June 16, 2005

Expert Reports for Shushufindi-48, Sacha-51, Sacha-18 and Sacha-65 Judicial Inspections Show No Petroleum-Related Health Risks at Remediated Sites

Ten Expert Reports Confirm That Texaco Petroleum's Remediation Program Complied With Government and Contractual Requirements and Met All Applicable Ecuadorian and International Environmental Criteria

All Drinking Water Samples Meet WHO and USEPA Safe Drinking Water Standards for Petroleum-Related Chemicals; Contain Dangerously High Levels of Waste Bacteria Known to Cause Health Impacts

Plaintiffs' Attorneys Have "No Technical Basis" for Claims

QUITO, Ecuador, June 16, 2005 - Laboratory results from four new judicial site inspection reports filed with the Superior Court of Nueva Loja - for the Shushufindi-48, Sacha-51, Sacha-18 and Sacha-65 well sites - confirm previously reported data that there are no petroleum-related public health risks at sites remediated by Texaco Petroleum Company (Texpet), and that Texpet's remediation program complied with Ecuadorian government and contractual requirements, and met all applicable international environmental criteria.

Data results for every drinking water source tested also support previous findings that the water contains no petroleum-related compounds at levels that would be unsafe for people to drink. However, the findings do show these drinking water sources contain significantly elevated levels of bacterial contamination - typically caused by human or animal fecal waste and wholly unrelated to oil production - that "could cause different types of diseases in people or animals that consume the water." That data is aligned with the growing scientific evidence that health concerns reported in the area are more likely due to bacteria-infected water, rather than petroleum exposure dating back to the time of Texpet's operations more than a decade ago.

Sara McMillen, ChevronTexaco's senior scientific advisor for the case, said: "Each of the ten technical reports we submitted to the Court verify for the public record both the quality and efficacy of Texpet's remediation effort and confirm the government's certification of Texpet's compliance with its obligations under the 1995 remediation agreement between Texpet, Petroecuador and the Republic of Ecuador."

McMillen continued, "Our findings to date support the fact that water samples do not contain petroleum-related substances above levels safe for drinking water, which means that people are not drinking water that is contaminated with hydrocarbons. However, the dangerously high bacteria levels we've found in almost every drinking water source tested to date far exceed applicable Ecuadorian, World Health Organization and United States Environmental Protection Agency drinking water standards, and underscore concerns we've raised about the proven association between these bacteria and illnesses reported in the Amazon."

Specific highlights from each report validate that the sites remediated by Texpet have caused no harm to health or the environment.

  • Contrary to prior claims, a palm tree plantation near Shushufindi-48 has not been impacted by hydrocarbon residues; rather the palm trees suffer from Sagalassa valida root worm, and the "Pudrición del Cogollo" (heart rot) disease.
  • At Sacha-51, oil contamination exists at sites not remediated by Texpet due to ongoing Petroecuador operations and spills; however, pits that had been remediated by Texpet were found to pose no risk to human health or the environment. Well site records revealed that in 2002, Petroecuador spilled 1,120 barrels of crude oil at the Sacha-51 site.
  • Expert analysis of laboratory data for Sacha-65 revealed that remediated soils are covered with at least 1 meter of clean soil and that the weathered hydrocarbon residue is immobile and non-toxic.
  • Soil testing took place at two areas at the Sacha-18 site, only one of which was included in Texpet's 1995 remediation program. Neither area presents a risk to human health. In the Texpet-remediated area, representative levels of petroleum hydrocarbons in soil were below applicable international standards, while samples from the pit closed by Petroecuador prior to the Texpet remediation program contained elevated levels of total hydrocarbons.

Conclusive findings from these four sites were contained within the seventh, eighth, ninth and tenth Expert Reports filed respectively with the Court. Superior Court President Efraín Novillo is scheduled to conduct a total of 122 inspections in connection with an environmental lawsuit filed against ChevronTexaco.

Samples were tested in the United States at Severn Trent Laboratories in Houston, Texas, and at NewFields, in Rock Island, Massachusetts. Reports containing testing data and expert conclusions were filed with the Court in May 2005.

REPORT HIGHLIGHTS

SHUSHUFINDI-48 TEST RESULTS OVERVIEW

Laboratory tests for Shushufindi-48 revealed that there is no risk of adverse health impact at sites remediated by Texpet. Further, contrary to allegations made by the landowner during the inspection, the palm tree plantation located near the site has not been adversely affected by hydrocarbon residues; rather, it suffers from agricultural pests including the Sagalassa valida root worm and the "Pudrición del Cogollo" disease.

