press release

Unocal begins first oil production from deepwater West Seno project offshore Indonesia

El Segundo, Calif., August 20, 2003 Unocal Corporation (NYSE: UCL) today said that its Unocal Makassar, Ltd., subsidiary has begun oil production from Phase 1 of the company's deepwater West Seno project offshore East Kalimantan, Indonesia.

West Seno is the first deepwater oil and gas project in Indonesia.

Current production from West Seno is 14,000 barrels of oil per day (BOPD) and 18 MMcf per day of gas from the first four wells put on production. The fifth well will be put on production within a week, and should bring production to over 17,000 BOPD. Gross production from Phase 1 is expected to reach 35,000-40,000 BOPD by the end of 2003 as additional wells are completed, with additional production expected in 2004 as development drilling continues.

Daily production is expected to peak at 60,000 barrels (8,220 metric tonnes) of oil and 150 million cubic feet (4.2 million cubic meters) of gas per day by year-end 2005 with the completion of the Phase 2 development at West Seno.

Unocal Makassar expects to ultimately recover 210 to 320 million barrels (29 to 44 million metric tonnes) of oil-equivalent from the West Seno field.

Unocal's growth inventory

"Phase 1 of the West Seno project is the first of a growing inventory of significant developments and projects moving toward commercialization and coming on line over the next few years, fueling the company's near- and medium-term growth," said Charles R. Williamson, Unocal chairman and chief executive officer.

The company's inventory of growth projects include phases 1-2-3 of the Azerbaijan International Operating Company (AIOC) crude oil development in the Caspian Sea; Mad Dog, Trident and K2 crude oil developments in the deepwater Gulf of Mexico; South Kenai Gas in Alaska; Ranggas and Merah Besar oil and gas developments in deepwater Indonesia; Arthit gas development in Thailand; Xihu Trough gas development and exploration in China and Moulavi Bazar gas field development in Bangladesh.

"These growth projects are all in addition to the other huge natural gas resources the company has discovered in Indonesia, Thailand, Vietnam and Bangladesh," Williamson said.

West Seno benefits to Indonesia

"West Seno will generate significant benefits for Indonesia," said Brian W. G. Marcotte, president of Unocal Indonesia Company. "The project will generate more than US$1 billion in revenues and taxes over the project life, create jobs, expand opportunities for local businesses, add new oil production to replace declining output from older Indonesian fields, and encourage additional deepwater investments in the energy sector. First oil from West Seno reached the Santan Onshore Terminal on August 17, Indonesia Independence Day."

Field development details

Unocal Makassar is developing West Seno in two phases with two tension leg platforms (TLP) and a floating production unit (FPU). Phase 1 includes 28 development wells to recover resources in the northern section of the West Seno field. The TLP supports the 28 development wells and a tender-assist drilling rig. This is the first application of a tender-assist drilling rig in a deepwater environment. The TLP is linked to the nearby FPU where the produced oil and gas is processed to sales quality.

Phase 2 will include a second TLP and up to 24 additional development wells on the field's southern section. Production from Phase 2 is expected to begin in 2005.

West Seno, located in the Makassar Strait production sharing contract (PSC) area, was discovered by Unocal in 1998. The field lies about 118 miles (190 kilometers) northeast of Balikpapan in water depths of approximately 3,200 feet (975 meters).

Unocal Makassar operates the PSC and has a 90-percent working interest. Pertamina Upstream, a unit of the state-owned oil and gas company, holds the remaining interest.

Unocal has recorded several potentially commercial deepwater discoveries offshore East Kalimantan that are expected to come on line in the next several years. These discoveries also include significant gas resources that could supply as much as 40 percent of the needs of the Bontang plant, the world's largest LNG facility.

This news release contains certain forward-looking statements about Unocal's expected production rates, recoverable resources, future development plans and capital expenditures. 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 2002 Annual Report on Form 10-K and subsequent reports filed with the Securities and Exchange Commission. U.S. investors are urged to consider closely the disclosure in Unocal's 2002 Annual Report on 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 or from the SEC by calling 800-SEC-0330. The reports are also available on the Unocal web site, www.unocal.com.

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: August 2003