Unocal Corporation

Unocal Corporation was an American petroleum company whose operating history extended from the late nineteenth century into the early twenty-first century. Its principal operating predecessor, the Union Oil Company of California, was established in Santa Paula, California, in 1890 by Lyman Stewart, Thomas Bard, and Wallace Hardison through the combination of three independent Southern California oil businesses. The company developed as an alternative to the dominant Standard Oil system and built an early competitive position by connecting independent producers with Pacific Coast transportation and refining infrastructure. Union Oil expanded from its Southern California base into petroleum exploration, production, refining, marketing, natural gas, and international projects. It moved its headquarters to Los Angeles in 1901 and later established a Delaware holding-company structure. The business grew substantially through the acquisition of Pure Oil in 1965, which gave Union a broader national presence. During the following decades, it became a significant producer in southern Alaska and the Gulf of Mexico and operated the Union 76 fuel and motor-oil brand. Unocal also entered non-petroleum activities, including the acquisition of Molybdenum Corporation of America in 1977, whose assets included the Mountain Pass rare-earth mine. In 1983, the corporate structure was reorganized so that Union Oil Company of California operated as a subsidiary of the newly created Unocal Corporation. The new holding company became involved in major corporate-governance and takeover litigation in 1985, when Mesa Petroleum, controlled by T. Boone Pickens, attempted to acquire it. The Delaware Supreme Court decision in Unocal Corp. v. Mesa Petroleum Co. became an influential precedent concerning defensive measures adopted by corporate boards in response to takeover bids. Unocal operated across a number of international markets. Its activities in Indonesia began in 1961 and included an early production-sharing agreement, a contract model that later became important in international petroleum development. In Central Asia, Unocal participated in the CentGas consortium, which considered building a pipeline from the Caspian region through Afghanistan to Pakistan and the Indian Ocean. The project brought the company into contact with the Taliban in the late 1990s and generated widespread political and human-rights criticism, although the pipeline was never built by the consortium. Unocal withdrew from the Afghanistan project in 1998, citing regional instability, low oil prices, and cost concerns. The company also faced serious environmental and legal controversies. In 1969, an offshore blowout near Santa Barbara released a large volume of crude oil, intensifying public opposition to offshore drilling and environmental regulation. Long-running petroleum leaks affected Avila Beach and the Guadalupe-Nipomo Dunes in California. In Myanmar, villagers brought Doe v. Unocal, alleging forced labor, torture, rape, and killings connected to the Yadana gas project. The case ended in a settlement in 2005. Unocal gradually divested or restructured most of its downstream operations. In 1989, its Midwest refining and marketing assets were placed in the Uno-Ven joint venture with Petróleos de Venezuela, while its western U.S. refining and marketing operations and Union 76 brand rights were sold to Tosco in 1997. In 2005, Chevron agreed to acquire Unocal after a competitive process that also involved an unsolicited bid by CNOOC Limited. Unocal shareholders approved Chevron's final offer on August 10, 2005. The transaction valued Unocal at approximately US$17.9 billion and ended Unocal's existence as an independent public company. Its upstream petroleum assets were integrated into Chevron, while Union Oil Company of California continued to exist as a Chevron subsidiary.

