press release

Unocal CEO Williamson reaffirms investment, stresses value of natural gas to Thailand

Bangkok, Thailand, June 27, 2001 -- In a courtesy call on Thailand Prime Minister Thaksin Shinawatra today, Charles R. Williamson, Unocal Corporation's chief executive officer, pledged strong continuing investment and reinvestment in Thailand and stressed the value brought to Thailand by natural gas.

Williamson stressed the tremendous value brought by natural gas, which is significantly less expensive than fuel oil, thus helping consumers avert higher electricity charges. In 2000, on average, natural gas cost about 40 percent less than fuel oil, helping Thailand reduce its fuel bills significantly. In addition, production of indigenous gas brought US$101 million (4,000 million baht) in royalties and US$165 million (7,070 million baht) in taxes to the country.

In addition, Williamson stressed Unocal's commitment to work with the Petroleum Authority of Thailand (PTT) to find solutions to rising costs of energy. "Unocal has been working in Thailand for the past 40 years. We are ready to help find win-win ways to help alleviate short-term impact (from the rising costs)," Williamson said.

Unocal has increased this year's investment by US$42 million (1,890 million baht) to keep up with the increased gas requirements from PTT. For the first five months of 2001, the total amount of gas supplied by Unocal averaged over 1,110 million cubic feet a day.

"Unocal is deeply committed to enhancing Thailand's energy self-sufficiency, and we are continually reinvesting here to keep the low-cost natural gas flowing," Williamson said. He noted that Unocal Thailand has dramatically increased its drilling activity to meet the increased natural gas demand.

Williamson said the investment by Unocal and its co-concessionaires for 2001 alone is expected to total US$540 million (about 24,300 million baht). Over the next ten years, the group's spending is estimated to be US$4,300 million (193,500 million baht).

The Unocal CEO said Unocal Thailand's two major projects this year are the company's crude oil development project (the first by Unocal in the Kingdom) and a local petroleum construction alliance. Both are designed to help the Kingdom lower its dependence on energy imports and create employment for Thais.

Unocal is gearing up to bring crude oil from the Gulf of Thailand to the local market later this year at an initial rate of 3,500 barrels per day (b/d), increasing to 15,000 b/d in 2002. This increases Thailand's indigenous crude oil supply by about 25 percent, thus saving foreign exchange needed to buy crude oil.

The crude oil development project will utilize production platforms fabricated in Thailand by CUEL, formed in 2000 by Clough Thailand and Unithai Shipyard and Engineering. Unocal's business alliance with CUEL has created over 500 new jobs for small and medium enterprises (SME's). "Unocal's ability to fabricate platforms and other structures not only makes good business sense and accelerates resource development for the country, but it also represents technology transfer to Thais," Williamson said.

In September, the first oil central processing platform (CPP) will be completed at Laem Chabang on the Eastern Seaboard. This will be Thailand's first CPP locally fabricated.

For the longer term, Williamson also highlighted the plentiful gas resources yet to be developed. These included the additional reserves in Unocal's present concessions, the Arthit petroleum development project in the former Vietnam-Thailand overlap areas, operated by PTT Exploration and Production Public Company Limited, and the Cambodia-Thailand overlap area. Williamson said that Unocal, which has four concession blocks in the overlap area, is prepared to start work once a resolution is reached. A memorandum of understanding was recently signed between the Cambodian and the Thai governments to begin the signed between the Cambodian and the Thai governments to begin the process of resolving the differences.

Updated: June 2001