Unocal, PTT agree to extend gas sales contracts and increase minimum volumes
El Segundo, Calif., Oct. 17, 2003 - Unocal Corporation (NYSE: UCL) today said its Unocal Thailand, Ltd., subsidiary has signed a heads of agreement with PTT Public Co., Ltd. (PTT), which is intended to amend and extend two of Unocal's gas sales contracts, while increasing contracted sales volume from 740 million cubic feet per day (mmcfd) to 1,240 mmcfd.
Unocal Thailand and its co-venturers will now move forward to finalize the terms and conditions for the sales contracts amendments and extension with PTT. The agreement would provide for a long-term extension of the Erawan and Unocal 2/3 contracts, which cover all of Unocal's natural gas and condensate production in the Gulf of Thailand except for the Pailin field.
"We are prepared to make the large investments in further exploration drilling, production facilities, wellhead platforms and development drilling that will be required to deliver the increased gas volumes," said Randy Howard, president of Unocal Thailand.
Howard said that Unocal plans to invest several billion U.S. dollars over the life of the contracts starting in 2004 to provide the additional gas supplies need to meet Thailand's energy needs. "We will finalize our project capital requirements once final terms and conditions have been signed," he said.
The agreement would increase contract volumes from the current 740 mmcfd to 850 mmcfd with the completion of PTT's third transmission pipeline in 2006, and further increase to 1,240 mmcfd to meet the market demand in subsequent years.
"This agreement marks a key milestone in the Kingdom of Thailand's continuing effort to secure a reliable, long-term domestic supply of natural gas over the next two decades to meet the country's growing demand," Howard said. "It also supports the government's plan to encourage additional investment for infrastructure to develop additional energy resources in the Gulf of Thailand."
Unocal is operator and holds a 64 percent working interest net of royalty. Co-venturers are Mitsui Oil Exploration Co., Ltd. (MOECO) and PTT Exploration and Production Public Co., Ltd. (PTTEP).
Earlier this month Unocal signed an amendment to the sales contracts covering natural gas production from the Pailin field offshore Thailand. That agreement increased the contract quantity by nearly 12 percent to 368 mmcfd.
About Unocal Corporation and Unocal Thailand
Unocal Thailand is a wholly owned subsidiary of Unocal Corporation, one of the world's leading independent natural gas and crude oil exploration and production companies. Unocal's principal oil and gas activities are in North America and Asia.
This news release contains certain forward-looking statements about Unocal's expected business transactions, contract rates, 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.
Updated: October 2003