press release

Unocal signs new production sharing contract for Sesulu area, offshore Indonesia

El Segundo, Calif., Sept. 22, 1997 -- Unocal Corporation said today that its Unocal Indonesia Company subsidiary has signed a new production sharing contract (PSC) with Pertamina, the Indonesian national oil company.

The new PSC, named Sesulu, lies in the Mahakam Delta area, offshore East Kalimantan, Indonesia, and covers 690,000 acres (2,797 sq. km.).

Unocal Indonesia, which will be operator for the Sesulu PSC and hold a 100 percent working interest, plans to drill four wells on the PSC during the next three years. Several prospects and leads have already been identified on the PSC. The acreage is adjacent to the company's existing productive East Kalimantan PSC and can be explored using Unocal's "Saturation Exploration (SX)" technique.

"With the addition of the Sesulu PSC, Unocal has strengthened its position in the prolific Mahakam Delta," said Timothy C. Lauer, president & managing director of Unocal Indonesia. "This area is underexplored and highly prospective. Should new fields be found, we can bring them on production quickly and efficiently using our present infrastructure." Unocal Indonesia plans to spud the first exploration well on the Sesulu PSC area in October.

This Sesulu PSC is the second recent expansion of Unocal's holdings offshore East Kalimantan. Last week, Unocal announced it had earned a 50 percent interest in the 868,000-acre (3,516 sq. km.) Makassar Strait PSC that lies northeast of the Sesulu PSC. Unocal Indonesia successfully tested a deepwater exploration well in the Makassar PSC to earn the interest in the contract area. In addition, the company announced it had drilled six successful deepwater exploration wells in its East Kalimantan PSC area.

Unocal Indonesia operates nine fields offshore East Kalimantan. Unocal holds a 100-percent interest in eight of these fields -- Santan, Serang, Sepinggan, Melahin, Kerindingan, Seguni, Pantai and Yakin -- and a 50-percent interest in the supergiant Attaka field. Current gross daily production is more than 90,000 barrels of oil and 250 million cubic feet of gas. All of the production is in water depths of less than 300 feet (100 m.).

Unocal Corporation is one of the world's leading energy resource and project development companies, with reserves of more than 9.8 trillion cubic feet of natural gas equivalent (1.6 billion barrels of oil equivalent) and major oil and gas production activities in Asia and the U.S. Gulf of Mexico. The company maintains headquarters in both California and Malaysia.

Updated: September 1997