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UNOCAL ASSIGNED 16 PERCENT OF FOREIGN PARTICIPATION IN UNITIZED DEVELOPMENT OF THREE OIL FIELDS OFFSHORE AZERBAIJAN

 LOS ANGELES, June 7 /PRNewswire/ -- Unocal Corp. today announced that its subsidiary, Unocal Khazar Ltd. (Unocal), has signed a notice of acceptance for 16 percent of the participation offered to a consortium of foreign companies for joint development of the Guneshli, Chirag and Azeri oil fields in the Caspian Sea.
 With this acceptance, Unocal agreed to the terms of a Declaration of Unitized Development issued June 5 by the State Oil Company of the Azerbaijan Republic (SOCAR). The declaration announced SOCAR's decision to consolidate the three fields into a single contract area, operated under a single plan of development.
 The declaration calls for a single production-sharing type unitized development contract. Full-time contract negotiations are expected to begin in mid-June. The contract, which will require ratification by Azerbaijan's parliament, will include complete commercial terms that have not yet been agreed upon. In addition to contract ratification by all parties, a definitive plan and commitment for an export pipeline will be required. At that point, full-scale development work can begin, although conceptual design work is already in progress.
 Several factors will determine Unocal's net interest in the project. Under the terms of the declaration, SOCAR reserves the right to a 30 percent participation in the project investment. Unocal's interest is also subject to a participation right by its own co-venturers. Therefore, Unocal's net participating interest in the project investment will be about 9.5 percent, after deducting SOCAR's 30 percent and approximately 1.7 percent for co-venturers.
 The Guneshli, Chirag and Azeri fields are located in the Caspian Sea less than 100 miles offshore Azerbaijan. SOCAR has recently estimated that the three fields contain about 4.4 billion barrels of recoverable crude oil, plus significant quantities of natural gas. Recent preliminary studies by Unocal support this estimate. However, additional seismic work, delineation drilling and some production experience will be required to confirm this reserve estimate.
 "Unocal is pleased to accept participation in this promising venture," said John F. Imle Jr., executive vice president of Unocal and president of its Energy Resources Division. He added, "This project presents a significant opportunity for all parties, under an arrangement that should benefit all. A coordinated, phased development program should accelerate oil production, reduce capital and operating costs, and limit pre-production cash exposure for the participants.
 "Now that the three fields will be consolidated," Imle said, "SOCAR and the foreign companies are in a position to concentrate on rapid resolution of outstanding contractual issues and begin actual project work. We believe that significant quantities of oil production for export could commence within three or four years after the contract and pipeline issues are finalized. The Caspian Sea is destined to become a major oil producing region with significant strategic implications for the United States and other oil-consuming nations. Unocal is committed to the continued development of business relationships with all the nations in the region."
 Unocal is also a participant in the Khazar Pipeline Consortium Organizing Committee, which is in the process of selecting an oil export pipeline route to the existing oil export terminal in Ceyhan, Turkey, in the eastern Mediterranean Sea. SOCAR has previously announced an agreement with Turkish entities for the use of existing facilities and the construction of necessary additional pipelines. SOCAR has recently stated that three pipeline routes from the Baku area to Turkey are under detailed study and cost analysis: via Georgia, Armenia or Iran. According to SOCAR, the Armenian option would result in substantial revenue to the Republic of Armenia.
 -0- 6/7/93
 /CONTACT: Janet McClintock of Unocal, 213-977-5047/


CO: Unocal Corp. ST: California IN: OIL SU:

EH-JB -- LA019 -- 6154 06/07/93 15:30 EDT
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Date:Jun 7, 1993
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