Unocal Corp. confirmed its 1998 oil and gas production andcapital spending will be lower than originally anticipated becauseof the lower oil price outlook, but said it would continue toevaluate spending plans throughout the year. Production is expectedto be down 5% from earlier forecasts to 178,000 barrels of oilequivalent (BOE) per day. Capital spending is expected to total$1.30-$1.35 billion, about 10-13% percent below its earlierforecast.

“The revised capital spending forecast reflects the currentcrude price outlook and will impact short-term investment projectssuch as well workovers and some development drilling in currentfields,” said Roger C. Beach, Unocal chairman and chief executiveofficer. “We will continue with our long-term, high-value growthprojects in Indonesia, Bangladesh, Argentina and the Caspian Sea,as well as our exploration of high-potential prospects in the Gulfof Mexico shelf and deep-water areas.”

Beach added the company will focus U.S. activities on reservereplacement rather than short-term projects to boost production.”Longer term, we can expect to see strong rates of growth in ourannual production and reserve base,” he said. Beginning in 1999,the company sees U.S. Lower 48 production growing at an annual rateof 4-6% from 1998 levels.

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