press release

Unocal reports year-end 2002 oil and gas reserves of 1.77 billion BOE

El Segundo, Calif., Jan. 28, 2003 - Unocal Corporation (NYSE: UCL) today reported preliminary 2002 proved oil and gas reserve estimates of 1.77 billion barrels-of-oil-equivalent (BOE), compared with 1.82 billion BOE at the end of 2001. The year-end reserves estimates reflect additions of 140 million BOE from discoveries and extensions and a net 89 million BOE from performance-related revisions and improved recovery. These were offset partially by a net reduction of 84 million BOE in price-related revisions.

The price-related revisions included 28 million BOE in upward revisions, primarily in onshore U.S. fields, which were offset by 112 million BOE of negative price-related revisions in fields covered by Unocal's international production-sharing contracts (PSCs). Including the net effect of price revisions, preliminary reserve replacement was 75 percent, with a finding and development (F&D) cost of $11.63 per BOE and a finding, development and acquisition (FD&A) cost of $12.43 per BOE.

Excluding the impact of all price-related revisions, reserve replacement would have been 123 percent, with an F&D cost of $7.34 per BOE and an FD&A cost of $7.99 per BOE. Excluding the effect of PSC price-related revisions alone, Unocal's reserve replacement would have been 139 percent, with an F&D cost of $6.54 per BOE and an FD&A cost of $7.14 per BOE.

Under foreign PSC arrangements in Indonesia, Myanmar, Azerbaijan (AIOC), Bangladesh, and the Democratic Republic of the Congo, net entitlement reserves to the contractor (Unocal) increase as oil and/or gas prices decline and decrease when they rise. Benchmark crude oil prices rose from $19.71 per barrel at year-end 2001 to $31.23 per barrel at the end of 2002. Comparable price increases in international operations resulted in the 112 million BOE negative revisions in Unocal's reserves under PSCs because fewer equivalent barrels are required to reimburse the company for its costs.

"All of our geographic segments added reserves through the drillbit and operations in 2002," said Charles R. Williamson, Unocal chairman and chief executive officer. "Overall, the company added more than 228 million BOE through discoveries and extensions, improved recovery and performance-related revisions. These represented 132 percent of the company's production in 2002. While the overall numbers were dragged down by the 112 million BOE in negative price-related PSC revisions, these revisions reflected a favorable commodity price environment, which is very positive for the company. In addition, those reserves would come back onto the ledger if commodity prices decline, because PSCs serve as a natural hedge in periods of lower commodity prices."

Williamson noted that year-end 2002 proved reserves did not include any bookings from several projects that are closing in on commercial sanction and could positively impact reserve quantities in 2003 and beyond.

"We did not add any reserve bookings in 2002 from discoveries such as Ranggas and Gendalo in Indonesia, Trident and K2 in the Gulf of Mexico and Arthit in Thailand," Williamson said. "We continue to move these and other existing discoveries towards commercialization and feel this will positively impact our reserves over the next few years."

For the longer term, Williamson noted that the company's discoveries in Bangladesh, Vietnam, Indonesia and Thailand should serve as a foundation for future reserve bookings.

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All production-sharing contracts are reported on the economic interest method, which excludes host-country shares. The year-end 2001 and 2002 reserves include minority interests in consolidated subsidiaries of 98 MMBOE and 7 MMBOE, respectively.

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This news release contains certain forward-looking statements about estimates of proved reserves and expected reserves. These statements are not guarantees of future performance. Proved reserves, as defined by the U.S. Securities and Exchange Commission (SEC), are the estimated quantities of crude oil, natural gas and natural gas liquids that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. Proved reserve quantities exclude royalty and other interests owned by others. 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 amended 2001 Annual Report on Form 10-K/A and subsequent reports filed with the U.S. Securities and Exchange Commission. Unocal undertakes no obligation to update the information in this news release.

Investors are urged to consider closely the disclosure in Unocal's amended 2001 Annual Report Form 10-K/A and other reports (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: January 2003