Scope

The Shushufindi-48 site inspection included soil testing at four areas that were part of the 1995 Remedial Action Plan, and at a number of other areas outside of Texpet's scope of work, which are Petroecuador's responsibility. A total of 40 samples were taken, analyzed and reported from the site.

Inspection Date: September 9, 2004

Test Result Highlights:
No Risk of Human Exposure
  • The report findings confirmed that there is no potential for human exposure or environmental damage from the remediated pits.
  • All pits are covered by at least 0.8 meters of clean soil, preventing direct exposure to any remaining crude oil, which is highly degraded.
  • Degraded crude oil found beneath the surface of the remediated pits does not have the potential to migrate or to appreciably dissolve into groundwater.
Analysis of Results
  • Soil samples showed no unsafe levels of potentially harmful components including BTEX (benzene, toluene, ethyl-benzene and xylene), PAHs (Polycyclic Aromatic Hydrocarbons), and metals.
  • Total hydrocarbon levels detected in the pits were below applicable international criteria in 20 of 21 samples. One sample with elevated levels was collected at a depth of more than 0.95 m beneath clean surface soil from Pit 4. The other eight samples collected at smaller and greater depths from Pit 4 contained total petroleum hydrocarbon concentrations below all applicable international criteria.
  • According to the report prepared by an Ecuadorian agronomist expert in palm trees, the palm tree plantation adjacent to the well pad is not affected by hydrocarbon residues that could exist in the subsurface; rather, it is affected by plagues such as the Sagalassa valida root worm and the "Pudrición del Cogollo" disease.
Remediation Program:
  • According to the analytical results provided by an internationally certified laboratory, Texpet-remediated sites pose no public health or environmental risks and Texpet conducted an effective remediation that met the closure requirements of the Remedial Action Plan approved by the Government of Ecuador and Petroecuador, and applicable international remediation standards of the time.

SACHA-51 TEST RESULTS

Laboratory tests for Sacha-51 revealed that the four pits that were remediated by Texpet as part of the 1995 Remedial Action Plan pose no human or environmental risk. Petroecuador assumed operation for the site in 1990, and records for Sacha-51 show that in 2002, 1,120 barrels of crude oil were spilled at the site. This oil was found in Pit 5, which was not part of the remediation program.

Scope

The Sacha-51 site inspection included testing at four areas that were part of the 1995 Remedial Action Plan. Testing was also conducted at a fifth area which was not included in the remediation program. A total of 34 soil and water samples were taken, analyzed and reported from the site.

Inspection Date: September 30, 2004

Test Result Highlights:
No Risk of Human Exposure
  • Testing of a ground-water sample from a nearby resident's well and two surface water samples from a ravine used by nearby residents for drinking and domestic purposes northeast of the residence, showed that all petroleum-related chemicals meet applicable safe drinking water limits. However, tests did show significantly high levels of bacterial contamination in water caused by human or animal fecal waste.
  • A surface cover of more than 0.35 meters of clean soil over the remediated pits prevents human or animal contact with subsurface degraded petroleum.
  • Degraded petroleum in the subsurface cannot volatilize to any significant degree and does not have the ability to migrate to, or dissolve appreciably into groundwater.
Analysis of Results:
  • Analytical results for all soil and water samples indicate that petroleum-related chemicals including BTEX (benzene, toluene, ethylbenzene, xylenes), PAHs (Polycyclic Aromatic Hydrocarbons) and metals are at safe levels.
  • Elevated levels of total hydrocarbons were found only in subsurface soils in Pit 5, which was not included in the scope of Texpet's remediation. Pit 5 was excluded from the Texpet remediation in 1995 in accordance with a 'No Further Action' classification due to the fact that no crude oil was found in the pit at the time. In 2002 - twelve years after Texpet ceased operations - Petroecuador reported a 1,120 barrel crude oil spill at Sacha-51.
Remediation Program:
  • Testing results indicate that the remediation undertaken by Texpet was successful.
  • The only samples that do not comply with international criteria were collected from Pit 5, which was outside of Texpet's agreed upon scope of work, and which remains Petroecuador's responsibility today.

SACHA-18 TEST RESULTS

Two areas at the Sacha-18 were tested during the inspection. Scientific data retrieved from this inspection revealed that there are no hazards to public health or the environment from Texpet operations.

