Unocal signs commercial licenses with refiners for patented cleaner burning gasoline formulations
El Segundo, Calif., May 2, 2001 -- Unocal Corporation (NYSE: UCL) today said it has signed two additional commercial licenses with major refiners for its patented cleaner burning gasoline formulations.
The licenses for Unocal's five patents for reformulated gasolines (RFG) were signed with Tesoro Petroleum Corporation (NYSE: TSO) and another refiner whose identity is not being disclosed at this time. These refiners serve various RFG markets throughout the United States.
Yesterday, Unocal announced it had signed a license agreement with Citgo Petroleum Corporation.
"These license agreements will enable these refiners to supply cleaner burning gasolines to the motoring public in a cost-efficient way," said Charles R. Williamson, Unocal chief executive officer. "Ever since we discovered and patented our unique gasoline formulations that reduce tailpipe emissions, we have sought to make our invention broadly available to the industry. With these commercial licenses, our invention is finally being commercially applied to benefit the American public."
In late March, Unocal announced uniform licensing terms for its portfolio of five patents on cleaner burning gasoline formulations. The license schedule specifies a range between 1.2 and 3.4 cents per infringing gallon structured in such a way that the licensee's rate per gallon is reduced as more utilization occurs. Williamson noted that all licensing fees from Unocal's patents were likely to add less than one cent per gallon to the cost of reformulated gasolines nationwide.
Williamson noted that these agreements were reached less than five weeks after Unocal announced its license schedule and without the cost and delays of litigation.
"The licensing terms are designed to encourage and reward those licensees who use the patented formulations the most," Williamson said.
The company did not estimate expected revenues from the licenses.
Williamson indicated that Unocal continues to negotiate licenses with a number of other refiners, blenders and importers.
Williamson also said that Unocal remains interested in negotiating license agreements with the five companies that have challenged Unocal's first patent in court. "We are still involved in litigation surrounding past infringement by those companies under the terms of the jury award," Williamson noted. "Any license agreements with them would likely have to be negotiated in the context of those legal proceedings."
About Unocal Corporation
Unocal is one of the world's leading independent natural gas and crude oil exploration and production companies. The company's principal operations are located in North America (Gulf of Mexico region, Alaska and Canada) and in Asia (Thailand, Indonesia, Myanmar and Bangladesh). The company is also pursuing exploration programs in West Africa and Brazil.
Additional information about Unocal's patents for cleaner burning gasoline formulations is available on the company's web site and in its 2000 Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission.
Updated: May 2001