TESORO PETROLEUM CORPORATION
 
Dear Tesoro Stockholder:
 
The Tesoro Annual Meeting on February 9, 1994 is only a few days away. This
meeting is very important since a vote will be taken to reclassify 1,319,536
shares of $2.16 Cumulative Convertible Preferred Stock, including unpaid
dividends, into approximately 6,465,859 shares of Common Stock and to approve
amendments to our Company's Certificate of Incorporation.
 
THIS RECAPITALIZATION WILL HELP TO DETERMINE TESORO'S FUTURE. EVEN IF YOU HAVE
SOLD SOME OR ALL OF YOUR SHARES, YOU, AS THE RECORD DATE HOLDER, ARE ENTITLED TO
VOTE. WE STRONGLY URGE YOU TO REVIEW THE PROXY MATERIALS PREVIOUSLY SENT YOU AND
THE THE FOLLOWING INFORMATION AND THEN EXERCISE YOUR VOTING RIGHTS.
 
Consider:
 
      * Your Directors have unanimously approved the recapitalization. The
        Company has obtained an opinion from a nationally recognized investment
        bank that as of December 30, 1993, the recapitalization's terms are fair
        from a financial point of view to the holders of the $2.16 Preferred
        Stock and Common Stock.
 
      * The Company has entered into an agreement in principle with Croyden
        Associates to settle a class action lawsuit challenging the
        recapitalization.
 
      * Assuming consummation of the reclassification and the related exchange
        offer for the Company's 12 3/4% Debentures, on a pro forma basis at
        September 30, 1993:
 
          * Book value per Common share would increase approximately 247%, from
            80 to $2.78.
 
          * Long Term debt and redeemable Preferred Stock would be reduced from
            $257 million to $168 million.
 
          * Common Stock and other stockholders' equity would increase from $44
            million to $120 million.
 

      * On January 31, 1994, the Common Stock and $2.16 Preferred Stock closed 
        at $10,625 and $50,000 respectively.
 
If you no longer have the proxy statement, please call Georgeson & Company Inc.,
toll-free at 1-800-223-2064 to receive a new copy.
 
THE RECLASSIFICATION IS AN IMPORTANT MATTER FOR THE FUTURE OF TESORS. SINCE TIME
IS HORT AND YOUR VOTE IS EXTREMELY IMPORTANT, WE HAVE ESTABLISHED A METHOD TO
VOTE BY TOLL-FREE TELEPHONE. WE STRONGLY URGE TYOU TO VOTE IN FAVOR OF ALL THE
PROPOSALS. PLEASE FOLLOW THE SIMPLE STEPS LISTED BELOW.
 
                                                    Sincerely,
                                                    Tesoro Petroleum Corporation
 
              TOLL-FREE PROXYGRAM OPERATORS WHO ARE INDEPENDENT OF THE
                    COMPANY ARE AVAILABLE TO ASSIST YOU NOW!!!!
           
           1. CALL TOLL-FREE 1-800-437-7699 ANYTIME, DAY OR NIGHT.
           
           2. TELL THE OPERATOR THAT YOU WISH TO SEND A COLLECT PROXYGRAM
              TO ID N. 4892, TESORO PETROLEUM CORPORATION.
           
           3. STATE YOUR NAME, ADDRESS AND TELEPHONE NUMBER.
           
           4. STATE THE BANK OR BORKER AT WHICH YOUR SHARES ARE HOLED AND
              YOUR CONTROL NUMBER AS
              SHOWN BELOW:
              #A#
              BANK OR BROKER: #B#
                                                          CONTROL NO. #C#
                                                          NO. OF SHARES: #D#
           
           5. READ THE TEXT OF THE PROXY CARD, WITH YOUR VOTING
              PREFERENCES, TO THE OPERATOR.
           
           IF YOU NEED ASSISTANCE IN VOTING, CALL OUR SOLICITOR,
           GEROGESON & COMPANY INC. AT
           1-800-223-2064.
 

    
    COMMON                TESORO PETROLEUM CORPORATION                COMMON
 
          PROXY -- ANNUAL MEETING OF STOCKHOLDERS -- FEBRUARY 9, 1994
 
          THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
 
    The undersigned stockholders of Tesoro Petroleum Corporation (the 'Company')
hereby appoints Bruce A. Smith and James C. Reed, Jr., or either of them,
proxies of the undersigned with full power of substitution to vote at the Annual
Meeting of Stockholders of the Company to be held on Wednesday, February 9,
1994, at 10:00 a.m., New York City time, at The Hotel Intercontinental, 111 East
48th Street, New York, New York, and at any adjournment thereof, the number of
votes which the undersigned would be entitled to cast if personally present.
 
    THIS PROXY, WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSAL 1, FOR PROPOSAL 2, FOR THE NOMINEES LISTED IN PROPOSAL 3,
FOR PROPOSAL 4 AND FOR PROPOSAL 5.
 
