press release

Unocal statement on withdrawal from the proposed Central Asia Gas (CentGas) pipeline project

Updated 12/10/98

Effective December 4, 1998, Unocal has withdrawn from the Central Asia Gas (CentGas) pipeline consortium for business reasons. Unocal no longer has any role in supporting the development or funding of this project.

As a result of portfolio rationalization and successes around the world in Indonesia, Thailand, Vietnam, Bangladesh, Latin America, West Africa and the U.S. Gulf of Mexico, Unocal is concentrating on its core areas in this time of reduced oil prices.

Unocal had served as the development manager for the seven-member Central Asia Gas (CentGas) pipeline consortium, which was formed in October 1997 to evaluate and, if appropriate, to participate in the future construction of a gas pipeline from Turkmenistan through Afghanistan to natural gas markets in Pakistan and, potentially, India. Contrary to some published reports, Unocal was not a party to any commercial agreement with any individual Afghanistan faction.

Since the pipeline project was first proposed in 1995, there have been a number of complex issues that Unocal has taken very seriously. Unocal recognized the legitimate concerns regarding the treatment of women in Afghanistan. Consistent with our core values and business principles, Unocal provided humanitarian support and skills training to Afghanistan through CARE and the University of Nebraska at Omaha. Neither program was designed to provide pipeline construction skills training. These programs met or exceeded UN guidelines for doing fieldwork in Afghanistan. They included basic job skills training and education for both men and women, and elementary education for boys and girls. Unocal also supported earthquake relief efforts through the Red Cross and the United Nations.


Updated May 20, 2002

Unocal reiterates Afghanistan position at Annual Meeting of Stockholders

Unocal Chairman Charles R. Williamson told Unocal stockholders today that Unocal has no plans or interest in becoming involved in any projects in Afghanistan, including natural gas or crude oil pipelines. He made the statement in response to recent erroneous news reports about Unocal and the pipeline project in Afghanistan.

Background

Beginning in late 1997, Unocal was a member of a multinational consortium that was evaluating construction of a Central Asia Gas (CentGas) pipeline between Turkmenistan and Pakistan. Part of this pipeline would have crossed western Afghanistan. However, Unocal suspended its participation in the CentGas consortium in August 1998 and formally withdrew from that consortium in December 1998. Our company has had no further role in developing or funding that project or any other project that might involve the Taliban. The pipeline was never constructed.

During this time, Afghanistan was in the midst of a civil war. We met with many factions, including the Taliban, to educate them about the benefits such a pipeline could bring to this desperately poor and war-torn country, as well as to the Central Asian region. At no time did we make any deal with the Taliban, and, in fact, consistently emphasized that the project could not and would not proceed until there was an internationally recognized government in place in Afghanistan that fairly represented all its people. Our hope was that the project could help bring peace, stability and economic development to the Afghans, as well as develop important energy resources for the region.

Unocal suspended its participation in the CentGas consortium (see statement). The company officially withdrew from the project in December 1998 (see statement below). After several incorrect reports appeared, including one published in Pakistan in February 1999, Unocal reconfirmed its position regarding this matter in another statement dated Feb. 16, 1999.

Updated: December 1998