt practices provisions of the FCPA. For many years, the United States has pressed the international community of nations through diplomatic channels to adopt laws that are comparable to the FCPA. This effort recently began to bear fruit, most notably through the adoption by the Organization for Economic Cooperation and Development (OECD) of the " Convention on Combating Bribery of Foreign Public Officials in International Business Transactions" (the "OECD Convention"). The purpose of the OECDConvention is to create a standard code of ethical conduct that is applicable to all companies, of whatever nationality, competing for international business. Section 3.

Foreign Corrupt Practices Provisions Thirty-four countries have signed the OECD Convention, including all 29 OECD member countries and five countries that are not members of the OECD. The countries that are parties to the Convention as of May 1, 2001, are listed in Exhibit 1. Each country that ratifies the OECD Convention obligates itself to enact and enforce implementing legislation to criminalize bribery of foreign public officials in international business transactions. Generally speaking, such laws will apply to the actions of all businesses organized in those countries and to any action that is taken in those countries in connection with the bribery of an official of another country. One or more of these laws may apply in any particular situation, and in that event it is necessary to comply with such other laws, in addition to the FCPA. The November 1998 amendment of the FCPA that is mentioned in the first paragraph, above, was required to conform the FCPA to the requirements of the OECDConvention.

In particular, the amendment expanded the definition of the officials who are covered by the prohibition on payments and it expanded the basis for jurisdiction over both U.S. and non-U.S. persons and entities. The Guidelines below reflect the 1998 amendment. Chevron Texaco Corporation (the "Company") has a long-established policy prohibiting all improper or unethical payments to government officials anywhere in the world, and has established an exemplary record in carrying out this policy. Nevertheless, detailed guidelines for complying with the foreign corrupt practices provisions of the FCPA are required because of the many complexities and uncertainties in the Act and because of its extremely far-reaching effect. Thus, the purpose of these guidelines is to ensure full compliance with the FCPA and continuation of the Company's fine record in maintaining lawful and ethical dealings with governments throughout the world.

II. FOREIGN CORRUPT PRACTICES PROVISIONS OF THE FCPAThe foreign corrupt practices provisions of the FCPA apply to the following persons and corporations: A. All persons who are citizens of the United States; B. All other persons who reside in the United States; C. All U.S. corporations, partnerships or other business organizations; and. All other corporations, partnerships and business organizations that have their principal place of business in the United States. Section 3. Foreign Corrupt Practices Provisions In addition, individuals who are neither citizens nor residents of the United States maybe come covered by the Act if they participate in a prohibited activity as an officer, director, employee or agent of any U.S. corporation; and such persons and foreign business organizations may become covered by the Act if they engage in any prohibited activity within the territory of the United States.

In general, the foreign corrupt practices provisions of the FCPA prohibit any payment to "foreign official" for the purpose of influencing him to assist in obtaining or retaining business for any person, including any business organization. Some important points to note about the FCPA are set forth below. A. The Act applies to any act or event which is "in furtherance of" a payment to a foreign official. B. The "payment" clause of the FCPA is broadly phrased. It covers not only the actual payment of money but also an offer, promise or authorization of the payment of money and an offer, gift, promise or authorization of the giving of " anything of value". Thus, an offer, promise or authorization to pay money or give something of value can violate the FCPA, whether or not any payment or gift is actually made. C. The Act applies to payments to foreign officials, foreign political parties, officials of foreign political parties and candidates for foreign political office. o The term "foreign official" is defined to mean an officer, employee or other person acting in an official capacity for a foreign government or any department, agency or instrumentality thereof or for a "public international organization". o The term "instrumentality" includes business corporations owned or controlled by a foreign government. o The term "public international organization" means any organization that has been, or is hereafter, designated in an Executive Order issued by the President. Dozens of organizations have been so designated, including the United Nations and many of its agencies, international financial institutions (such as the European Bank for Reconstruction and Development and the International Monetary Fund), the International Committee of the Red Cross and many others. A list of "public international organizations", current as of June 30, 2001, is attached hereto as Exhibit 2. D. The Act applies to any payment to any person while knowing or believing there isa high probability that at least a portion of the money or thing of value "will be Section 3.

