press release

Unocal updates earnings guidance for 4th quarter

El Segundo, Calif., December 26, 2002 Unocal Corporation (NYSE: UCL) said today that it is revising its estimates for earnings in the fourth quarter.

Unocal said it expects adjusted earnings of 40 to 45 cents per share. This compares with the company's previous guidance of 50 to 60 cents per share and a Thompson First Call estimate of 51 cents on December 23, 2002.

Changes in commodity prices account for approximately 11 cents of the revision, with the NYMEX benchmark price per barrel of crude oil down $1.65 to $28.10 and the NYMEX price of gas per million British thermal units (mmBtu) down 20 cents to $3.90.

The revision to the earnings estimate also reflects a 4 cent decrease due to a non-cash charge for Pure Resources, Inc. stock options that have been converted to options on Unocal common stock. These options, covering 4.3 million shares, are treated as variable compensation. Since Unocal's acquisition of the outstanding minority interest in Pure on October 30, Unocal's share price has increased $4.01 as of December 26. Accordingly, this price increase requires an $11 million after-tax charge to compensation expense for the increased value of these options in the fourth quarter.

Estimates for fourth quarter production volumes and dry hole costs are still within the range of estimates disclosed on October 24, 2002.

The revised estimate for net earnings includes all of the factors mentioned above as well as a special item for environmental remediation of sites presently and formerly owned by the company. This special item accounts for approximately 10 cents of the decrease in Unocal's revised net earnings estimate for the fourth quarter of between 30 and 35 cents per share.

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, Asia, Latin America, the North Sea, and West Africa. Unocal is also one of the world's largest producers of geothermal energy with operations in the Philippines and Indonesia.

This news release contains certain forward-looking statements about expected earnings and commodity prices. 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 amended 2001 Annual Report on Form 10-K/A and subsequent reports filed with the U.S. Securities and Exchange Commission. Unocal undertakes no obligation to update the information in this news release.

Investors are urged to consider closely the disclosure in Unocal's amended 2001 Annual Report on Form 10-K/A and other reports filed with the SEC (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.

Updated: December 2002