press release

Unocal signs production sharing contract to explore offshore Vietnam

Sugar Land, Tex., May 28, 1996 -- Unocal Corporation today said its Unocal Vietnam Exploration, Ltd. subsidiary has signed a production-sharing contract with Petrovietnam for petroleum exploration on Block B, offshore Vietnam.

Block B, which contains natural gas prospects, is located offshore southwestern Vietnam and covers more than 1.3 million acres. The block is in the northern part of the Malay Basin in approximately 180-215 feet of water. The block is 300 miles west-southwest of Vung Tau and 150 miles east of Songkhla, Thailand.

"The growing domestic economies of Vietnam, Thailand and other countries in the region provide expanding energy markets," said John F. Imle, Jr., Unocal's president. "Southeast Asia is a major focus of Unocal's long-term growth strategy. This contract with Vietnam is another step forward in the implementation of that strategy, enhancing our presence in the Southeast Asia region."

The three-year work program entails seismic work and the drilling of exploration wells. The company expects to encounter tertiary sediments similar to the formations in Unocal's major natural gas operations nearby in the Gulf of Thailand.

"We are well advanced on the learning curve in finding, developing and marketing petroleum resources in these types of sands," Imle said. "We plan to apply that experience to Block B and other attractive onshore and offshore prospects that we are pursuing in Vietnam."

Seismic exploration is expected to take approximately nine months to complete and analyze; the first exploration well should be drilled sometime in 1997.

Unocal has had long-term energy operations in Thailand, Indonesia and the Philippines. It is a co-venturer with Total, Petroleum Authority of Thailand Exploration and Production Company (PTTEP) and the Myanma Oil and Gas Enterprise (MOGE) in the Yadana natural gas project offshore Myanmar, which is expected to begin production in 1998. In the last two years the company has opened offices in Vietnam, Cambodia, Pakistan and China. The company also opened a regional new ventures headquarters in Singapore to support its new business efforts and listed its common stock on the Stock Exchange of Singapore in September 1995.

Unocal has a 45 percent working interest in the Block B project; Repsol, the Spanish national oil company, holds 30 percent; and Moeco Vietnam Petroleum Co., Ltd., a subsidiary of Mitsui Oil Exploration Co., Ltd., holds 25 percent. Petrovietnam Exploration and Production Co., Ltd. (PVEP), a unit of Vietnam's state oil and gas company, has an option to acquire a 15% interest. If exercised, PVEP's option would reduce the other participants' interests proportionately: Unocal to 38.25 percent, Repsol to 25.5 percent, and Moeco to 21.25 percent.

Updated: May 1996