press release

Unocal acquires new Ganal production-sharing contract in East Kalimantan

El Segundo, Calif., Feb. 24, 1998 - Unocal Corporation today said its Unocal Ganal, Ltd., subsidiary has signed a production-sharing contract (PSC) with Pertamina, the Indonesian national oil company, for a new area offshore East Kalimantan, Indonesia.

Map of Mahakam Delta area

The new PSC area, named Ganal, lies in the Mahakam Delta area, east of the southern portion of the Unocal/Mobil Makassar Strait PSC. Ganal covers nearly 1.2 million acres (5,050 square kilometers) with water depths ranging from 2,400 feet (730 meters) to 6,600 feet (2,000 meters).

Unocal Ganal is operator of the PSC area and holds a 90 percent working interest. P.T. Nusamba Energy Pratama holds the remaining 10 percent.

Ganal has been designated a "frontier area," qualifying Unocal and Nusamba for a 35 percent aftertax share of oil production. This compares with Unocal's current 15 percent aftertax share of oil production from the older East Kalimantan contract area.

"The Ganal area is a natural extension and continuation of the deepwater exploration program that Unocal initiated in the Mahakam Delta last year", said Timothy C. Lauer, president and managing director of Unocal Indonesia Company.

Lauer said that acquisition of 2-D seismic data on the Ganal area is under way, with the first exploration well anticipated in 1999.

Ganal is the fourth new production sharing contract area that Unocal has added to its Indonesia portfolio in the past six months. In September 1997, Unocal signed a PSC for the Sesulu area (Unocal, 100% working interest) and acquired a 50 percent working interest in the Makassar Strait PSC (Mobil Makassar, Inc., holds the remaining 50% interest). Unocal and its co-venturers signed a contract for the Rapak PSC in December 1997. Unocal has a 90 percent working interest in Rapak, but a 30 percent working interest has been offered to a multinational company.

In total, Unocal holds varying interests in more than 5.1 million acres (20,700 square kilometers) offshore East Kalimantan.

Unocal Indonesia Company, under a production-sharing contract with Pertamina, operates nine fields offshore East Kalimantan. Unocal holds a 100 percent working interest in eight of these fields - Santan, Serang, Sepinggan, Melahin, Kerindingan, Seguni, Pantai and Yakin - and a 50 percent working interest in the supergiant Attaka Field. Current gross daily production is approximately 86,000 barrels of oil and 330 million cubic feet of gas. All of the production is in water depths of less than 300 feet (100 meters).

Unocal is a leading global energy resource and project development company, with major oil and gas exploration and production activities in Asia, the U.S. Gulf of Mexico, and Latin America. The company maintains twin headquarters in California and Malaysia, and has major offices in Singapore, Jakarta, Bangkok, Sugar Land, Texas, and Lafayette, Louisiana.

Forward-looking statements, including estimates of future exploration and development activities in this news release are based on assumptions concerning geology, drilling success, costs, discount rates, market conditions, competition, and other considerations. Actual results could differ materially.

Updated: February 1998