Foreign Corrupt Practices Provisions offered, given, or promised, directly or indirectly" to a foreign official, foreign political party, party official or candidate for public office in a foreign country. Thus, normal payments to independent third parties such as agents, lawyers, distributors, contractors, consultants, suppliers, et al., or to joint venture participants or non controlled joint venture entities, may be deemed to violate theFCPA if it appears likely that the recipient will make improper payments to foreign officials in connection with its business arrangements with the Company. E. Payments to foreign officials are illegal under the Act if made for either of the following purposes in order "to assist... in obtaining or retaining business for or with, or directing business to, any person": 1. Influencing any act or decision of the foreign official in his official capacity, or inducing such foreign official to do or omit to do any act in violation of the lawful duty of such official; 2. Inducing the foreign official to use his influence to affect or influence an act or decision of his government; or 3. Securing any improper advantage. The "retaining business" clause has a broad reading and includes a prohibition against corrupt payments relating to the execution or performance of contracts or the carrying on of existing business, such as a payment to a foreign official for the purpose of obtaining more favorable tax treatment. F. The FCPA uses the word "corruptly" in defining the act or event that is defined to be unlawful.

The legislative history of the FCPA indicates that "corruptly " connotes an intentional wrongdoing or evil motive. G. The criminal penalties for violating the foreign corrupt practices provisions of theFCPA are very severe. Corporations are subject to fines upon conviction of up to$2 million. Individuals who violate the Act are subject to prison sentences of up to five years and fines of up to $100,000. These fines may be increased under other provisions of law if the harm caused or benefit received as a result of the violation exceeds the specified fines or if aggravating circumstances are found to exist. Civil penalties of up to $10,000 may also be imposed against corporations and individuals. The FCPA states that fines and penalties imposed upon individuals may not be paid directly or indirectly by any corporation for which they may have acted.

Section 3. Foreign Corrupt Practices Provisions. RELATED LAWS In addition to the FCPA, a number of other U.S. criminal statutes have been used to prosecute corporations and individuals for questionable payments abroad. The mail and wire fraud statutes have been used to prosecute overseas payments to foreign officials made by U.S. companies to obtain contract approvals and work permits. The False Statements Act, which prohibits making false statements or representations in any matter within the jurisdiction of any department or agency of the U.S. government, has been invoked in a number of different cases, including prosecution of a company for allegedly falsifying its Shipper's Export Declaration form filed with the Department of Commerce because payments to foreign officials were not deducted in calculating export values. Also, criminal charges under U.S. currency reporting laws, income tax laws, antitrust laws and conspiracy laws have been lodged by the U.S. Department of Justice against various corporations in connection with payments to foreign government officials.

IV. DISCLOSURE REQUIREMENTS UNDER THE U.S. SECURITIES LAWS The principal U.S. laws governing the trading in stock and other securities of corporations are the Securities Act of 1933 and the Securities Exchange Act of 1934. Itis a major premise of these laws that a fair, honest and efficient system for trading incorporate securities requires the public disclosure of all financial and other information needed by investors to make informed judgments about a corporation's stock or other security. In addition to routine financial reports, any other "material" matter concerning a corporation must be publicly disclosed promptly and accurately. Under the SEC definition, a "material" matter is one as to which an average prudent investor ought reasonably to be informed before buying or selling a corporate security. Historically, the materiality of any transaction or other matter has been assessed in terms of its financial significance.

However, at about the time the FCPA was enacted, the SEC took the position that under some circumstances matters that reflect on the quality of governance of a corporation, may be material regardless of their financial impact. For example, the SEC charged a number of U.S. corporations with violations of the disclosure rules for failure to report publicly in a timely fashion on payments to foreign officials (including payments made by foreign subsidiaries) regardless of their financial materiality. Failure to comply in a timely fashion with disclosure requirements of the U.S. securities laws can lead to the imposition of severe penalties by the SEC, including injunctions relating to the way a corporation's operations are conducted. Section 3. RESPONSIBILITY FOR COMPLIANCE The Corporation Comptroller has the primary responsibility for the Company's compliance with the FCPA and related laws and regulations. The General Manager, Auditing, has responsibility for periodic review of such compliance.

VI. COMPLIANCE PROCEDURES In order that employees of the Company may be assured of acting consistently with all aspects of the FCPA and related laws and regulations, the Corporation has centralized the handling of all sensitive payments-related matters. The responsibility for receiving and coordinating the formulation of a response to all questions arising under the FCPA and related laws and regulations has been assigned to the Corporation Comptroller who will ensure that they are fully evaluated by the Company's legal counsel in light of the Company's worldwide operations. It is imperative that close and prompt attention be given to any transaction, no matter how insignificant, that conceivably could give rise to violations of the FCPA. The following specific procedures have been established for all employees of the Company: A. No payment or gift of any kind whatsoever shall be made to any foreign official (as defined in Part II, above), which violates any law, regulation or decree of the country in question. In addition, for operating companies that are organized under the laws of a third country that, pursuant to the OECD Convention, has adopted a law that is comparable to the FCPA, no payment or gift shall be promised, offered or given that violates the law of such third country. B. Expenditures for meals, entertainment and other normal social amenities with respect to foreign officials must not be extravagant and must conform to the laws and customs of the country in which the expenditures are incurred.