Union Oil Company of California was founded in Santa Paula on October 17, 1890, by Lyman Stewart, Thomas Bard, and Wallace Hardison. The company brought together the Sespe Oil Company, Torrey Canyon Oil Company, and Hardison and Stewart Oil Company. Unlike the Standard Oil affiliates that dominated much of the American petroleum trade, the founding businesses were independent. Union Oil moved its headquarters to Los Angeles in 1901, while its original Santa Paula headquarters later became a historic site and museum. Around 1910, Union formed an arrangement with the Independent Producers Agency to construct pipelines from Kern County oil fields to Pacific Coast facilities. The arrangement gave smaller producers an alternative to railroad transportation and the purchasing terms associated with Standard Oil, while providing Union with a dependable crude-oil supply. The company's legal and financial structure evolved through the incorporation of Union Oil Company of Delaware in 1919 and Union Oil Associates in 1922. These entities helped preserve control of the California company during a period of consolidation in the international oil industry. Union acquired Central Petroleum Company from the Texas Company in 1920 and later expanded through the 1965 merger with Pure Oil. The Pure transaction broadened Union's geographic reach and helped transform it from a regional West Coast enterprise into a national petroleum company. Union subsequently became an important oil producer in southern Alaska and a major natural-gas producer in the Gulf of Mexico. In 1977, it acquired Molybdenum Corporation of America, gaining the Mountain Pass rare-earth mine among other assets. The company's environmental record became a significant part of its public history. In 1969, a blowout at Union's offshore Platform A in the Dos Cuadras field caused a major Santa Barbara Channel oil spill. The event contributed to the growth of modern environmental activism and to political support for stronger environmental review and offshore-drilling controls. Separately, petroleum leaks affected Avila Beach and the Guadalupe-Nipomo Dunes over several decades. Cleanup and habitat-restoration work continued after the leaks were recognized and investigated. In 1983, Union Oil Company of California became an operating subsidiary of a new Delaware holding company, Unocal Corporation. Two years later, Mesa Petroleum pursued a takeover of Unocal. The ensuing litigation resulted in a landmark Delaware Supreme Court decision that upheld the board's use of defensive measures under particular circumstances. The case became a central reference point in the development of American takeover law. Unocal expanded and contracted its downstream operations during the late twentieth century. In 1989, its Midwest refining and marketing assets were placed in Uno-Ven, a joint venture with Petróleos de Venezuela. The venture was dissolved in 1997, with PDVSA taking full ownership. Also in 1997, Unocal sold its western U.S. refining and marketing operations to Tosco, including most rights to the Union 76 brand. Tosco was later acquired by Phillips Petroleum, which subsequently became part of ConocoPhillips. Internationally, Union entered Indonesia in 1961 and participated in an early production-sharing arrangement. During the 1990s, Unocal became involved in the CentGas consortium, which considered a pipeline from the Caspian region through Afghanistan and Pakistan to the Indian Ocean. The company maintained an office in Kandahar and held discussions with Taliban representatives, while the project attracted criticism because of the Taliban's policies and the wider regional security environment. Unocal withdrew from the project in 1998. It was also involved in the Baku-Tbilisi-Ceyhan pipeline project as one of the consortium's major participants. Unocal's Myanmar operations led to Doe v. Unocal, in which villagers alleged that forced labor, torture, rape, and killings were connected with security arrangements for the Yadana gas project. The case raised questions about corporate responsibility for overseas human-rights abuses and ended in a 2005 settlement. Later that year, Chevron completed its acquisition of Unocal. The final transaction was valued at approximately $17.9 billion. CNOOC Limited had made a larger unsolicited proposal, but political and national-security concerns in the United States contributed to its withdrawal. Unocal no longer exists as an independent company, although Union Oil Company of California continues in forms associated with Chevron.

• 2005

  Acquired by Chevron

  [1]Unocal Corporationen.wikipedia.org

  Chevron completed its acquisition of Unocal, ending the company's independent corporate existence.

• 1998

  Withdrawal from Afghanistan pipeline project

  [1]Unocal Corporationen.wikipedia.org

  Unocal ended its participation in the CentGas effort after security, economic, and regional-political difficulties.

• 1997

  Western downstream assets sold

  [1]Unocal Corporationen.wikipedia.org

  Unocal sold its western U.S. refining and marketing operations and most Union 76 rights to Tosco.

• 1989

  Uno-Ven joint venture formed

  [1]Unocal Corporationen.wikipedia.org

  Unocal placed Midwest refining and marketing assets into a joint venture with Petróleos de Venezuela.

