Unocal unit signs contracts for East China Sea gas exploration and development
El Segundo, Calif., Aug. 19, 2003 Unocal Corporation (NYSE: UCL) today said that its Unocal East China Sea, Ltd., subsidiary has signed five contracts to explore for and develop natural gas resources in the Xihu Trough of the East China Sea.
Unocal East China Sea will hold a 20 percent working interest in the contracts. Other participants include China National Offshore Oil Corporation (CNOOC), China's largest offshore oil and gas company, which will hold 30 percent; China Petroleum and Petrochemical Corporation (Sinopec), 30 percent; and Pecten Orient Company LLC, an affiliate of Shell Oil Company and Shell Exploration (China) Limited, 20 percent.
The Xihu Trough is an area of multiple gas discoveries offshore East China Sea. The project area covers nearly 5.4 million acres (22,000 square kilometers) in approximately 300 feet (91 meters) of water.
The project scope includes appraisal and development of discovered fields, as well as further exploration potential. CNOOC will be the operator of all five contract areas and will establish Xihu Oil and Gas Operating Company (XOGOC). All participant companies will assign personnel to positions in the XOGOC technical and management structure.
"This project offers Unocal an excellent opportunity to utilize the experience and success of our Thailand and Asian gas operations that have many similarities in their technical scope with the Xihu project," said Charles R. Williamson, Unocal chairman and chief executive officer. "In addition, the government's support for this project and its desire to bring more natural gas on production as soon as possible makes this a good addition to our already robust portfolio of major discoveries headed to sanction and our Asian gas opportunities."
The appraisal and exploration work for Phase 1 of the project will focus on development of the resources in and around the 173,000-acre Chunxiao Block. The near-term work program involves drilling appraisal and exploration wells to prove additional resources sufficient to warrant a first phase of commercial development.
Natural gas from the project would be delivered by pipeline 220 miles (350 kilometers) to the Zhejiang province and Shanghai area markets. Liquids would be transported by pipeline to the Pinghu offshore development that is 37 miles (60 kilometers) from the proposed Xihu central processing platform. The Chinese government has encouraged the project participants to bring production on stream as soon as possible, targeting mid-2005. Production is expected to reach 250 MMscf/d within two years.
About Unocal Corporation
Unocal is one of the world's leading independent natural gas and crude oil exploration and production companies with principal operations in North America and Asia. In addition to Unocal's participation in the Xihu Trough, another Unocal subsidiary has a 49-percent working interest in the Zhangjiagang Oriental Unocal Energy Company Ltd. (ZOUEC) LPG terminal in the Jiangsu Province in East China. Unocal has two offices in China, one in Beijing and one in Shanghai. For more information about Unocal and its activities, visit the company's web site at www.unocal.com.
This news release contains certain forward-looking statements about the timing and volume of expected production. The statements are based upon Unocal's current expectations and beliefs and are subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those described in the forward looking statements. Actual results could differ materially as a result of factors discussed in Unocal's 2002 Form 10-K and other reports filed with the U.S. Securities and Exchange Commission. Unocal undertakes no obligation to update the information in this news release.
U.S. investors are urged to consider closely the disclosure in Unocal's 2002 Form 10-K (SEC File No. 1-8483). Copies of the Unocal's SEC filings are available from the company by calling 800-252-2233. The reports are also available on the Unocal web site, www.unocal.com. You can also obtain this form from the SEC by calling 800-SEC-0330.
Updated: August 2003