ExxonMobil Subsea Projects W. Africa Development Challenges

1. ExxonMobil Subsea Projects W. Africa Development Challenges Subsea UK June 1, 2006 Dave C. Lucas

2. Presentation Outline • ExxonMobil Subsea History & Trends • ExxonMobil West Africa Project Highlights/Outlook • Angola • Nigeria • Subsea Systems • Building Blocks • Future Opportunities • Subsea Equipment Challenges • Operability & integrity – reliability through life cycle • Management of the basics • West Africa Execution Challenges • Local content

3. 1983 1992 ExxonMobil Offshore Technology - A Long Term Commitment Industry’s first compliant tower ExxonMobil’s first major GBS 1980 1976 ExxonMobil’s first FPSO Industry’s first diverless subsea template ExxonMobil’s first TLP • Track record for offshore innovation • Focus on fundamentals to ensure integrity and cost effectiveness • Ability to apply research and add value to deepwater developments 1975 1960s - 1990s Industry’s first iceberg resistant GBS Industry record deepwater drilling 1997 (2004-2006) 1940s - 1970s Platform design and wave force calibration Industry’s deepest water depth DDCV Industry’s largest FPSO’s Kizomba A & B 2000

4. ExxonMobil’s Move to Deeper Water ‘01 ‘47 ‘62 ‘76 ‘83 ‘89 ‘93 ‘00 ‘03 ‘04 ‘05 ‘06 ‘08 TLP FPSO Grand Isle- GOM 50 ft West Delta- GOM 168 ft Angola Xikomba 4450 ft EPS-FPSO/ SS Angola Kizomba-C 2400 ft FPSO/SS Angola Kizomba-B 3600 ft FPSO/TLP Hoover/ Diana-GOM 4800 ft Hondo CA 850 ft Lena GOM 1000 ft Harmony CA 1200 ft Zinc-SS GOM 1480 ft Nigeria Erha 3600 ft FPSO/SS Angola Kizomba-A 3900 ft FPSO/TLP Mica-GOM 4350 ft SS Marshall Madison-GOM 4850 ft

5. ExxonMobil Subsea Business Trends Production by Resource Type World-wide portfolio of subsea projects • Subsea portfolio is expected to double within the next 5 years – primarily driven by developments in West Africa • Increasing contribution from subsea volumes, primarily deepwater • Field locations remote from infrastructure, operating requirements more demanding • High rate wells, significant volumes increasing need for reliability focus

6. Integrated Subsea Systems • Utilize available designs, ensure compatible interfaces • Migrate toward standard components: • minimize project specific engineering • improve reliability • enable prestocking of long lead components • program focus, provide schedule and execution flexibility • minimise project management • Integrate installation activities to capitalize on vessel synergies • Use flexible installation methods to enable optimum use of drilling rigs

7. High Impact New Technology Opportunities • Multiphase flowmeters to replace test lines • Drill-thru trees • Batch setting execution opportunities • Alternate flowline & well jumper connection systems • Single flowline tiebacks – require new hydrate management strategies • More effective insulation materials • Steel Catenary Risers from turret moored vessels • Subsea processing concepts (multiphase pumps, separation, seawater injection) Drill-Through Tree

8. Subsea Challenges – Real Life Examples Smooth-Bore Flexible Riser Failure Control Module – Electronics Failures CO2 Corrosion in Pipelines Hose Failure on Hydraulic Flying Lead

9. Subsea Challenges – Operability and Integrity • Operability and integrity impact opex and downtime • Flow assurance challenges • Integrity of subsea and pipeline systems • Subsea valve integrity • Control system integrity • Aging equipment Subsea Production Choke Failure Control Fluid Leak from Subsea Umbilical Termination Assembly

10. The Challenge The Challenge OPEX Commissioning and start-up (infant mortality) Production build-up through to early decline Mid to late life Abandonment Subsea Equipment Failures Challenge – Ensure reliability through entire field life cycle Need to flatten out the traditional reliability “bathtub curve”

11. Improved Reliability - Management of The Basics • Critical elements for achieving reliable system performance: • Standardization of designs – quit tinkering • Thorough qualification of equipment to actual service conditions, including installation and full life cycle operation • Management of design changes • QA/QC during manufacture, especially materials and welding • Active management of supply chain i.e. sub-suppliers • Application of appropriate company standards, particularly where industry standards are inadequate or do not exist

12. West Africa – Current Local Content Scope • Subsea local content scope includes fabrication and assembly of parts typically made elsewhere – manifolds, piles, FLET’s, jumpers, umbilicals, pipeline welding & coating and insulation • In country ongoing support includes – logistics bases, receival & integration testing,catering, brownfield modifications, operations & maintenance personnel

