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Reuters: Uncoal Will Proceed With
- Subject: Reuters: Uncoal Will Proceed With
- From: ktint@xxxxxxxxxxxxx
- Date: Wed, 23 Apr 1997 11:30:00
Subject: Reuters: Uncoal Will Proceed With Yadana Project Anyway
INTERVIEW-Unocal Looks Abroad for Projects
It Will Proceed With Yadana Project Anyway
Reuters, Tuesday, April 22, 1997 at 09:38
By Deborah Charles
BANGKOK, April 22 (Reuter) - American oil company Unocal Corp
(NYSE:UCL) is moving ahead on its new strategy of focusing on high-return
operations which are mostly located in Asia and Latin America, the chief
executive said on Tuesday.
Roger Beach, also the chairman of the U.S oil exploration and
production giant, told Reuters in an interview that the company was
almost completely out of its previous business in refining and marketing
and ready to roll out the "new Unocal."
"We've disposed of our low-return assets by selling off our
refining and marketing on the west coast and we're about to close by the
end of this month our UNO-VEN (refining and marketing) joint venture
transaction," he said. "That gets us out of refining and marketing
The "new Unocal" will concentrate on exploration and production,
mainly in Asia, parts of Latin America and the U.S. Gulf of Mexico,
Unocal said recently.
Beach said after Unocal gets out of refining and marketing it
will have about $1.3 billion to spend, part of which will be used to pay
off debt and buy back shares.
Beach said Unocal was already in the process of retiring about
$800 million of debt, and it had begun buying back some shares. The board
has approved the company can buy back up to $400 million of its common
stock, on an opportunity basis, over the next two years.
Unocal has said it planned to spend nearly two-thirds of its
$1.34 billion capital spending in 1997 on high-return overseas projects.
The company is looking to invest in projects that offer
potential returns of about 15 to 20 percent a year return on assets.
He said the change in policy will help Unocal grow. He said the
company expects to see about a five to 10 percent growth in 1998 cash
flow over that of 1997.
Beach said the company was looking to make new investments in
the central and southeast Asian region. He would not give details on what
sort of investments might be made.
Places Unocal is pursuing opportunities in includ southeast
China, India, Pakistan, Kazhakstan, Brunei, Vietnam and southern Latin
America, Beach said.
Unocal is already involved in a variety of projects in Asia,
with several due to come on stream in the next few years.
One of the largest projects is a joint venture gas project with
France's Total SA (SBF:TOTF), Thailand's state-owned PTTEP International
Ltd and Burma's state-onwed Myanmar Oil and Gas Enterprise.
The venture is to build a $1.2 billion pipeline to deliver gas
from the Burmese Yadana field in the Andaman Sea. The 416-mile pipeline
will lead to a 2,800-megawatt electric power plant southwest of Bangkok.
Beach said the project is on schedule with pipeline due to be
buried by the end of May. In July 1998 the offshore platforms are due to
begin producing natural gas that will gradually increase to peak
production of 650 million cubic feet per day of gas for domestic use and
Beach said a U.S. decision on Tuesday to impose economic
sanctions on Burma would not affect the company's decision to invest in
"We are terribly disapointed," he said. "(But) this will not
change Unocal's strategic direction in investing in southeast and central
-- Bangkok newsroom (662) 652-0642
Copyright 1997, Reuters News Service