press release

Unocal makes significant discovery on first deeper test in Kutei Basin

Success opens up deep oil and gas play across Unocal's significant acreage

El Segundo, Calif., July 23, 2003 - Unocal Corporation (NYSE: UCL) today said its Unocal Ganal, Ltd., subsidiary has made a significant gas-condensate and oil discovery on the deepwater Gehem prospect in the Ganal production-sharing contract area, 3.5 miles (5.6 kilometers) south of the Ranggas field offshore East Kalimantan, Indonesia.

Gehem-1 is the first of a series of exploration wells that are designed to test the prospectivity of deeper, previously untested intervals underlying previous deepwater discoveries offshore East Kalimantan.

The Gehem-1 well encountered 617 feet (188 meters) of net gas and gas-condensate pay and 18 feet (5 meters) of net oil pay. The well was drilled in 5,981 feet (1,823 meters) of water to a total vertical depth of 15,241 feet (4,645 meters). More than 400 feet of the net pay was in a stratigraphic interval that had not been penetrated during drilling in the nearby Ranggas field.

The company said the Gehem structure covers nearly 8,000 acres (32.4 square kilometers) and has the potential for significant oil pay in several zones downdip of the Gehem-1 well and in deeper intervals, which will be tested in subsequent appraisal wells. Well designs for follow-up appraisals on the Gehem prospect will permit tests that are significantly deeper than the initial well, which encountered only moderate pressures even at total depth.

"Gehem-1 is potentially the most significant well we have drilled in the deepwater since the Seno discovery well in 1998 because it opens up a new, deeper oil and gas trend for us across our huge acreage holdings in the deepwater Kutei Basin," said Charles R. Williamson, Unocal chairman and chief executive officer. "Gehem-1 showed us that there is an extremely thick, high-quality hydrocarbon-bearing reservoir at previously untested depths."

Williamson added that the Gehem-1 results significantly increase the prospectivity of the deep oil prospects that are already on Unocal's drilling schedule for 2003 and dramatically expands the company's portfolio of leads and prospects focused on deeper oil and gas.

"Gehem by itself has a number of characteristics that favor early development," Williamson said. "The size of the potential Gehem resource, reservoir quality, potential high condensate yields and location relative to the Bontang liquefied natural gas plant, position Gehem to be a low-cost gas supplier to the plant."

The company said that Gehem has an unrisked resource potential of between 2 and 3 trillion cubic feet of gas equivalent. This does not include additional upside from still deeper horizons. The reservoir has the potential for flowing in excess of 100 million cubic feet of gas per day and 5,000 barrels of condensate per day per well.

The results of the Gehem-1 well indicate possibly significant oil and condensate resource potential in the deeper untested trend underlying the existing Gada, Gula, and Ranggas discoveries. In addition, armed with the information gathered from the Gehem-1 well, the company has already developed a number of new leads and prospects, including Golok (structure directly north of the Gula discovery), Geliga (structure south of the Gada discovery), and Rajalaut (adjacent to Ranggas).

Ranggas appraisal drilling

The company also said that Unocal Rapak, Ltd., successfully completed drilling the Ranggas Selatan-1 appraisal well, extending the Ranggas field to the south on the Rapak production-sharing contract area. The Selatan-1 well was drilled to a true vertical depth of 10,243 feet (3,122 meters), and penetrated 187 feet (57 meters) of net oil pay and 258 feet (79 meters) of net gas pay in several zones of high quality reservoir rock. The well was not planned to penetrate the deep reservoir that was encountered in the Gehem-1 well.

The Selatan-1 well was drilled 1 mile (1.6 kilometers) south of the Ranggas-1 discovery well 5.7 miles (9.2 kilometers) north of the Gehem-1 well. Unocal said it is conducting conceptual engineering studies for the possible development of the Ranggas field. "Extending the Ranggas oil and gas accumulations to the south is an important and positive appraisal step for the field," said Brian W. G. Marcotte, president of Unocal Indonesia Company. "While we are still planning to have the Ranggas project ready for government approval by early next year, the Gehem-1 results have implications for appraising the deeper oil potential at Ranggas and optimizing the development."

Marcotte said the company plans to move Ranggas along while assessing the deep potential and options for co-development with Gehem.

Unocal Ganal is operator of the Ganal PSC area and holds an 80-percent working interest. ENI-Ganal, Limited, a subsidiary of ENI (NYSE: E), holds the remaining 20-percent working interest.

Unocal Rapak is operator of the Rapak PSC area and holds and 80-percent working interest. ENI-Rapak, Limited, a subsidiary of ENI, holds the remaining 20-percent working interest.

About Unocal Corporation

Unocal is one of the world's leading independent natural gas and crude oil exploration and production companies. The company's principal oil and gas activities are in North America and Asia.

This news release contains certain forward-looking statements about Unocal's future development plans, production estimates and resource potential. Resource potential is speculative estimate of ultimate recovery (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 2002 Annual Report on Form 10-K and subsequent reports filed with the Securities and Exchange Commission.

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 the term "resource potential" in this news release, which the SEC's guidelines strictly prohibit Unocal from including its filings with the SEC.

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.

Under the terms of the PSCs, Unocal Indonesia Company and its affiliates, including Unocal Rapak, Ltd., and Unocal Ganal, 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: July 2003