13. West Africa – Local Content Challenges • Main barrier to increased local content is lack of local companies to provide wider range of oilfield services to meet growing demand • What does West Africa need to meet growing local content demands ? • All levels of basic oilfield services including machine shops and specialty welding • Maintain inventory of oilfield materials, fittings and rental equipment • More fabrication yards, docks and assembly plants • All levels of post first oil support services including jumper & flying lead fabrication, commissioning expertise and equipment • Light well intervention capability - eliminate mobilization, rapid response • ROV maintenance expertise - improve reliability, build local expertise

14. Subsea Success - Business Case • Cost of wet tree systems is outpacing competing development alternatives • Growth driven by rapidly escalating costs for: • Mobile Offshore Drilling Rigs (MODUs) • Installation vessels • Subsea equipment • Subsea trend toward greater rates / recovery per well-bore to meet commercial metrics • Trends are for more marginal fields in remote locations • Impacts may be fewer subsea wells, fewer developments “Win – Win” solution for subsea suppliers is lower overall SURF costs to sustain greater industry activity

15. West Africa – What is needed for ExxonMobil portfolio ? • Reliable equipment – standardized designs, quality components, accelerated schedules/procurement • Flexibility for installation methods, ability to use smaller vessels versus drilling rigs where possible • Adequate qualification to actual full field life service conditions • Management of subsupplier quality throughout procurement chain • Build inroads into local content, all aspects of basic oilfield capability and services • Partnerships with approved local companies

16. ExxonMobil Development Company Subsea Contacts • Subsea Equipment – Dave Lucas • dave.c.lucas@exxonmobil.com • Flowlines & Flow Assurance – Mike Cook • mike.f.cook@exxonmobil.com • Risers – Jim Zimmerman • jim.j.zimmerman@exxonmobil.com Questions ? Corporate Separateness Notice Nothing in this presentation is intended to override the corporate separateness of local entities. Working relationships discussed in this material do not necessarily represent a reporting connection, but may reflect a functional guidance, stewardship, or service relationship. Where shareholder consideration of a local entity matter is contemplated by this material, responsibility for action remains with the local entity. Exxon Mobil Corporation has numerous affiliates, many with names that include ExxonMobil, Exxon, Esso and Mobil. For convenience and simplicity in this presentation, those terms and terms like corporation, company, our, we and its are sometimes used as abbreviated references to specific affiliates or affiliate groups. Abbreviated references describing global or regional operational organizations and global or regional business lines are also sometimes used for convenience and simplicity. Similarly, ExxonMobil has business relationships with thousands of customers, suppliers, governments, and others. For convenience and simplicity, words like venture, joint venture, partnership, co-venturer, and partner are used to indicate business relationships involving common activities and interests, and those words may not indicate precise legal relationships.

17. ExxonMobil Deepwater Experience West Delta 73 - 1974 Central Cormorant - 1981 Seahorse/Tarwhine - 1990 Snorre - 1992 Zinc - 1993 Zafiro/Topacio - 1997 Balder - 1999 Diana - 2000 Girassol - 2001 Kizomba A - 2004 Hutton - 1984 Snorre - 1992 Ram - 1997 Ursa - 1999 Kizomba A - 2004 • Track record for innovation in deepwater • Design integrity and cost reduction through application of technical fundamentals Hondo - 1981 Zafiro - 1997 Balder - 1999 Jotun - 1999 Girassol - 2001 Xikomba - 2003 Kizomba A - 2004 Genesis - 1998 Diana/Hoover - 2000

18. ExxonMobil Operated Subsea Projects in W. Africa • Existing ExxonMobil Operated Subsea Production (May ’06) • Angola (9 production & 15 injection wells, 125 kbd) • Nigeria (7 production & 7 injection wells, 120 kbd) • Equatorial Guinea (50 production & 10 inj, 180 kbd) • Recently completed projects • Kizomba B in AB15 (record cycle time of 31 months) • Erha in OPL 209 • Projects currently underway • Kizomba C in AB15 (2 FPSO’s & 36 subsea wells) • Marimba in AB15 (4 well tieback to Kizomba A)

19. OPL 209/214 AB15 W. Africa ExxonMobil Operated Subsea Opportunities • Angola Block 15 discoveries • Bavuca • Clochas • Kakocha • Marimba North • Mavacola • Mbulumbumba • Reco Reco • Tchihumba • Vicango • Nigeria OPL 209 & 214 • Bosi • Uge