UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 24, 2008
Exxon Mobil Corporation
(Exact name of registrant as specified in its charter)
         
New Jersey   1-2256   13-5409005
(State or other jurisdiction   (Commission   (IRS Employer
of incorporation)   File Number)   Identification No.)
     
5959 LAS COLINAS BOULEVARD, IRVING, TEXAS
(Address of principal executive offices)
  75039-2298
(Zip Code)
Registrant’s telephone number, including area code: (972) 444-1000
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 


 

Item 7.01 Regulation FD Disclosure
Item 2.02 Results of Operations and Financial Condition
The following information is furnished pursuant to both Item 7.01 and Item 2.02.
The Registrant hereby furnishes the information set forth in its 2007 Financial and Operating Review, a copy of which is included as Exhibit 99.
ExxonMobil makes available (not incorporated into this report) a “PDF” version of the 2007 Financial and Operating Review on its website at exxonmobil.com, which some users may find more readable. Hard copies are also available on request from Exxon Mobil Corporation’s Office of Investor Relations at 972-444-1000. Materials on ExxonMobil’s website are not part of or incorporated by reference in this Form 8-K.

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SIGNATURE
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
         
  EXXON MOBIL CORPORATION
 
 
March 24, 2008  By:   /s/ Patrick T. Mulva    
    Name:   Patrick T. Mulva   
    Title:   Vice President, Controller and
Principal Accounting Officer 
 

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INDEX TO EXHIBITS
     
Exhibit No.   Description  
 
99
  Exxon Mobil Corporation’s 2007 Financial and Operating Review.

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Table of Contents

(EXXON MOBIL LOGO)
2007 Financial & Operating Review

 


 

ON THE COVER
ExxonMobil is uniquely positioned in the industry due to the depth and breadth of our technical and operational capabilities in our Upstream, Downstream, and Chemical businesses. We have a world-class portfolio of Upstream projects, including the East Area NGL II project in Nigeria (top left). Through the use of ExxonMobil technology, we have been able to increase the size of liquefied natural gas (LNG) ships, such as the Q-Flex LNG ship (center right), and significantly reduce shipping costs. Our Downstream portfolio includes world-class facilities with significant conversion capacity — for example, the delayed coker at our Baytown, Texas, refinery (center left) — that allow us to upgrade heavy crudes into higher-value products. ExxonMobil’s integrated chemical plant in Singapore (lower right) will be expanded through the addition of a second world-scale ethylene steam cracker and derivative units to meet the growing demand for products in Asia.
CONTENTS
         
Corporate Overview
    1-17  
         
    18-21  
         
    22-28  
         
    29  
         
    30-67  
         
    68-83  
         
    84-93  
         
    94-97  
         
    98  
         
  Inside Back Cover  
The term Upstream refers to exploration, development, production, and gas and power marketing. Downstream refers to the refining and marketing of petroleum products such as motor fuels and lubricants.
Projections, targets, expectations, estimates, and business plans in this report are forward-looking statements. Actual future results, including demand growth and energy mix; capacity growth; the impact of new technologies; capital expenditures; project plans, dates, and capacities; production rates and resource recoveries; and efficiency gains and cost savings could differ materially due to, for example, changes in oil and gas prices or other market conditions affecting the oil and gas industry; reservoir performance; timely completion of development projects; war and other political or security disturbances; changes in law or government regulation; the actions of competitors; unexpected technological developments; the occurrence and duration of economic recessions; the outcome of commercial negotiations; unforeseen technical difficulties; and other factors discussed in this report and in Item 1A of ExxonMobil’s most recent Form 10-K.
Definitions of certain financial and operating measures and other terms used in this report are contained in the section titled “Frequently Used Terms” on pages 94 through 97. In the case of financial measures, the definitions also include information required by SEC Regulation G to the extent we believe applicable.
“Factors Affecting Future Results” and “Frequently Used Terms” are also posted on our Web site and are updated from time to time.
Prior years’ data have been reclassified in certain cases to conform to the 2007 presentation basis.

 


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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  1
Meeting the world’s fundamental and growing need for energy is a massive undertaking.
Providing reliable, affordable energy supplies in a responsible manner enables global economic progress and improves the quality of life for people around the world. ExxonMobil remains uniquely positioned to take on the key challenges facing our industry today:
  § Safely and reliably producing oil, natural gas, and hydrocarbon products
 
  § Finding and developing new supplies and products to bring to market
 
  § Maximizing resource and asset value
 
  § Improving energy efficiency and minimizing environmental impacts
 
  § Developing the next generation of scientists and engineers

What does it take to meet these challenges?
It requires an understanding of the long-term nature of our business. It requires a consistent, systematic business model with the flexibility to adapt to changing business conditions. It requires a commitment to invest in and develop people, innovative technology, and projects that grow shareholder value. It requires a company of leaders with an unwavering commitment to integrity, operational excellence, and community development.
ExxonMobil has taken on these challenges for over 125 years while continuing to deliver superior financial results to our shareholders.
(PHOTO OF REX W. TILLERSON)

 


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2  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
Fundamentals of Our Approach:
Consistency, Integrity, Discipline, Reliability, and Ingenuity
FINANCIAL HIGHLIGHTS
                                         
