press release

Unocal to merge Agricultural Products and Alaska Exploration and Production units

Anchorage, Alaska, Oct. 17, 1996 -- Unocal Corporation today said it will merge its West Coast agricultural products business unit and Alaska oil and gas exploration and production business to form a new integrated agricultural products business unit in the company's Diversified Businesses Group.

John T. Donohue, 48, has been named vice president for the new agricultural products unit. Donohue is currently general manager for Unocal's Alaska oil and gas business operations. He succeeds Charles F. Merrill, 62, currently vice president, Agricultural Products, who will remain with the company to assist in the integration process.

"We are merging these units to strengthen the long-term future and value of our Alaska operations," said L. E. (Ed) Scott, group vice president for the Diversified Businesses Group. "We expect that the merger will provide improved operating efficiencies and reinforce the interdependence of the fertilizer operations and upstream oil and gas production in Alaska, providing opportunities for growth."

In August, Unocal established a separate business unit for Lower 48 oil and gas operations to provide sharper focus on growth opportunities and continued operational improvements.

"We have been striving to maximize the value of the Cook Inlet oil and gas properties through cost-effective capital investments and expense control," Scott said. "This merger keeps that momentum going."

Unocal operates 10 oil and gas production platforms and 5 producing gas fields in the Cook Inlet area. Net daily sales are 155 million cubic feet of gas and 18,000 barrels of oil. All of the company's net gas production in Alaska is used by Unocal's ammonia and urea plants near Kenai. The net crude oil production from the Cook Inlet is transported to the company's San Francisco Refinery.

In addition, Unocal has a working interest in two North Slope fields -- a 10 percent working interest in the Endicott Field and 4.95 percent working interest in the Kuparuk Field -- which produce 18,000 barrels per day net to Unocal.

Unocal is a major manufacturer and marketer of nitrogen-based fertilizers for the western U.S. and Asia.

The primary fertilizer manufacturing plants are located in Kenai, Alaska, and supply ammonia and urea fertilizer products to export markets in Asia and West Coast distribution terminals. The company also manufactures ammonia at Finley, Wash., for domestic markets. In addition, Agricultural Products has upgrading facilities in Kennewick, Wash., and West Sacramento, Calif.

In 1995, worldwide sales of ammonia, urea and other fertilizer products totaled more than 2.8 million tons. The Kenai plants produced approximately 1.3 million tons of ammonia and nearly 1.1 million tons of urea, which were derived from Unocal's natural gas production in the Cook Inlet area during the year.

The agricultural products unit has more than 700 employees, including 340 in Kenai. Unocal's Alaska oil and gas operations unit has about 310 employees.

Updated: October 1996