press release

Unocal adds natgas production from Pailin field; Gulf of Thailand gross production to average 1 BCFD for 4Q 1999

El Segundo, Calif., Aug. 24, 1999 -- Unocal Corporation today announced the start of natural gas production from the Pailin field in the Gulf of Thailand.

Gross gas production from the field is expected to reach 165 million cubic feet a day (mmcfd) in the fourth quarter. A second phase, which would add another 165 mmcfd, is scheduled to come on stream in mid-2002.

With the addition of Pailin, gross natural gas production from the 12 fields operated by Unocal Thailand, Ltd., in the Gulf of Thailand is expected to average about 1 billion cubic feet per day in the fourth quarter.

The company estimates gross recoverable gas in the Pailin field at about two trillion cubic feet.

Unocal Thailand, Ltd., is operator of the Pailin field and holds a 35 percent working interest. Co-venturers include PTT Exploration and Production (PTTEP) Public Company Limited (45%), Amerada Hess Exploration (Thailand) Co., Ltd. (15%), and MOECO Thai Oil Development Co., Ltd. (an affiliate of Mitsui Oil Exploration, 5%).

Pailin is Unocal Thailand's largest and most complex single project ever undertaken and employs the latest environmental technologies. When fully developed, the field is expected to contain 30 wellhead platforms and two central processing platforms. Estimated total cost of the development to date is US$375 million.

Gas from the Pailin field is sold to the Petroleum Authority of Thailand (PTT) under a 30-year gas sales agreement signed in 1996. "This extraordinarily quick field development is a result of the excellent cooperation between PTT and the concessionaires, and certainly from sound project management," said Randy Howard, president, Unocal Thailand.

"With Pailin on stream, additional gas is available to generate low-cost electricity for the Kingdom," Howard said. "Utilizing indigenous natural gas from projects such as Pailin in new, highly efficient gas turbines reduces the cost of electricity by 20 to 30 percent, compared with electricity generated using high-priced fuel oil or imported coal." More than half of the electricity generated today in Thailand comes from power plants fired with natural gas produced by Unocal and other companies.

PTT recently completed a pipeline to connect Pailin with the main Erawan - Rayong gas pipeline. Natural gas from Pailin is being delivered into PTT's network about two months before the scheduled startup of Thailand's first independent power plant (IPP), operated by Independent Power (Thailand) Company Limited, that will supply electricity to the Electricity Generating Authority of Thailand (EGAT) national grid. The 700-megawatt, combined-cycle plant in Sri Racha, Chon Buri, will be powered by natural gas. Unocal has a 24 percent interest in Independent Power (Thailand).

"After 18 years of gas and condensate production, Unocal continues to discover and develop natural gas resources that will serve Thailand's needs far into the future and help fuel the Kingdom's economic recovery," Howard added.

Discovered in 1990, the Pailin field lies 160 kilometers east of Nakhon Si Thammarat province on the southern coast. The field is located in Concession Block B12/27, which encompasses an area of 770,000 acres (3,118 square kilometers).

Unocal Thailand is a wholly owned subsidiary of Unocal Corporation, a leading independent oil and gas exploration and production company with pipeline and power plant development projects worldwide. In 1998, Unocal Thailand's gross daily sales volume averaged 983 mmcf of gas and nearly 34,000 barrels of condensate. To date this year, gross daily sales volume averaged 973 mmcf of gas and 32,000 barrels of condensate.

Forward looking statements and estimates regarding exploration and production activities and costs, reserves, future production levels, and capital expenditures in this news release are based on assumptions about market, competitive, regulatory, environmental, operational and other considerations. Actual results could differ materially as a result of factors discussed in Unocal's 1998 Form 10-K report filed with the U.S. Securities and Exchange Commission.

Updated: August 1999