press release

Unocal says Thailand gas production remains at 1 BCF per day

El Segundo, Calif., Jan. 15, 1999 - Unocal Corporation today said that gross natural gas production from fields operated by its Unocal Thailand, Ltd., subsidiary is currently averaging about 1 billion cubic feet per day (bcfd). Unocal averaged gross natural gas sales of 983 million cubic feet per day (mmcfd) during 1998.

The statement was issued following erroneous reports that Unocal's gross natural gas sales to the Petroleum Authority of Thailand (PTT) were currently being cut to 740 mmcfd.

"Right now, we are forecasting average sales of about 935 mmcfd for the full-year 1999, which would mean possible reduction from current levels in the latter part of the year as other producers come on line," said Charles R. Williamson, Unocal group vice president for Asia Operations. "There are many signs that the Thai economy is recovering. We expect that natural gas demand will remain at high levels and continue to increase in the future. Unocal Thailand stands ready to produce gas to meet any rise in demand."

Williamson added that Unocal's average contract sales price is competitive with gas from other producers and very competitive on a worldwide basis.

"We have had a long and valued partnership with the people of Thailand, and our natural gas production is an important component of their economic recovery," Williamson said. "Beyond 1999, the long-term demand for natural gas will be determined by how quickly the Thai economy grows. It's too early to make any hard and fast projections at this time."

Press reports have said that PTT expects total gas consumption to average 1.8

bcfd in 1999, up from about 1.7 bcfd in 1998. Meanwhile, the Thai Industry Ministry is reported to be urging power producers and industrial manufacturers to increase use of indigenous clean-burning natural gas versus other fossil fuels. Four new independent power plants are expected to come on-stream before 2002, and all of them are fueled by natural gas.

Williamson added, "It is very appropriate that fuel switching from fuel oil to natural gas should be continued wherever possible, as has been the policy of both the Electricity Generating Authority of Thailand and PTT. This is good for both the economy and the environment."

Unocal Thailand has an average 64-percent net working interest in the three sales contract areas encompassing 11 producing fields in the Gulf of Thailand. The natural gas is used in Thailand's power generation, the transportation sector, and the petrochemical industry.

Forward-looking statements about future production rates and costs in this news release are based on assumptions concerning geological, market, competitive, regulatory, environmental, operational and other considerations. Actual results could differ materially.

Updated: January 1999