press release

Unocal unit signs gas sales agreement for new Bangladesh production

El Segundo, Calif., Oct. 20, 2003 - Unocal Corporation (NYSE: UCL) today said that two of its subsidiaries have signed a natural gas purchase and sales agreement (GPSA) with Petrobangla, the Bangladesh Oil & Gas Corporation, to develop and produce natural gas from the Moulavi Bazar field.

Under the agreement, Unocal expects to produce 70 to 100 million cubic feet (mmcf) of gas per day from the field beginning in the first quarter 2005. Unocal Bangladesh Blocks 13 and 14, Ltd., is operator and, together with Unocal Bangladesh, Ltd., has a 100-percent working interest in the production sharing contract (PSC) covering the field.

"Development of the field will help meet Bangladesh's immediate needs for natural gas supplies," said Andrew L. Fawthrop, president and managing director of Unocal Bangladesh, Ltd. "Our goal is to assist Petrobangla in developing the country's energy resources. We are here to deliver the maximum benefit from Bangladesh's resources while setting the standard for safe and honest business operations."

Total development cost of the project, including two development wells, has been estimated at US$45 million. Unocal will build a gas processing plant and a 15-mile-long (25 kilometers) pipeline to connect the field with the national grid.

The Moulavi Bazar field is located in Block 14 in the northeast district of Sylhet. The company estimates the field has a gross resource potential of more than 440 billion cubic feet of gas. Reserves would be booked in step with the execution of the development program.

The Moulavi Bazar development would expand Unocal's Bangladesh's current production in the country. Unocal, through subsidiaries, is producing approximately 140 mmcf of natural gas per day from the Jalalabad field on block 13 for the Bangladesh domestic market. In total, Unocal subsidiaries today supply more than 10 percent of the Bangladesh's domestic natural gas requirements.

"We are quietly building a substantial natural gas business in Bangladesh that is important to the people of Bangladesh as well as to Unocal," said Charles R. Williamson, chairman and chief executive officer of Unocal Corporation. "With the addition of Moulavi Bazar, we will have the capacity to produce more than 250 mmcf of gas per day for domestic Bangladesh consumption."

Williamson added that the Moulavi Bazar development is economically attractive because Unocal can bring on the production quickly and the company will be booking reserves at a very attractive cost per thousand cubic feet.

"Signing this GPSA adds another significant development to Unocal's large and growing backlog of energy resource development projects in Asia and North America." Williamson said.

About Unocal Corporation

Unocal is one of the world's leading independent natural gas and crude oil exploration and production companies. The company's oil and gas activities are in North America and Asia.

This news release contains certain forward-looking statements about Unocal's future development plans, production estimates and resource potential. Resource potential is speculative estimate of ultimate recovery (including non-proved resource) based on engineering, geophysical, and geological studies and may include market risk. These statements are not guarantees of future performance. 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 Annual Report on Form 10-K and subsequent reports filed with the Securities and Exchange Commission.

Cautionary Note to U.S. Investors: The U.S. Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. Unocal uses the term "resource potential" in this news release, which the SEC's guidelines strictly prohibit Unocal from including its filings with the SEC.

U.S. investors are urged to consider closely the disclosure in Unocal's 2002 Annual Report on Form 10-K (SEC File No. 1-8483). Copies of the company's SEC filings are available from the company by calling 800-252-2233 or from the SEC by calling 800-SEC-0330. The reports are also available on the Unocal web site.

Under the terms of the PSCs, Unocal Bangladesh, Ltd, and its affiliates, as contractors to Petrobangla, the Bangladesh Oil & Gas Corporation, are entitled to varying shares of the oil and gas produced from commercial discoveries.

Updated: October 2003