press release

Unocal tests significant gas discovery offshore Vietnam

El Segundo, Calif., Dec. 15 , 1997 -- Unocal Corporation today said its Unocal Vietnam Exploration, Ltd., subsidiary has tested a significant gas discovery in its first exploration well on Block B offshore southwestern Vietnam. Two drill stem tests on the exploration well, B-KL-1X, yielded a combined rate of 52.9 million cubic feet per day (mmcfd) of gas from Miocene age sands in the Kim Long prospect.

"We are very encouraged by the results of our first exploration well in Vietnam," said Darcel L. Hulse, Unocal vice president for New Ventures, Southeast Asia (ASEAN). "Our experience and understanding of the geology in this area enabled us to interpret properly the seismic data and score a success on the first try." Hulse noted that the well encountered tertiary sediments similar to the geologic formations in Unocal's nearby natural gas fields in the Gulf of Thailand.

"Demand for natural gas will grow in Vietnam and other Southeast Asian nations," said Hulse. "This should provide a strong market for the high quality gas we have discovered."

Unocal said it expects that the current financial troubles in the region will be resolved, and growth and economic activity will return.

Several potential hydrocarbon prospects have been identified in Block B. The company is currently drilling a second exploration well, B-KQ-1X, which should reach total depth by the end of December. Plans are to acquire 3D seismic data in 1998 to further appraise the Kim Long discovery.

Unocal Vietnam Exploration and its co-venturers signed a production-sharing contract with PetroVietnam for Block B in May 1996. Unocal has a 45 percent working interest and is the operator. Repsol Exploracisn Vietnam, S.A., of Madrid, holds a 30 percent working interest; and Moeco Vietnam Petroleum Co., Ltd., a subsidiary of Mitsui Oil Exploration Co., Ltd., holds 25 percent. PetroVietnam has an option to participate with a 15 percent interest. If exercised, PetroVietnam's option would reduce the other participants' interests proportionately.

Block B covers more than 1.3 million acres (5,263 square kilometers). It lies in the northern part of the Malay Basin in approximately 180-245 feet (55-75 meters) of water. The block is 300 miles west-southwest of Vung Tau and 150 miles east of Songkhla, Thailand.

Unocal is a leading global energy resource and project development company, with year-end 1996 petroleum 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 exploration and production activities in Asia and the U.S. Gulf of Mexico.

The company is also active in energy resource development throughout Central and Southeast Asia and Latin America. Unocal currently has oil, gas and geothermal exploration, production and transportation projects in 13 countries in Asia. In addition to Vietnam, the company is involved in Turkey, Azerbaijan, Turkmenistan, Pakistan, India, Bangladesh, Myanmar, Thailand, Indonesia, Brunei, the Philippines and China.

The company maintains twin headquarters in California and Malaysia, with major offices in Singapore, Jakarta, Bangkok and Sugar Land, Texas.

Forward-looking statements, including estimates of future exploration and development activities, in this news release are based on assumptions concerning geology, drilling success, costs, market conditions, competition, and other considerations. Actual results could differ materially.

Updated: December 1997