press release

Unocal begins partial redemption of trust convertible preferred securities

El Segundo, Calif., Aug. 18, 2004 - Unocal Corporation (NYSE: UCL) today said that Unocal Capital Trust has given notice to the Bank of New York (as trustee) to redeem one-half of Unocal's outstanding 6-1/4% Trust Convertible Preferred Securities.

The 5.2 million shares to be redeemed have an aggregate liquidation value of about $261 million. These securities will be redeemed on Sept. 20, 2004, with a redemption premium of 1.25 percent. Including the premium and accrued and unpaid distributions, the total cost of the redemption program is $265 million.

The partial redemption will eliminate the potential dilution of up to 6.1 million common shares (based on the conversion rate to common stock for the preferred securities). The redemption of the securities is expected to reduce Unocal's annual interest expense by more than $16 million.

The redemption of the trust convertible preferred securities is one aspect of a three-part cash expenditure program of up to $511 million that Unocal announced late last month. The other aspects included a $100 million voluntary contribution to Unocal's U.S. pension plan, which has been completed, and the repurchase of up to $150 million of Unocal's common stock. On Aug. 4, Unocal announced that it had begun common stock repurchases under that program.

If completed as expected, the common stock and preferred repurchase programs would reduce Unocal's diluted share count by about 10 million shares, or nearly 4 percent of the diluted share balance as of Aug. 13, 2004.

This news release contains forward-looking statements about matters such as the consummation, amounts, timing, structure and effect on Unocal's diluted share balance of common and preferred stock repurchase programs; and reductions in future interest expense. Although these statements are based upon Unocal's current expectations and beliefs, they are subject to known and unknown risks and uncertainties that could cause actual results and outcomes to differ materially from those described in, or implied by, the forward-looking statements, including market conditions for the company's securities; any future issuances of additional securities; changes in commodity prices; the extent of the company's operating cash flow and other capital resources available to fund its capital expenditures; and other factors discussed in Unocal's 2003 Annual Report on Form 10-K, as amended, and subsequent reports filed by Unocal with the Securities and Exchange Commission (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. Unocal undertakes no obligation to update the forward-looking statements in this news release to reflect future events or circumstances. All such statements are expressly qualified in their entirety by this cautionary statement.

Updated: August 2004