Unocal begins development drilling from TLP in West Seno, the first Indonesia deepwater oil, gas field
El Segundo, Calif., March 19, 2003 - Unocal Corporation (NYSE: UCL) today said that its Unocal Makassar, Ltd., subsidiary, as a production-sharing contractor to BPMIGAS, commenced drilling operations on Phase One of its deepwater West Seno field offshore East Kalimantan, Indonesia.
The first well of a 28-well development program spudded from the Tension-Leg Platform, TLP-A, located in the Makassar Strait in approximately 3,200 feet (975 meters) of water.
"This is a significant milestone towards first deepwater production for Unocal and Indonesia," said Brian W. G. Marcotte, president of Unocal Makassar, Ltd. "We have successfully installed the first TLP in Southeast Asia and will be drilling development wells prior to the arrival of our Floating Production Unit (FPU). All submarine pipelines, deepwater mooring systems, and onshore facilities are complete and awaiting the arrival of the FPU."
The FPU, designed to process 60,000 barrels of oil per day (BOPD) and 150 million cubic feet of natural gas per day (MMCFGPD), is currently undergoing final construction and yard commissioning in Ulsan, Korea. The unit will be towed to the field site in Indonesia in late April.
Offshore installation of the FPU to its pre-laid deepwater moorings and hookup to the TLP and export pipelines should be completed by mid-May. Offshore commissioning and startup activities will take another 30 days.
The field is scheduled to come on production in mid-June 2003. Initial production of 12,000 to 15,000 BOPD is expected from the first five pre-drilled development wells. Production is expected to steadily increase to 35,000 to 40,000 BOPD by year-end 2003 and continue ramping up in 2004 as the remainder of the Phase One drilling program is executed.
Phase Two, which is expected to come on line about 2 years after Phase One production commences, will include a second TLP, infield pipelines and up to 24 additional development wells. Daily production is targeted to reach 60,000 barrels of oil and 150 MMCFG in 2005 following the second phase development. Ultimate recovery from the field is expected to be 210 to 320 million barrels-of-oil equivalent.
Unocal Makassar, Ltd., is operator of the Makassar Strait Production Sharing Contract (PSC) area. It holds a 90-percent working interest in the PSC, with Pertamina Upstream holding the remaining 10-percent working interest.
About Unocal Corporation
Unocal is one of the world's leading independent natural gas and crude oil exploration and production companies, with principal operations in North America and Asia.
This news release contains certain forward-looking statements about the timing and volume of expected production, and the volume of ultimate recovery. Ultimate recovery is a speculative estimate (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 amended 2001 Form 10-K/A and other reports filed with the U.S. Securities and Exchange Commission. Unocal undertakes no obligation to update the information in this news release.
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 "ultimate recovery," that the SEC's guidelines strictly prohibit Unocal from including in its filings with the SEC. U.S. investors are urged to consider closely the disclosure in Unocal's amended 2001 Form 10-K/A (SEC File No. 1-8483). Copies of the Unocal's SEC filings are available from the company by calling 800-252-2233. The reports are also available on the Unocal web site, www.unocal.com. You can also obtain this form from the SEC by calling 800-SEC-0330.
Under the terms of the PSCs, Unocal Indonesia Company and its affiliates, including Unocal Makassar, Ltd., as contractors to Pertamina, the Indonesia national oil company, are entitled to varying shares of the oil and gas produced from commercial discoveries.
Updated: March 2003