Production begins at Central Azeri in the Caspian Sea
Sugar Land, Texas, Feb. 14, 2005 - Unocal Corporation (NYSE: UCL) today announced start-up of oil production from the Central Azeri development, part of the Azeri-Chirag-Gunashli (ACG) field, in the Azerbaijan sector of the Caspian Sea.
The new platform, designed to process up to 420,000 barrels of oil per day, is the second of five production platforms scheduled to be commissioned through 2008 as part of the full-scale development of the ACG field.
Unocal holds a 10.3 percent ownership interest in the ACG Production Sharing Agreement (PSA). BP serves as operator with 34.1 percent; other parties to the PSA are SOCAR (10%), INPEX (10%), Statoil (8.6%), ExxonMobil (8%), TPAO (6.8%t), Devon (5.6%), Itochu (3.9%) and Amerada Hess (2.7%).
Located in approximately 420 feet of water 62 miles east of Baku, Central Azeri production began from the first of 10 pre-drilled production wells on Feb. 12. The produced oil will initially fill the new pipelines to shore and newly expanded shore facilities during February. First export of oil is expected in March 2005. Production is expected to increase through 2005 as the other pre-drilled wells are brought online, prior to further platform drilling and production ramp up over the coming years.
"With the start of production from our Central Azeri investment, Unocal takes a significant step forward in delivering results from a strong slate of major developments under way worldwide," said Joe Bryant, Unocal president and chief operating officer. "Along with other worldwide development projects, Central Azeri production is expected to add significantly to Unocal's 2005 production and financial performance."
Unocal's net share of production through the new platform is expected to ramp up to between 10,000 to 13,000 BOPD by the fourth quarter 2005, nearly doubling the company's fourth quarter 2004 net production from the ACG fields.
Bryant said that Unocal is proud of the work of the BP-led partnership, the Azeri government, contractors, suppliers and the 6,000 Azeri citizens employed in the construction and operations, all of whose dedicated effort contributed toward the success of the project.
The Azeri-Chirag-Gunashli field was discovered by the Azerbaijani State Oil Company in the 1970s. An international consortium entered an agreement in 1994 to delineate and develop the three fields in phases. Production from Chirag (known as the Early Oil Project) began in 1997 and with current gross production at approximately 150,000 BOPD. The Central Azeri platform start-up announced today constitutes Phase 1 of the incremental field development. Successive phases include West Azeri and East Azeri as Phase 2, scheduled to come on stream in 2006 and 2007 respectively, with Phase 3, Deepwater Gunashli, now sanctioned and expected to begin production in 2008. Once complete, the combined development will consist of five production platforms and is expected to produce more than 1 million BOPD by 2009.
About Unocal Corporation
Unocal is one of the world's leading independent natural gas and crude oil exploration and production companies. The company's principal oil and gas activities are in Asia and North America.
This news release contains forward-looking statements about matters such as production rates and timing and development and other plans for future operations. Although these statements are based upon Unocal's current expectations and beliefs, they are subject to known and unknown risks and uncertainties that could cause actual results and outcomes to differ materially from those described in, or implied by, the forward-looking statements, including volatility in commodity prices; the ability of Unocal and third party operators to develop and produce deepwater and other projects in a timely and cost-effective manner; the accuracy of Unocal's estimates and judgments regarding hydrocarbon resources and formations and reservoir performance; operational risks inherent in the development and production of oil and gas; the impact of environmental laws, permitting and licensing requirements and other regulations; international and domestic political and economic factors; and other factors discussed in Unocal's 2003 Annual Report on Form 10-K, as amended, and subsequent reports filed by Unocal with the U.S. Securities and Exchange Commission (SEC).
Copies of Unocal's SEC filings are available from Unocal by calling 800-252-2233 or from the SEC by calling 800-SEC-0330. The reports are also available on the Unocal web site, www.unocal.com. Unocal undertakes no obligation to update the forward-looking statements in this news release to reflect future events or circumstances. All such statements are expressly qualified by this cautionary statement, which is provided pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
Updated: February 2005