press release

Unocal-led consortium signs agreement for exploration block offshore Brazil

El Segundo, Calif., Sept. 24, 1999 - Unocal Corporation said today that a concession agreement has been signed with the Brazilian National Petroleum Agency (ANP) for an offshore deepwater oil and gas block in Brazil's Espirito Santo Basin. The Unocal-led consortium was the winning bidder for block BM-ES-2 in the ANP Bid Round 1 held in June.

The 593,000-acre (2,400 square kilometers) block is located in water depths of 5,000 to 8,000 feet (1,500 to 2,400 meters). Unocal Espirito Santo Ltda., a subsidiary of Unocal Corporation, is operator for the consortium and has a 40.5 percent working interest. Texaco Brasil S.A. - Produtos de Petroleo has 32 percent, while YPF Brasil S.A. (an enterprise of the Repsol-YPF Group) holds the remaining 27.5 percent.

"With this signing, BM-ES-2 officially becomes a very valuable part of our portfolio of projects in Brazil," said Sergio Brandao, president of Unocal do Brasil Ltda. "We believe this block is in one of the most promising oil and gas areas in the country. What's more, its geologic environment is very similar to the tertiary deltaic basins in which Unocal has had significant success."

He added that the low-cost deepwater drilling expertise Unocal has demonstrated in Indonesia and the Gulf of Mexico will serve the consortium well during the exploration phase of the project.

In addition to BM-ES-2, Unocal, through subsidiaries, is also operator for a consortium exploring a block in Brazil's prolific Campos Basin region and a member of two consortia working other offshore areas. Altogether, Unocal has interests in blocks covering more than 1.5 million acres (approximately 6,100 square kilometers) offshore Brazil.

The consortium could spend US$40 to US$60 million over the next eight years for seismic programs and exploration drilling. Seismic acquisition will begin in 1999 with interpretation of that data in 2000.

Unocal is a leading global oil and gas exploration and production company with pipeline and power plant project developments worldwide.

Forward-looking statements regarding future operations, capital spending, and business arrangements in this news release are based on assumptions concerning operational, market, competitive, regulatory, environmental and other considerations. Actual results could differ materially as a result of factors discussed in Unocal's 1998 Form 10-K report filed with the U.S. Securities and Exchange Commission.

Updated: September 1999