Operating companies whose employees may have occasion to entertain foreign officials should formulate policies applicable to their specific circumstances and submit these policies in advance to the Corporation Comptroller for approval. C. Gifts may be given to foreign officials only if the gifts are of modest value and conform to normal social amenities in the official's country. Operating companies should obtain advance approval from the Corporation Comptroller for specific gifts and for seasonal or other routine gift-giving practices. D. The Company may, of course, pay or provide travel-related expenses of foreign officials who in the performance of official duties visit Company installations or otherwise incur reasonable and bona fide expenses in connection with the Section 3. Foreign Corrupt Practices Provisions Company's business operations. Advance approval of the Corporation Comptroller must be obtained for the payment of travel-related expenses of foreign officials, including the furnishing of transportation on aircraft owned or chartered by the Company.

The following matters are particularly sensitive, and requests for approval of such matters must always be supported by a demonstrably valid business purpose: 1. The payment for travel-related expenses of relatives, friends or associates of foreign officials; 2. Any proposal under which cash or its equivalent would be provided to foreign officials, whether by way of reimbursement, per diem allowance, gift certificate or otherwise; or 3. Any significant or unusual travel-related activities, including, for example, recreational side trips during business travel. Any souvenirs given to foreign officials are subject to Procedure C, above, concerning gifts. E. In certain parts of the world it is common for government employees to receive so-called "facilitating" payments to expedite or secure the performance of routine governmental action by a foreign official. The FCPA contains a narrowly drawn exception that permits such payments under limited circumstances such as obtaining documents to qualify to do business in a foreign country or processing governmental papers.

The exception does not cover any action by a foreign official who is involved in the decision making process for awarding new business or continuing existing business. Accordingly, each business unit that has any occasion to make any facilitating payments shall obtain advance approval from the Corporation Comptroller before making any such payments and shall keep the Corporation Comptroller fully and currently informed concerning such payments. F. All contributions of money or services to political parties or officials thereof or to candidates for political office outside the United States must be reviewed for FCPA compliance by the Company's legal counsel and approved in advance by the Corporation's Vice-President for Public Affairs and the Chairman of the Board of Directors. G. Before engaging an agent, consultant, advisor, joint venture participant or other representative who may have dealings with foreign governments, agencies or entities thereof on behalf of the Company, a sufficient investigation should be undertaken to ensure that any such representative does not intend to engage in any Section 3. Foreign Corrupt Practices Provisions improper practices. In determining whether to engage a particular representative, factors such as the representative's reputation and qualifications, the manner and reasonableness of compensation, the relationship, if any, between the owners and employees of the representative and a foreign official, the presence or absence of any secret partners, the willingness of the representative to fully disclose its relationship with the Company and the legality of the relationship under local law will be considered. H. All new or renewal contracts (whether oral or written) with consultants, representatives, agents, advisors, or joint venture participants who are expected to have dealings with foreign governments or agencies thereof or with public international organizations on behalf of the Company, must be reviewed in advance by the Corporation Comptroller and the Company's legal counsel. Ordinarily, such contracts must contain a provision similar to that included in Exhibit 3.

Also, when a right-to-audit clause is included in a contract (in accordance with the Company's policies governing contracts with contractors or suppliers of goods and services), the right-to-audit clause should be made applicable to this provision. I. In many countries it is a common and entirely lawful practice for government officials to own or operate business enterprises. While the FCPA and related laws obviously do not prohibit legitimate business relationships between the Company and business enterprises owned or controlled by foreign officials, great care must be taken to avoid any employment of or association with any such enterprise in circumstances that might be deemed to constitute an evasion of the proscriptions of the FCPA. The Corporation Comptroller must be kept fully and currently informed of any such relationships. J. Any payments to, or compensation arrangements with, lawyers, tax agents or others retained to assist the Company in resolving tax or other disputes with foreign government instrumentalities must be approved in advance by the Corporation Comptroller if they involve other than normal hourly charges. K. The Company may not enter into any transaction with agents, contractors, consultants, lawyers, distributors or other persons that is designed to permit such persons to circumvent currency, tax or other laws of a foreign country. Any transaction to which the Company is a direct or indirect party that may have the appearance of permitting any person to circumvent such laws must receive the advance approval of the Corporation Comptroller.

