press release

Unocal unit tests large geothermal well in North Sumatra, Indonesia

El Segundo, Calif., Dec. 3, 1997 - Unocal Corporation today said its Unocal North Sumatra Geothermal, Ltd. (UNSG), subsidiary, under a joint operations contract with Pertamina, has successfully completed one of the world's largest geothermal wells at the Sarulla contract area in North Sumatra, Indonesia.

The development well, Silangkitang 1-3, was the fifth drilled in the Silangkitang geothermal area and would supply the Sarulla Unit 1 electricity generating plant, scheduled to begin operations in 2000.

The well was completed to a depth of 7,085 feet and registered a total mass flow rate of 1.9 million lbs./hr. through a 7-inch liner at a restricted flow setting of 650 psi wellhead pressure, representing the equivalent of 37 megawatts (MW) of electricity generation capacity. Under normal geothermal power plant operating conditions of 200 psi wellhead pressure, the well is estimated to have a production capacity equivalent to more than 50 MW.

"This well brings the confirmed cumulative capacity of the Silangkitang field to approximately 90 MW, further confirming our earlier resource study," said Olin D. Whitescarver, vice president and general manager of UNSG and Unocal Geothermal Indonesia, Ltd. (UGI). UNSG has a contract to supply up to 1,000 megawatts of electricity from the Sarulla contract area. The Sarulla Unit 1 power plant would be the first privately developed generating facility outside of Java.

Sarulla is located on the island of Sumatra, about 200 miles south of Medan, the island's most populous city. The power from Sarulla will be delivered to PT. PLN (Persero), Indonesia's state-owned electric company, for distribution to the Medan power grid.

On the Island of Java, UGI is a participant in a joint venture that recently began operations of Indonesia's first privately developed geothermal-powered electric generating plants.

Dayabumi Salak Pratama Ltd., which is jointly owned by UGI (50%), and PT Nusamba Geothermal, now operates three, 55-megawatt power plants in Gunung Salak contract area. Geothermal steam to power these three plants, plus three other 55-megawatt units operated by PT. PLN (Persero), is supplied by joint venture between UGI (90%), and PT Nusamba Geothermal (10%). Unocal is the world's largest producer of geothermal energy. In addition to the Sarulla and Gunung Salak projects, the company has commercial geothermal projects in the United States and the Philippines. The company's Unocal Geotermica Nicaragua, S.A., subsidiary recently signed an exploration concession for a geothermal energy prospect in Nicaragua.

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 production activities in Asia and the U.S. Gulf of Mexico. The company is also active in energy resource development in Asia and Latin America and is developing gas-marketing solutions for Turkmenistan. 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 geothermal resources and future project activities, in this news release are based on assumptions concerning geology, drilling success, government approvals and other considerations. Actual results could differ materially.

Updated: December 1997