press release

Unocal's Thailand unit produces three trillionth cubic foot of natural gas

El Segundo, Calif., Sept. 11, 1997 - Unocal Corporation said today that its Unocal Thailand, Ltd. subsidiary has delivered its three trillionth cubic foot of natural gas to the Petroleum Authority of Thailand (PTT) from the nine fields it operates in the Gulf of Thailand. Three trillion cubic feet of gas is enough to generate all of Thailand's current electricity demand for about four years.

Natural gas produced by Unocal-operated joint ventures supplies about 25 percent of Thailand's electricity needs, and is mainly used to fuel domestic power generation plants.

Unocal's first trillion cubic foot was delivered in February 1990, less than nine years after production began. It took four years to reach the second trillion, and three and a half years to reach the third trillion. When added to the more than 100 million barrels of natural gas liquid condensate also produced from Unocal-operated fields, total production would amount to more than 550 million barrels of equivalent liquid production.

The produced gas is transported by pipeline to a major industrial complex at Rayong, located on the Gulf's eastern seaboard, for further separation and delivery to end-users. Gas is also used in the transportation and petrochemical sectors in Thailand.

"By any standard this is an enormous production volume and is the result of hard work and cooperation on the part of many people and government agencies," said Brian Marcotte, president of Unocal Thailand.

"We continue to have great expectations for expanding our operations in the Kingdom and for reaching our next trillion-cubic-foot milestone," he said. "The long-term fundamentals for continued growth and prosperity are strong and we are confident that, as Thailand works through its current situation, its future will remain bright." Marcotte added that, under the Thai gas sales contracts, Unocal receives payments effectively pegged to the U.S. dollar.

With co-concessionaires Mitsui Oil Exploration Co. (MOECO) and PTT Exploration and Production Public Co., Ltd. (PTTEP), Unocal is producing gas from nine fields in the Gulf to supply PTT. The company is preparing to put the Pailin field on stream on behalf of PTTEP, MOECO Thai Oil Development Co., and Amerada Hess Thailand in late 1998.

Unocal has a 35-percent net working interest in Pailin and an average net working interest of 65 percent in the nine fields it now operates.

For the first eight months of 1997, Unocal Thailand has produced a gross daily average of 970 million cubic feet of gas (mmcfd) and about 34,300 barrels of condensate. Natural gas production from Pailin will initially add about 165 mmcfd to the supply in late 1998 and another 165 mmcfd in late 1999 with its second phase of production. In 1996, the company produced a gross average of about 790 mmcfd of gas and 27,850 barrels per day of condensate from its nine fields.

Unocal expects to drill its first exploration well in October in the deepwater portion of the Andaman Sea, west of the southern peninsula of Thailand. Also in the Andaman Sea, the company has a 28.26 percent working interest in a project to develop the Yadana natural gas field offshore Myanmar. Beginning in mid-1998, Yadana gas will be imported into Thailand where it will fuel a 2,800-megawatt electricity generating plant west of Bangkok. Gas imports will gradually increase to about 525 mmcfd, of which about 148 mmcf represents Unocal's net share.

Unocal Corporation is one of the world's leading energy resource and project development companies, 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. The company maintains headquarters in both California and Malaysia.

Updated: September 1997