• 1985

  Mesa Petroleum takeover battle

  [2]Unocal Corp. v. Mesa Petroleum Co.en.wikipedia.org

  The contested takeover attempt led to the influential Unocal v. Mesa Petroleum corporate-law decision.

• 1983

  Creation of Unocal Corporation holding company

  [1]Unocal Corporationen.wikipedia.org

  Union Oil Company of California became an operating subsidiary of a new Delaware-based Unocal Corporation.

• 1977

  Acquisition of Molybdenum Corporation of America

  [1]Unocal Corporationen.wikipedia.org

  Unocal acquired the company later known as Molycorp, including the Mountain Pass rare-earth mine.

• 1969

  Santa Barbara oil spill

  [1]Unocal Corporationen.wikipedia.org

  A blowout at offshore Platform A caused a major oil release and became a landmark environmental controversy.

• 1965

  Merger with Pure Oil

  [1]Unocal Corporationen.wikipedia.org

  The merger gave Union Oil a broader national operating footprint.

• 1961

  Entry into Indonesia

  [1]Unocal Corporationen.wikipedia.org

  Union entered Indonesia and participated in an early production-sharing contract arrangement.

• 1901

  Headquarters moved to Los Angeles

  [1]Unocal Corporationen.wikipedia.org

  Union Oil relocated its headquarters from Santa Paula to Los Angeles as the company expanded.

• 1890

  Union Oil Company of California founded

  [1]Unocal Corporationen.wikipedia.org

  Lyman Stewart, Thomas Bard, and Wallace Hardison formed Union Oil in Santa Paula, California, by combining three independent oil companies.

Historically positioned as an independent American petroleum producer and marketer with a strong West Coast identity, broad upstream operations, the Union 76 consumer brand, and international exploration interests.

• Upstream petroleum · 1890

  Crude oil

  Crude-oil exploration and production formed the core of Union Oil and Unocal's business. Operations developed from Southern California fields into projects in Alaska, the Gulf of Mexico, Indonesia, and other international regions.

• Upstream petroleum

  Natural gas

  Unocal became a significant natural-gas producer, particularly through Gulf of Mexico operations and international projects such as the Yadana gas development in Myanmar.

• Fuel and motor oil

  Union 76

  Union 76 was Unocal's best-known consumer-facing fuel and motor-oil brand. It had a strong West Coast identity, extensive sports sponsorships, and served as the official fuel and motor oil of NASCAR until the end of the 2003 season.

• Mining · 1977

  Rare-earth minerals

  Through its 1977 acquisition of Molybdenum Corporation of America, Unocal gained the Mountain Pass mine, historically one of the world's leading sources of rare-earth elements.

• 2005

  Doe v. Unocal human-rights settlement

  Burmese villagers sued Unocal over alleged forced labor, rape, torture, and killings linked to the Yadana gas project. The case ended in a settlement that provided compensation to plaintiffs.

  Source

• 1997

  Controversy over Taliban engagement

  Unocal's negotiations with the Taliban and its presence in Afghanistan during the CentGas pipeline effort generated criticism concerning the company's dealings with the Taliban and allegations about broader political and security relationships. The cited material does not establish that Unocal directly financed or armed the Taliban.

  Source

• 1996

  Avila Beach petroleum contamination

  Leaks from oil pipelines beneath Avila Beach persisted for decades and contaminated local soil. Cleanup required extensive excavation and remediation after the contamination was identified.

  Source

• 1994

  Guadalupe-Nipomo Dunes diluent leaks

  Leaks of petroleum diluent from pipelines affected the Guadalupe-Nipomo Dunes and nearby waters over several decades. The contamination was described as California's largest oil spill by volume, and restoration work continued after the mid-1990s.

  Source

• 1969

  Santa Barbara Channel oil spill

  A blowout at Union Oil's offshore Platform A released an estimated 80,000 to 100,000 barrels of oil into the Santa Barbara Channel. The disaster generated widespread criticism and helped accelerate environmental regulation and opposition to offshore drilling.

