press release

Unocal sees 2004 capital expenditures at $1.93 billion; focus on major development projects

El Segundo, Calif., Jan. 27, 2004 - Unocal Corporation (NYSE: UCL) today said it expects capital expenditures by its subsidiaries for 2004 of approximately $1.93 billion, excluding approximately $80 million of capitalized interest. The investment plan compares with an estimated $1.66 billion in capital expenditures, which excluded approximately $60 million in capitalized interest, for 2003.

For 2004, Unocal expects to maintain an exploration capital budget of about $325 million. The primary focus will be deepwater Gulf of Mexico and Indonesia. Exploration spending on the deep shelf program in the GOM represents about 10 percent of the overall spending plan and will be less than one-half of the 2003 level.

Nearly 50 percent of the estimated spending, or $930 million, is earmarked principally for large international crude oil and natural gas development projects that are expected to bring on new production in 2004 and 2005.

Major international projects include Thailand oil and gas development, Indonesia deepwater development, Bangladesh gas field development, Caspian Sea oil development (including the export pipeline), and China's Xihu Trough natural gas development. In the U.S., Unocal will be completing development of the Mad Dog field and beginning development of the K2 field in the deepwater Gulf of Mexico.

Worldwide annual average production for 2004 is expected to be nearly flat with 2003, or about 450,000 barrels-of-oil equivalent per day, since a significant number of the major development projects are expected to come online in 2005.

About 94 percent of the total capital spending plan is for exploration and production projects, with about two-thirds targeted for outside North America.

Unocal 2004 capital spending detail (excluding capitalized interest), millions of $

Category North America International Total
Major Projects $100 $830 $930
Exploration Drilling $195 $100 $295
Other E&P $340 $260 $600
All Other $80 $30 $110
Total $715 $1,220 $1.935

About Unocal Corporation

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

This news release contains certain forward-looking statements about Unocal's capital spending and development activities. 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. The reports are also available on the Unocal web site. You can also obtain this form from the SEC by calling 800-SEC-0330.

Updated: January 2004