I am using the REPLACE function in oracle to replace values in my string like;
REPLACE
SELECT REPLACE(\'THE NEW VALUE IS #VAL1#\',\'#VAL1#\',\'55\') fr
In case all your source and replacement strings are just one character long, you can simply use the TRANSLATE function:
TRANSLATE
SELECT translate('THIS IS UPPERCASE', 'THISUP', 'thisup') FROM DUAL
See the Oracle documentation for details.