press release

Unocal signs agreements for Uzbekistan oil and gas, pipeline infrastructure studies

Sugar Land, Texas, Nov. 4, 1996 -- Unocal Corporation today announced that agreements have been signed with the Republic of Uzbekistan for Unocal to evaluate the country's potential crude oil and natural gas resources and to determine the feasibility of utilizing part of Uzbekistan's pipeline network to tie into Unocal's proposed Central Asia Oil Pipeline (CAOP). The CAOP, when constructed, will link Central Asia oil producers to a new deepwater port on Pakistan's Arabian Sea coast.

The agreements were signed by the government of the Republic of Uzbekistan; Uzbekneftegaz, the national oil and gas company; Unocal International Energy Ventures, Ltd., a Unocal subsidiary: and Delta Oil Pipeline Company (Uzbekistan), Ltd., and Delta Oil Company (Uzbekistan), Ltd., units of Delta Oil Company of Saudi Arabia, Unocal's coventurer in the projects.

The first agreement calls for evaluating existing pipelines in Uzbekistan that could be used as part of the gathering system for the CAOP. In addition, Unocal will work with experts from Uzbekistan to estimate future Uzbekistan production levels from oil and condensate fields and determine potential export volumes for the CAOP.

A second agreement calls for a joint study with Uzbekneftegaz of the potential of new oil and gas exploration areas in Uzbekistan. The company said the joint study could lead to negotiations for contracts related to oil and gas production in the country.

"The CAOP project offers an option for the export of significant volumes of Uzbekistan's oil and condensate to hard currency markets," said Marty F. Miller, Unocal vice president, New Ventures. "With the signing of these agreements, we have added the support of Uzbekistan in negotiations with neighboring countries that could help bring this important pipeline project to reality."

Miller noted that the agreements with Uzbekistan meshed with Unocal's "market-to-resource" strategy in Central Asia. "We have focused on developing energy resources in the region and markets for those resources," Miller said. "We are part of the consortium that is developing oil reserves for export from Azerbaijan; we have agreements to export natural gas from Turkmenistan through Afghanistan to Pakistan; and now we are developing plans for Uzbekistan to export its oil reserves."

The CAOP project is one of two pipelines proposed by Unocal and Delta to export hydrocarbons from Central Asia. A second proposed pipeline would carry natural gas from fields in Turkmenistan through Afghanistan to markets in Pakistan. Earlier this year, Unocal and Delta formed a consortium to include Gazprom, the Russian gas company, and Turkmenrusgaz, a joint venture between the Government of Turkmenistan and Gazprom, in the project.

Unocal and Delta plan to open an office in Tashkent, the Uzbekistan capital, in the near future. The studies under the new agreements are expected to take six months to a year to finalize recommendations on pipeline infrastructure and production export volumes.

Unocal said that additional related agreements for oil and gas exploration, development, production and transportation in Uzbekistan are under consideration.

Updated: November 1996