Particular care must be taken with respect to "split payments". A "split payment " is any payment for services that is made outside the country in which the services are performed or in a currency other than the local currency of that country. With Section 3. Foreign Corrupt Practices Provisions one exception noted below, the Corporation Comptroller's advance approval should be obtained for all split payments. To expedite the review process, the request for such approval should include (a) a written statement from the service provider, containing a valid business reason for the payment instructions; and (b) a statement from the business unit that the proposed payment complies with all local laws and regulations. Notwithstanding the foregoing, payment may be made without the Corporation Comptroller's advance approval to, and in the currency of, the country in which the provider is incorporated, if all three of the following conditions are satisfied: 1.

The provider's principal administrative or operational office is also located in that country (Note that a "registered office" does not qualify for this purpose unless it is also the provider's principal administrative or operational office); 2. The provider is not owned or controlled by nationals of the country in which the services are performed; and 3. Local law does not require the payment to be made in the country where the services are performed or in the currency of that country. L. Complete and accurate records shall be maintained of all transactions, including transactions that relate in any way, directly or indirectly, to a foreign official. Any questions on how to record such transactions should be referred to the Corporation Comptroller. M. The guidelines apply to operations of joint ventures and partnerships of which the Company is the operator or managing partner.

With respect to affiliate corporations (i. e., corporations in which the Company owns directly or indirectly not more than 50 per cent of the voting stock) and joint ventures or partnerships in which another company or person is the operator or managing partner, any practice or transaction which gives rise to question or doubt under these guidelines should be reported at once to the Corporation Comptroller. It should be kept in mind that the FCPA prohibits any act that is "in furtherance" of a prohibited payment and that all U.S. citizens or residents who serve as directors, officers, employees or representatives of affiliated corporations are personally subject to theFCPA.N. Any transaction, no matter how insignificant, that might give rise to a violation of the FCPA, as well as any questions that may arise pertaining to matters discussed in these Guidelines should be referred to the Corporation Comptroller or the Company's legal counsel, with a copy to the Corporation Comptroller. Section 3. Adherence to these guidelines will be monitored by the internal auditors and through the Corporation's regular system of management representation letters on compliance matters.

In addition, employees should report any suspected FCPAproblems or accounting control weaknesses to the Corporation Comptroller, the Corporation's Auditing Department or to Corporate Security which will promptly notify the Corporation Comptroller and the General Manager, Auditing. Alternatively, an employee may contact the Company " hotline at 1-800-284-3015. Calls may be made anonymously and will be referred to the appropriate organization for investigation and follow-up. Section 3.

Foreign Corrupt Practices ProvisionsEXHIBIT 1 SIGNATORIES TO OECD CONVENTION (Current as of May 1, 2001) OECD Member StatesAustraliaAustriaBelgiumCanadaCzech RepublicDenmarkFinlandFranceGermanyGreeceHungaryIcelandIreland ItalyJapanKorea (South) LuxembourgMexicoNetherlandsNew Zealand NorwayPolandPortugal SpainSwedenSwitzerlandTurkey United Kingdom United States Section 3. Foreign Corrupt Practices Provisions Non-OECD Member StatesArgentinaBrazil Bulgaria Chile Slovak Republic Slovenia Ratification expected mid-2001 Ratified, but implementing legislation is pending Expected to join Convention by end of 2001 Section 3. Foreign Corrupt Practices ProvisionsEXHIBIT 2 PUBLIC INTERNATIONAL ORGANIZATIONS (As Defined by U.S.) (Current as of June 30, 2001) African Development Bank African Development Fund Asian Development Bank Border Environment Cooperation Commission Caribbean Organization Commission for Environmental Cooperation Commission for Labor Cooperation Commission for the Study of Alternatives to the Panama Canal Customs Cooperation Council European Bank for Reconstruction and Development European Space Agency Food and Agriculture Organization Great Lakes Fishery Commission Hong Kong Economic and Trade Offices Inter-American Defense Board Inter-American Development Bank Inter-American of Institute of Agricultural Sciences Inter-American Investment Corporation Inter-American Statistical Institute Inter-American Tropical Tuna Commission Intergovernmental Maritime Consultative Organization International Atomic Energy Agency International Bank for Reconstruction and Development International Boundary and Water Commission.