press release

Unocal starts production from new oil and gas field in East Kalimantan

Sugar Land, Tex., June 5, 1996 - Unocal Corporation said today that its Unocal Indonesia Company subsidiary had started production from the new Seguni oil and gas field in the Mahakam Delta area offshore East Kalimantan, Indonesia.

The Seguni field is currently producing more than 6,700 barrels of oil per day (bopd) and 9 million cubic feet of gas per day (mmcfd), from five completions. The company plans to add two completions later this month, which should increase the field's overall production.

The field was discovered in May 1995 with the successful testing of the Seguni-1 discovery well. The field lies in 105 ft. of water on a separate geologic structure, approximately two miles northwest of Unocal's Sepinggan field.

"We used an innovative structural system designed by our engineers that reduced the lead time needed to bring this new field on line," said Jack W. Schanck, Unocal group vice president for oil and gas operations. "Typically, the design, fabrication, installation and commissioning of a conventional platform in Indonesia takes about three years at significantly higher cost."

Unocal's innovative early production system, the "Stacked Template Structure" (STS), entailed drilling three development wells from the Seguni-1 location, through a series of three stacked templates positioned over the discovery well. Subsequently the upper two templates were elevated and clamped in position at 25 ft above Mean Sea Level (MSL) and 32 ft below MSL, respectively. The lower template was clamped at the mud line. The templates and well conductors form a small trussed tripod platform. Unocal has applied for patents on the STS system.

The platform is connected by two pipelines to existing facilities and pipelines at the nearby Sepinggan field.

"By using this new system, our capital costs for developing the Seguni field have been only a fraction of the cost of a conventional production system," Schanck said. Unocal said that Seguni development, excluding wells, has been about $4 million. This could be compared with $10 million for an equivalent subsea system or $17 million for a conventional platform-supported production system.

The full extent of the Seguni field is not yet defined. The company is currently acquiring additional 3-D seismic to define the northern limits of the field, and plans to drill several delineation wells on the Seguni structure in 1996.

Unocal is planning a very aggressive exploration program in their Mahakam Delta acreage during 1996. By using the STS system, the company will be able to develop rapidly the new fields that result from this exploration program.

Unocal Indonesia Company, under a production sharing contract with Pertamina, the Indonesian national oil company, operates seven fields offshore East Kalimantan. Unocal holds a 100 percent interest in six of these fields -- Seguni, Serang, Sepinggan, Melahin, Kerindingan and Yakin -- and a 50 percent interest in the supergiant Attaka field.

Updated: June 1996