press release

Unocal Global Trade reports increased revenues and earnings, continued high margins from oil and gas trading in 1997

Houston, Texas, Feb. 10, 1998 -- Unocal Global Trade, the energy trading and marketing unit of Unocal Corporation, today said that preliminary pretax earnings from crude oil and natural gas trading in 1997 rose 6 percent to $27 million. Total revenues were $3.45 billion, up nearly 7 percent from a year ago.

In 1996, Unocal Global Trade's activities generated pretax earnings of $26 million on revenues of $3.24 billion.

Global Trade's gross margins on total natural gas volumes in 1997 averaged 3.8 cents per million Btu (mmBtu) above the industry-standard IFERC index. This was in spite of a market-wide drop of approximately one cent in the supply security premium for non-interruptible 30-day fixed-price gas commitments and a higher share of gas from non-affiliated sources. In 1997, about 22 percent of the gas traded came from non-affiliated sources, compared with only 6 percent in 1996. Unocal Global Trade averaged 1.3 billion cubic feet of gas traded daily in 1997. In crude oil trading, Unocal Global Trade reported an average gross margin of 40 cents per barrel above the applicable indices, a 14 percent increase from its 1996 average margin.

"This is the second consecutive year in which Unocal Global Trade has achieved high margins through a focus on maximizing value instead of merely moving high volumes," said William T. Wilson, president of Unocal Global Trade. "As we become more active in providing trading and marketing outsourcing services for other producers, we expect to maintain well-above-average margins and deliver significant value improvement to our customers."

Unocal Global Trade was formed in September 1997 to consolidate Unocal's worldwide crude oil and natural gas commodity trading activities. In addition to trading and marketing Unocal's crude oil and natural gas production, Unocal Global Trade provides outsourced marketing services to Unocal's joint venture partners, royalty owners, and other unaffiliated oil and gas producers. Unocal Global Trade is headquartered in Sugar Land, Texas, with additional trading offices in Singapore and Calgary.

The results from Unocal Global Trade's activities were incorporated in the published financial results of Unocal's exploration and production business segments for 1997 and prior. Beginning with the 1997 annual report, Unocal Global Trade's results will be shown separately in Unocal Corporation's financial statements.

Updated: February 1998