PRESS RELEASE - Unocal Initiates Mahoni Production

Unocal initiated production from the Mahoni Field in Balikpapan Bay on October 11, approximately one month ahead of schedule and at rates significantly higher than forecast. Initially one well, the first horizontal well in the Southern Area, is confirming the best technique to produce a higher rate of oil from the sand.

Currently, the well is flowing through facilities located in the Yakin field, at a production rate of 4,700 barrels of oil per day. Unocal plans to complete three additional wells in the field by year-end.

New, accelerated production from fields like Mahoni has a particularly significant positive impact for Indonesia during this time of high oil prices and helps to meet the country's OPEC quota.

The Mahoni field was discovered in 1999. Initial project economics were marginal, however Unocal working closely in conjunction with Pertamina, developed an economic framework for development of marginal discoveries in Balikpapan Bay.

This framework provided the basis for Unocal's development of the Mahoni Field as well as the incentive for development of future discoveries. Unocal drilled two discoveries in the in the near-by Bangkirai Field in 2000 and has plans to drill 4 additional exploratory wells in 2001. The discovery of additional oil in the Mahoni West fault block, in June of this year, provided further incentive for field development. Total reserves from the Mahoni and Mahoni West developments are expected to be 3.6 million barrels. (*)