Scope

The Sacha-18 site inspection included testing at two areas: one that was part of Texpet's 1995 Remedial Action Plan (RAP), and one that was closed by Petroecuador prior to the beginning of the 1995 RAP. Water sampling of local drinking water and groundwater were also part of the inspection. A total of 38 samples were taken, analyzed and reported from this site.

Inspection Date: February 16, 2005

Test Result Highlights:
No Risk of Human Exposure
  • All drinking water and groundwater samples met safe drinking water limits for all petroleum-related chemicals. However, waste-related bacterial contamination was found in all but one water sample.
  • The area remediated by Texpet under the 1995 RAP poses no human or environmental risk. Analytical results for soils indicate that all petroleum related chemicals including BTEX (benzene, toluene, ethyl-benzene and xylene), PAHs (Polycyclic Aromatic Hydrocarbons) and metals are at safe levels.
  • Degraded petroleum below the surface of the site is protected by a clean soil cover and thus is not mobile and will not migrate from the area or contaminate groundwater.
  • Samples from the pit closed earlier by Petroecuador contained elevated levels of total hydrocarbons, but concentrations of potentially harmful components of petroleum including BTEX, PAHs and metals were at safe levels. Degraded crude oil in this former pit is covered with clean soil, preventing direct exposure of humans or animals.
Analysis of Results
  • In the soil tested, the levels of BTEX and PAH's, have been significantly degraded and their concentration in the soil is not detectable or below safe levels, and does not represent any health hazard to the neighbors or to the environment.
  • "Metals that are naturally occurring in Sacha petroleum are in concentrations lower than typical soils and therefore could not cause a significant increase in the concentration of metals in the soil."
  • Bacterial contamination, resulting from unsanitary living conditions, was detected in all samples of drinking water and three out of four samples of local groundwater.
Remediation Program
  • Testing results from the Texpet-remediated area show that Texpet conducted an effective remediation that met the closure requirements of the Remediation Plan approved by the Government of Ecuador and Petroecuador and all applicable international remediation standards of the time.
  • A second area included in the inspection was closed by Petroecuador. It was classified as "No further Action" site by the governmental authority in prior to the 1995 remediation program and was therefore not include in the RAP.

SACHA-65 TEST RESULTS OVERVIEW

Laboratory tests for Texpet remediated sites at Sacha-65 uncovered only highly degraded hydrocarbon residue, as harmless as asphalt, which poses no threat to human, plant or animal life.

Scope

The Sacha-65 site inspection included testing at two areas that were part of Texpet's agreed upon Remedial Action Plan (RAP), and testing of several other areas outside of Texpet's scope of work that are the responsibility of Petroecuador. A total of 18 samples were taken, analyzed and reported from the site.

Inspection Date: November 18, 2004

Test Result Highlights
No Risk of Human Exposure
  • Because the Texpet-remediated areas tested were previously closed and protected by a clean layer of soil, there is no direct exposure to any remaining petroleum-related chemicals by human, plant or animal life.
  • According to the report: "Direct exposure is not possible because the remediated soil is covered with soil almost one meter thick." Further, human exposure from drinking ground or surface water "is not possible because the crude is not mobile."
Analysis of Results

The weathered hydrocarbons remaining in the environment do not pose a risk to the health of people, plants or animals because:

  • The rapid degradation of crude oil by natural weathering mechanisms in tropical environments reduces any potential risks and prevents movement of the hydrocarbons. Soil sample results showed no unsafe levels of potentially harmful components such as PAHs (Polycyclic Aromatic Hydrocarbons) and the almost complete absence of BTEX (benzene, toluene, ethylbenzene and xylene).
  • "Metals that are naturally occurring in Sacha petroleum are in concentrations lower than typical soils and therefore could not cause a significant increase in the concentration of metals in the soil."
  • The weathered hydrocarbon residue found in two subsurface samples is immobile and non-toxic.
  • An industrial water well (built approximately two months before the judicial inspection) at a local cinderblock factory was tested and contains no petroleum hydrocarbons. However, it does have a high level of coliform bacteria, both fecal and total, caused by human or animal waste.
Remediation Program
  • The report states that scientific testing indicates that the remediated sites pose no public health or environmental risks and that Texpet conducted an effective remediation that met the closure requirements of the Remedial Action Plan approved by the Government of Ecuador and Petroecuador and all applicable international criteria of the time.

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