press release

Unocal consortium signs Caspian Sea production sharing agreement for Ashrafi, Dan Ulduzu block

Sugar Land, Texas, Dec. 16, 1996 -- Unocal Corporation today said its Unocal Eastern Hemisphere Exploration Ltd. subsidiary has signed a production sharing agreement with Socar (State Oil Company of the Azerbaijan Republic) for a 450-square-kilometer block covering the Ashrafi and Dan Ulduzu oil prospects in the Caspian Sea.

Unocal holds a 25.5 percent interest in the block which will be operated by a consortium. Other participants include; Amoco (30%), Itochu Oil Exploration Ltd. (20%), Socar (20%), and Delta Oil Company of Saudi Arabia (4.5%).

"This is an exciting prospect that expands Unocal's activities in the oil-rich Caspian Sea," said Marty F. Miller, Unocal Vice President, New Ventures. "We believe these prospects offer a low-risk exploration opportunity with important upside potential for the company."

The production sharing contract requires the participants to acquire a 3D seismic survey and drill three exploration wells. In addition, the consortium will assist in the upgrade of a Socar drilling vessel to facilitate exploration drilling. If the exploration proves successful, total capital investment to develop the prospects could exceed $2.5 billion.

The Ashrafi Dan Ulduzu Block is located approximately 12 miles (20 km) north of the oil fields being developed by the Azerbaijan International Oil Company (AIOC), covered by a production sharing agreement in which Unocal holds a 10 percent interest.

Updated: December 1996