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Unocal Shareholders Back Myanmar Deals

Energy: Proposals critical of company's involvement in the country are soundly rejected.


Unocal shareholders cast a strong vote of support Monday for the company's effort to transform itself into a global energy player and overwhelmingly rejected two proposals critical of the company's controversial partnership with Myanmar.

While a group of 50 colorfully clad protesters kept up a steady chant outside Monday's annual meeting in Brea, Chairman and Chief Executive Roger Beach delivered an upbeat assessment of the "New Unocal," which has all but abandoned its California roots in the last year.

The biggest step was its $2-billion sale earlier this year of its domestic refineries and gas station network to Tosco to free up money to invest in more lucrative exploration operations abroad, particularly in Asia.

To make his point that Unocal is headed in the right direction, Beach highlighted the company's improved 1996 numbers: earnings of more than double the previous year's, an increase in shareholder value of 46% and record energy production.

"The challenge of the future is not finding the opportunities but deciding which ones to pursue," Beach said.

But the standing-room-only crowd heard a different interpretation from critics who accused the company of jeopardizing its long-term profitability by cozying up to dictators and profiting from forced labor, political repression and environmental abuse.

They were particularly critical of Unocal's participation in a $1.2-billion pipeline in Myanmar (formerly Burma), whose repressive military regime has been widely condemned for waging a war of terror against its political opponents.

Some also questioned Unocal's loyalty to the U.S., accusing the longtime California company of pursuing a "de-Americanization campaign."

The audience included at least a dozen former Unocal employees who had lost their jobs in the Tosco sale. While the new owner agreed to keep all but 100 of Unocal's union jobs, the employees are unhappy with their slimmed-down work force and the terms of their new contract.

Urban Showe, who was waving a protest sign outside Monday's meeting, was hired by Tosco. But the longtime member of the Oil, Chemical & Atomic Workers Union said he still felt betrayed by Unocal's decision to spend its money in such political hot spots as China, Azerbaijan and Indonesia.

"They gave up on American labor and took all their jobs overseas," said the 28-year-old refinery operator from Long Beach.

On Monday, the company announced it was joining an oil exploration project off the coast of Brunei in the South China Sea. Numerous other big U.S. oil companies are following similar overseas strategies, a response to dwindling reserves and shrinking profit margins at home.

While the two Myanmar shareholder resolutions were soundly defeated Monday, Joe Drexler, a spokesman for the oil workers union, which backed one of the measures, said he was "ecstatic" to have gotten enough votes--more than 3%--to get the measures reintroduced next year.

One resolution required Unocal to assess the financial cost of the growing opposition to its business in Myanmar. The other called for investigation into charges that the state-owned Myanma Oil and Gas Enterprise, a Unocal partner in Myanmar, is involved in the heroin trade.

Beach said he and other top Unocal executives could not speak freely on Myanmar because they are defendants in one of two pending federal lawsuits. The plaintiffs are attempting to hold Unocal responsible for human rights abuses allegedly committed by Myanmar's leaders.

Unocal's chief assured his audience that the lawsuits and other anti-Myanmar measures--such as boycotts and selective purchasing laws--were "without merit" and had only cost the company $1 million last year in lost business or legal fees.

Beach also reiterated that the Clinton administration's recent ban on new investment by U.S. companies in Myanmar would not halt the company's present projects, including the Yadana gas pipeline, a second energy project for Myanmar and an additional offshore exploration project.

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