press release

Unocal awarded Andaman Sea exploration blocks

El Segundo, Calif., June 19, 1996 -- Unocal Corporation today said its Unocal Bangkok, Ltd., subsidiary has signed a petroleum concession agreement with Thailand's Ministry of Industry for two blocks in the Andaman Sea under Thailand's 14th Bid Round.

The two blocks, W8/38 and W9/38, cover more than 18,750 square miles in the Mergui Basin and the northern part of the North Sumatra Basin. The blocks are in deep water off Thailand's southwest coast, approximately 30 miles west and southwest of Phuket. In the early 1970s, Unocal explored in the same area, discovering natural gas in 1976. The find was deemed sub-commercial at the time because no gas market existed.

"These blocks are attractive in 1996 because natural gas has become the fuel of choice for electrical power generation in Thailand," said Brian Marcotte, president of Unocal Thailand, Ltd. "If the prospects on these blocks prove to contain commercial quantities of gas, we are confident we will have a market for it."

Marcotte added that technological advances allow for the economical development of deep water resources. Water depth in the two blocks ranges from less than 1,000 feet to more than 3,000 feet.

Unocal is focused on increasing its business activities in Southeast Asia. Recently, the company signed a production sharing contract to explore offshore Vietnam near Unocal Thailand's operations in the Gulf of Thailand, and has proposed an integrated energy project for Bangladesh. Unocal is also a participant in a consortium that is developing the Yadana natural gas field in the Andaman Sea, offshore Myanmar. This project will supply about 525 million cubic feet (mmcf) of gas per day to Thailand.

Unocal Thailand has also concluded negotiations with PTT for a fourth gas sales agreement to develop the Pailin field. Based on drilling to date, Unocal estimates that the Pailin field contains nearly one trillion cubic feet (tcf) of recoverable gas. "We believe that total recoverable gas could be as high as 2 tcf, but we will need to do additional delineation work," Marcotte said. Unocal has 35 percent interest in Pailin.

In 1995, Unocal Thailand's gross production averaged 720 mmcf per day of natural gas from eight offshore fields in the Gulf of Thailand. Gross production for 1996 is expected to average 820 mmcf per day, and this should rise to about 950 mmcf per day for 1997. Unocal holds an average interest of about 65 percent (after-royalty) in the producing contract areas.

Unocal has a 46-2/3 percent interest in Blocks W8/38 and W9/38; Total of France holds 33-1/3 percent; and Statoil, the Norwegian company, holds 20 percent. There is an option for a Thai company to acquire a 10 percent interest in the venture. Unocal will be the operator. The three-year work program for both blocks entails seismic work and drilling.

Updated: June 1996