  Source

Read more

• 1960Major Burnham Bowling Trophy sponsorship

  United States

  Union Oil supported the California bowling event associated with the Boy Scouts of America and named for Major Frederick Russell Burnham. The sponsorship formed part of Union Oil's long-running community and sporting involvement in California.

  Outcome. The sponsorship formed part of Union Oil's long-running community and sporting involvement in California.

  Source
• 1958Los Angeles Dodgers sponsorship

  United States

  Union 76 became an early sponsor of the Los Angeles Dodgers after the team moved from Brooklyn, and its logo became highly visible at Dodger Stadium. The stadium retained prominent 76 visual elements for many years, although the former stadium service station no longer operates as a fuel station.

  Outcome. The stadium retained prominent 76 visual elements for many years, although the former stadium service station no longer operates as a fuel station.

  Source
• 1948Union 76 NASCAR sponsorship

  United States

  The Union 76 brand became associated with NASCAR as the sport's official fuel and motor oil from its inaugural season through 2003, giving the brand extensive motorsport visibility. The official designation ended after the 2003 season when other brands took over the fuel and motor-oil roles.

  Outcome. The official designation ended after the 2003 season when other brands took over the fuel and motor-oil roles.

  Source

• 2005

  Accepted Chevron acquisitionM&A

  Background

  Chevron made an initial offer, while CNOOC Limited later submitted an unsolicited competing proposal that faced political opposition in the United States.

  Action taken

  Unocal agreed to Chevron's improved offer, which shareholders approved on August 10, 2005.

  Aftermath

  Unocal ceased to exist as an independent company and its principal petroleum operations were integrated into Chevron.

  Acquisition value. US$17.9 billion (2005 acquisition completed August 10, 2005)

  • CNOOC Limited — CNOOC submitted an unsolicited competing bid of approximately US$18.5 billion but withdrew it after political and national-security opposition in the United States.

  Source

• 1998

  Withdrew from the CentGas pipeline projectStrategy

  Background

  The proposed Trans-Afghanistan pipeline faced security problems, regional political instability, low oil prices, and cost pressures.

  Action taken

  Unocal first suspended work and then completely withdrew from the project in December 1998.

  Aftermath

  The consortium did not build the proposed pipeline during Unocal's participation.

  Source

• 1997

  Sold western refining and marketing operationsStrategy

  Background

  Unocal was reducing its downstream exposure and concentrating on other parts of the petroleum business.

  Action taken

  The company sold its western U.S. refining and marketing operations, including most Union 76 rights, to Tosco Corporation.

  Aftermath

  The Union 76 brand moved through subsequent downstream ownership changes involving Phillips Petroleum and ConocoPhillips.

  Source

• 1989

  Created Uno-Ven refining joint ventureStrategy

  Background

  Unocal sought to restructure its Midwest refining and marketing operations.

  Action taken

  It contributed those assets to a 50-50 joint venture with Petróleos de Venezuela.

  Aftermath

  The venture ended in 1997, when PDVSA received full ownership and many stations were converted to the Citgo system.

  Source

• 1985

  Defended against Mesa Petroleum takeover attemptOther

  Background

  Mesa Petroleum, controlled by T. Boone Pickens, pursued control of Unocal.

  Action taken

  Unocal adopted takeover defenses that were challenged in court.

  Aftermath

  The Delaware Supreme Court upheld the defensive approach under the circumstances, creating a major corporate-law precedent.

  Source

• 1983

  Adopted a holding-company structureStrategy

  Background

  Union Oil's expanding national and international operations required a broader corporate structure.

  Action taken

  The company placed Union Oil Company of California beneath a new Delaware-based holding company named Unocal Corporation.

  Aftermath

  Union Oil remained the principal operating entity while Unocal became the public corporate parent.

  Source

1. 1Unocal Corporationen.wikipedia.org
2. 2Unocal Corp. v. Mesa Petroleum Co.en.wikipedia.org
3. 3Doe v. Unocal Corp.en.wikipedia.org