Item 1 -- Proposal to amend the Certificate of Incorporation of the Company to
          (i) give effect to the reclassification of the $2.16 Preferred Stock
          into Common Stock, (ii) eliminate staggered terms of directors and
          (iii) require, in the absence of the approval of 66 2/3% of the
          disinterested directors, the affirmative vote of the holders of not
          less than 80% of the Company's outstanding shares of capital stock,
          voting together as a single class, to amend, in a manner adverse to
          the Company, certain agreements between the Company and MetLife
          Louisiana upon consummation of the reclassification.
 
                    FOR (  )          AGAINST (  )         ABSTAIN (  )
 
Item 2 -- Proposal to amend the Certificate of Incorporation of the Company to
          eliminate, upon the occurrence of certain events, the requirements
          that certain transactions by the Company with beneficial holders of
          10% or more of the Company's outstanding shares of capital stock be
          approved by the holders of at least 80% of the Company's outstanding
          shares of capital stock, voting together as a single class.
 
                    FOR (  )          AGAINST (  )         ABSTAIN (  )
 
Item 3 -- ELECTION OF DIRECTORS:
          Nominees: John J. McKetta, Charles F. Luce, Stewart G. Nagler and 
          Arthur Spitzer
                   FOR (  )                       WITHHELD FOR ALL (  )  

INSTRUCTIONS: To withhold authority to vote for any individual nominee, give
that nominee's name to the operator.
 
Item 4 -- Proposal to approve the executive long-term incentive plan of the
          Company.
 
                    FOR (  )          AGAINST (  )         ABSTAIN (  )
 
Item 5 -- Proposal to ratify the appointment of Deloitte & Touche as the
          Company's independent auditors for 1993.
 
                    FOR (  )          AGAINST (  )         ABSTAIN (  )
 
Item 6 -- To transact such other business as may properly come before the
          meeting or any adjournment thereof.
 
    ALL AS MORE PARTICULARLY DESCRIBED IN THE PROXY STATEMENT, PROSPECTUS AND
CONSENT SOLICITATION DATED JANUARY 3, 1994, RELATING TO SUCH MEETING, RECEIPT OF
WHICH IS HEREBY ACKNOWLEDGED.
 

    
    PREFERRED             TESORO PETROLEUM CORPORATION             PREFERRED
 
          PROXY -- ANNUAL MEETING OF STOCKHOLDERS -- FEBRUARY 9, 1994
 
          THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
 
    The undersigned stockholder of Tesoro Petroleum Corporation (the 'Company')
hereby appoints Bruce A. Smith and James C. Reed, Jr., or either of them,
proxies of the undersigned with full power of substitution to vote at the Annual
Meeting of Stockholders of the Company to be held on Wednesday, February 9,
1994, at 10:00 a.m., New York City time, at The Hotel Intercontinental, 111 East
48th Street, New York, New York, and at any adjournment thereof, the number of
votes which the undersigned would be entitled to cast if personally present:
 
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL 1, FOR PROPOSAL 2, FOR THE NOMINEES LISTED IN PROPOSAL 3, FOR
PROPOSAL 4 AND FOR PROPOSAL 5.
 
    Item 1 -- Proposal to amend the Certificate of Incorporation of the Company
              to (i) give effect to the reclassification of the $2.16 Preferred
              Stock into Common Stock, (ii) eliminate staggered terms of
              directors and (iii) require, in the absence of the approval of
              66 2/3% of the disinterested directors, the affirmative vote of
              the holders of not less than 80% of the Company's outstanding
              shares of capital stock, voting together as a single class, to
              amend, in a manner adverse to the Company, certain agreements
              between the Company and MetLife Louisiana upon consummation of the
              reclassification.
 
          For (  )              AGAINST (  )             ABSTAIN (  )
 
    Item 2 -- Proposal to amend the Certificate of Incorporation of the Company
              to eliminate, upon the occurrence of certain events, the
              requirement that certain transactions by the Company with
              beneficial holders of 10% or more of the Company's outstanding
              shares of capital stock be approved by the holders of at least 80%
              of the Company's outstanding shares of capital stock, voting
              togeher as a single class.
 
          For (  )              AGAINST (  )             ABSTAIN (  )
 
    Item 3 -- ELECTION OF DIRECTORS
            Nominees: John J. McKetta, Charles F. Luce, Stewart G. Nagler and
            Arthur Spitzer
 
          For (  )          WITHHELD FOR ALL (  )
 
    INSTRUCTIONS: To withhold authority to vote for any Individual nominee, give
that nominee's name to the operator.
 
    Item 4 -- Proposal to approve the executive long-term incentive plan of the
              Company.
 
          For (  )              AGAINST (  )             ABSTAIN (  )
 
    Item 5 -- Proposal to ratify the appointment of Deloitte & Touche as the
              Company's Independent auditors for 1993.
 
          For (  )              AGAINST (  )             ABSTAIN (  )
 
    Item 6 -- To transact such other business as may properly come before the
meeting or any adjournment thereof.
 
ALL AS MORE PARTICULARLY DESCRIBED IN THE PROXY STATEMENT, PROSPECTUS AND
CONSENT SOLICITATION DATED JANUARY 3, 1994, RELATING TO SUCH MEETING, RECEIPT OF
WHICH IS HEREBY ACKNOWLEDGED.