press release

Unocal, YPF form joint venture for offshore San Jorge Basin in Argentina

Sugar Land, Texas, Oct. 13, 1997 -- Unocal Corporation today said that its Unocal Latin America Ventures, Ltd., subsidiary has reached agreement with YPF, S.A., for the joint exploration and development of two large exploration permit areas offshore Argentina. Complete terms and conditions of the joint operating agreement will be negotiated over the next several months.

The offshore CGSJM blocks 1 and 2 cover 7,300 square miles and include the offshore extension of the San Jorge Basin. The onshore portion of the basin has already produced more than 2.5 billion barrels of oil. The offshore blocks encompass about one-third of the total basin. Exploration to date in the offshore area has included 17 wells that encountered hydrocarbons, with five of those classified as discoveries.

The offshore blocks were not developed previously because of difficult reservoir conditions. "Unocal's extensive experience with extended reach drilling and low-cost offshore structures in Thailand, Indonesia and the Netherlands give us a high level of confidence in the ultimate success of this challenging project," said Mike Morgan, Unocal New Ventures vice president, Latin America. "YPF brings local operating experience, knowledge and understanding of the local geology to the joint venture."

Unocal will hold a 50 percent working interest in the joint venture.

At the signing ceremonies, Unocal Corporation President John F. Imle, Jr., noted that the San Jorge project demonstrates Unocal's commitment to further energy development in Latin America while strengthening Unocal's relationship with YPF, a highly respected major participant in the Latin America energy business.

In December 1996 Unocal became a co-investor with units of YPF and Empresa Nacional del Petroleo (ENAP), the state oil company of Chile, in the 265-mile TransAndean Pipeline that transports oil from Argentina to a terminal on the coast of Chile.

During the next two to three months, the two companies will develop a joint work program to more fully appraise the blocks. This plan will probably include the acquisition of three-dimensional seismic data and the drilling of additional appraisal wells.

Unocal is a global energy resource and project development company, with 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.

YPF, Argentina's largest company, is an integrated oil and gas company involved in petroleum exploration and production, refining, marketing, transportation and distribution, and power generation.

Updated: October 1997