press release

Unocal announces discovery of significant natural gas reservoir on Alaska's Kenai Peninsula

Anchorage, Alaska, Jan. 22, 2002 -- Unocal Corporation (NYSE: UCL) today announced the discovery of a new natural gas reservoir on Alaska's Kenai Peninsula.

The Grassim Oskolkoff #1 (GO#1) well, the first exploration well drilled under a joint operating agreement between Unocal and Marathon in the Ninilchik Exploration Unit, indicates significant natural gas accumulations. GO#1 is located 35 miles south of Kenai, Alaska, on the Kenai Peninsula.

A 39-foot interval in the Miocene formation yielded restricted flow rates of up to 11.2 million cubic feet of gas per day. The zone tested was at 9,822 feet. The well was drilled to a total depth of 11,600 feet. Several significant untested intervals exist elsewhere in the well. Exploration efforts also continue at several other wells in the unit.

Unocal holds a 40-percent working interest in the well and the 25,000-acre Ninilchik exploratory unit. Marathon Oil Company is operator and holds the remaining interest.

"We are pleased with the initial results of our south Kenai gas exploration program and we look forward to working with Marathon Oil to fully appraise the potential of the Ninilchik structure," said Chuck Pierce, vice president of Unocal Alaska said.

Pierce said that Unocal has begun a separate three-well exploration program on the southern Kenai Peninsula. Unocal anticipates it will complete this initial program by May 2002.

Unocal has acquired a total position in excess of 80,000 net acres. The company believes the net unrisked resource potential of the Ninilchik Unit and the additional prospects Unocal plans to test by mid-2002 could be between 100 and 600 billion cubic feet. By the end of 2002, Unocal expects to have completed and tested eight wells on the trend -- five wells in the Ninilchik Unit, and three wells on the other Unocal prospects.

"These wells have major implications for natural gas development of the southern Kenai Peninsula. Based on the results of the Marathon- and Unocal-operated programs, we expect to have sufficient gas resources to support construction of the proposed Kenai-Kachemak pipeline," Pierce said.

Unocal and Marathon have formed Kenai Kachemak Pipeline LLC to develop a natural gas pipeline that would connect the new producing area with the existing south central Alaska pipeline system. Upon completion of the pipeline, newly discovered resources would serve commercial and utility markets in south central Alaska. First production is anticipated to occur in late 2003.

Unocal has signed a contract to sell up to 450 BCF of natural gas to ENSTAR Natural Gas Company beginning in January 2004. ENSTAR distributes natural gas to Anchorage, the Matanuska-Susitna Valley, and the Kenai Peninsula. The Regulatory Commission of Alaska approved the Unocal-ENSTAR gas contract in December 2001.

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 operations are located in North America (Gulf of Mexico region, Alaska and Canada) and in Asia (Thailand, Myanmar, Indonesia, Bangladesh and Azerbaijan). The company is also pursuing exploration programs in Brazil and West Africa. Unocal is one of the world's largest producers of geothermal energy with operations in the Philippines and Indonesia.

Unocal Alaska operates 10 platforms in the Cook Inlet off the southern Alaska coast and 5 of 11 producing gas fields. Unocal Alaska's average net daily production during 2001 was 105 mmcf of gas and 25,000 barrels of oil.

This news release contains certain forward-looking statements about Unocal's future drilling plans and production levels, resource potential and the results of geological analysis. Resource potential is a speculative estimate of ultimate recovery (including non-proved resource) based on engineering, geophysical, and geological studies and may include market risk. These statements are not guarantees of future performance. The statements are based upon Unocal's current expectations and beliefs and are subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those described in the forward looking statements. Actual results could differ materially as a result of factors discussed in Unocal's 2000 Form 10-K and subsequent reports filed with the Securities and Exchange Commission.

Cautionary Note to U.S. Investors: The U.S. Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. Unocal uses certain terms in this news release, such as "resource potential," that the SEC's guidelines strictly prohibit Unocal from including its filings with the SEC. U.S. investors are urged to consider closely the disclosure in Unocal's 2000 Form 10-K (SEC File No. 1-8483). Copies of the company's SEC filings are available from the company by calling 800-252-2233. The reports are also available on the Unocal web site, You can also obtain this form from the SEC by calling 800-SEC-0330.

Updated: January 2002