Kenneth B. Butler¹
(1) Unocal/Spirit 76, Sugar Land, TX

Abstract: The evolving role of independents—Examples from Unocal’s recent history and activity

The significant pace of change in the oil and gas industry has resulted in a dramatic focus on adapting and surviving throughout the entire industry – no one has been immune to the inexorable force of change.

Anticipating and responding to the industry restructuring, Unocal has taken a series of deliberate strategic steps to redefine and reposition itself for long-term success within the industry, including:

• The early 1997 sale of its downstream refining and marketing unit, which transformed it from a small major to the world’s largest independent.
• The adoption of a "resource-to-market" strategy which expanded its role in the energy value chain particularly in Southeast Asia, where Unocal is able to capitalize on its E&P presence and existing relationships.
• The revitalization in late 1997 of mature domestic operations, which focused the business on geographic basins where the company enjoys significant scale and local knowledge.
• The trade of non-core assets to significantly smaller, growth-oriented companies for equity, which allowed Unocal continued participation in the upside potential, while avoiding capital requirements needed to fuel its core activities in the Gulf of Mexico Shelf.
• A focus on selected world-wide Deepwater basins that leverage Unocal’s strengths and provide significant growth potential.

These steps and Unocal’s ability to leverage the company’s size, financial muscle and global technology expertise, allows the company to play alongside the majors to capture long-term growth opportunities that will set it apart from other independents.

AAPG Search and Discovery Article #90914©2000 AAPG Annual Convention, New Orleans, Louisiana