press release

Unocal sanctions Phase 3 development of ACG field in Caspian Sea

El Segundo, Calif., Sept. 20, 2004 - Unocal Corporation (NYSE: UCL) joined with other company representatives today in signing a resolution sanctioning the Phase 3 development of the giant Azeri-Chirag-Deepwater Gunashli (ACG) field in the Azerbaijan sector of the Caspian Sea.

"The sanctioning of the Phase 3 development is an important step toward making this resource a million-barrel-per-day producing field," said Don Hansen, vice president for International Energy Operations. "With this phase, we will employ the lessons we learned from the development work to date in Phases 1 and 2 and capitalize on the economies of standardized field development."

The Phase 3 project represents the next significant development phase of the ACG production-sharing agreement (PSA), which is operated by Azerbaijan International Operating Company (AIOC). Phase 3 offshore facilities will comprise a 48-slot drilling, utilities and quarters platform that is bridge-linked to a production, compression, water injection and utilities platform in Deepwater Gunashli. The start of oil production from Phase 3 is currently planned for mid-2008. All associated gas, except for fuel requirements, will be delivered to the State Oil Company of Azerbaijan (SOCAR). The field's gross recoverable oil is estimated at around 5.4 billion barrels.

Unocal Khazar Ltd., a wholly owned Unocal subsidiary, has a 10.3-percent interest in the ACG PSA and AIOC. Ownership in the AGC PSA and AIOC also includes SOCAR (10% working interest) and eight other foreign oil companies: BP (operator, 34.1%), INPEX (10.0%), Statoil (8.6%), ExxonMobil (8%), TPAO (6.8%), Devon (5.6%), Itochu (3.9%), and Amerada Hess (2.7%).

The development of the ACG field has been divided into four parts: Early Oil and Phases 1, 2 and 3. The Early Oil project is currently producing about 148,000 barrels of oil per day (gross). Phase 1 is expected to come on line in 2005; Phase 2 in 2006. Total production from the fields is expected to peak at more than 1.1 million barrels of oil per day in 2009 after Phase 3 comes on line.

About Unocal Corporation

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

This news release contains forward-looking statements about matters such as assessments of hydrocarbon formations and potential resources, drilling and development plans, and production rates, timing and growth. Although these statements are based upon Unocal's current expectations and beliefs, they are subject to known and unknown risks and uncertainties that could cause actual results and outcomes to differ materially from those described in, or implied by, the forward-looking statements, including volatility in commodity prices and the effectiveness of Unocal's hedging program; the accuracy of estimates and judgments regarding hydrocarbon resources and formations; decline rates of producing properties; adverse geological and other operational factors; the extent of Unocal's operating cash flow and other capital resources available to fund its capital expenditures; international and domestic regulatory, political, and economic factors; performance by foreign government entities, joint venture partners, independent contractors, equipment suppliers and other third parties; competition within Unocal's highly competitive industry; and other risks and uncertainties discussed in Unocal's 2003 Annual Report on Form 10-K, as amended, and subsequent reports filed by Unocal with the Securities and Exchange Commission (SEC File No. 1-8483). Copies of Unocal's SEC filings are available from Unocal by calling 800-252-2233 or from the SEC by calling 800-SEC-0330. The reports are also available on the Unocal web site. Unocal undertakes no obligation to update the forward-looking statements in this news release to reflect future events or circumstances. All such statements are expressly qualified by this cautionary statement.

The SEC has generally permitted 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 "gross recoverable oil" in this news release to describe estimated volumes of reserves potentially recoverable through additional drilling or recovery techniques. The SEC's guidelines may prohibit us from including this estimate in filings with the SEC. This estimate is by its nature more speculative than estimates of proved reserves and accordingly is subject to substantially greater risk of being actually realized.

Updated: September 2004