press release

Unocal-led group wins promising oil and gas block offshore Brazil

El Segundo, Calif., June 16, 1999 --- Unocal Corporation today said that the successful bid for an offshore deepwater oil and gas block in Brazil's Espirito Santo Basin is a major step forward in the company's involvement in Brazil.

"We are extremely pleased that we won the bid for the BM-ES-2 block, which we believe is one of the most promising areas offered in the auction," said Charles R. Williamson, Unocal executive vice president for International Energy Operations. "As operator, Unocal will have the opportunity to apply its proven, low-cost deepwater drilling techniques during the exploration phase."

Williamson added that Unocal also has a proven track record in finding and developing oil and gas resources in tertiary deltaic basins around the world, the same geologic environment as found in the Espirito Santo Basin. Water depth is from 4,000 to 7,000 feet.

Unocal is operator of the consortium and has a 40.5 percent working interest. Texaco, Inc., has 32 percent, while Argentina's YPF S.A. holds the remaining 27.5 percent.

The consortium could spend US$40 to US$60 million over the next eight years for seismic programs and exploration drilling.

The Unocal-led group bid approximately US$18 million (31.7 million reals) for the block.

Forward-looking statements regarding future operations, capital spending, and business arrangements in this news release are based on assumptions concerning market, competitive, regulatory, environmental, operational 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 Securities and Exchange Commission.

Updated: June 1999