(millions of dollars, unless noted)   2007     2006     2005     2004     2003  
 
Sales and other operating revenue(1)(2)
    390,328       365,467       358,955       291,252       237,054  
Net income
    40,610       39,500       36,130       25,330       21,510  
Cash flow from operations and asset sales(3)
    56,206       52,366       54,174       43,305       30,788  
Capital and exploration expenditures(3)
    20,853       19,855       17,699       14,885       15,525  
Cash dividends to ExxonMobil shareholders
    7,621       7,628       7,185       6,896       6,515  
Common stock purchases (gross)
    31,822       29,558       18,221       9,951       5,881  
Research and development costs
    814       733       712       649       618  
Cash and cash equivalents at year end(4)
    33,981       28,244       28,671       18,531       10,626  
Total assets at year end
    242,082       219,015       208,335       195,256       174,278  
Total debt at year end
    9,566       8,347       7,991       8,293       9,545  
Shareholders’ equity at year end
    121,762       113,844       111,186       101,756       89,915  
Average capital employed(3)
    128,760       122,573       116,961       107,339       95,373  
Share price at year end (dollars)
    93.69       76.63       56.17       51.26       41.00  
Market valuation at year end
    504,220       438,990       344,491       328,128       269,294  
Regular employees at year end (thousands)
    80.8       82.1       83.7       85.9       88.3  
 
 
                       
KEY FINANCIAL RATIOS
                                         
    2007     2006     2005     2004     2003  
 
Net income per common share (dollars)
    7.36       6.68       5.76       3.91       3.24  
Net income per common share – assuming dilution (dollars)
    7.28       6.62       5.71       3.89       3.23  
Return on average capital employed(3) (percent)
    31.8       32.2       31.3       23.8       20.9  
Net income to average shareholders’ equity (percent)
    34.5       35.1       33.9       26.4       26.2  
Debt to capital(5) (percent)
    7.1       6.6       6.5       7.3       9.3  
Net debt to capital(6) (percent)
    (24.0 )     (20.4 )     (22.0 )     (10.7 )     (1.2 )
Ratio of current assets to current liabilities
    1.47       1.55       1.58       1.40       1.20  
Fixed charge coverage (times)
    49.9       46.3       50.2       36.1       30.8  
 
     
(1)   Sales and other operating revenue includes sales-based taxes of $31,728 million for 2007, $30,381 million for 2006, $30,742 million for 2005, $27,263 million for 2004, and $23,855 million for 2003.
 
(2)   Sales and other operating revenue includes $30,810 million for 2005, $25,289 million for 2004 and $20,936 million for 2003 for purchases/sales contracts with the same counterparty. Associated costs were included in Crude oil and product purchases. Effective January 1, 2006, these purchases/sales were recorded on a net basis with no resulting impact on net income.
 
(3)   See Frequently Used Terms on pages 94 through 97.
 
(4)   Excluding restricted cash of $4,604 million in 2006, 2005, and 2004.
 
(5)   Debt includes short- and long-term debt. Capital includes short- and long-term debt, shareholders’ equity, and minority interests.
 
(6)   Debt net of cash and cash equivalents, excluding restricted cash.

 


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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  3

BUSINESS MODEL
ExxonMobil has a consistent and straightforward business model that combines our long-term perspective, disciplined approach to capital investment, and focus on operational excellence to grow shareholder value. We identify, develop, and execute projects using best practices that ensure project returns will be resilient over a range of economic scenarios. We operate our facilities using proven management systems to achieve operational excellence. As a result, we are able to generate more income from a highly efficient capital base, as demonstrated by our superior return on capital employed. Our successful execution of this model delivers industry-leading financial and operating results that grow shareholder value.
(LOGO)


ExxonMobil’s superior performance demonstrates the strength of our long-term business model.
Superior 2007 Results
  Best-ever lost-time incident rate for our combined employee and contractor workforce
  Record earnings of $40.6 billion, with record performance in each of our business functions
  Annual dividend per share growth of 7 percent versus 2006, the 25th consecutive year of dividend per share increases
  Total shareholder distributions of $35.6 billion, an increase of $3 billion versus 2006
  Industry-leading return on average capital employed of 32 percent
  Start-up of seven major Upstream projects
  Total liquids production and natural gas production available for sale of 4.2 million oil-equivalent barrels per day
  Replaced 101 percent of production with proved oil and gas reserve additions of 1.6 billion oil-equivalent barrels,
   
including asset sales and the effect of the Venezuela expropriation, and excluding year-end price/cost effects
  Downstream and Chemical operating cost efficiencies and margin enhancements totaling $2 billion after tax
 
(GRAPH)
(GRAPH)
    (1) Reflects data through December 31, 2007.  
 
    (2) Royal Dutch Shell, BP, and Chevron values are calculated on a consistent basis with ExxonMobil, based on public information.  

 


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4  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
Business Strategies
ExxonMobil’s fundamental business strategies are key to achieving sustained, outstanding performance in all aspects of our business.   Consistency, integrity, discipline, reliability, and ingenuity provide the foundation for our business processes. ExxonMobil is able to meet the challenge of providing reliable, affordable energy in a responsible manner through the superior execution of our business strategies.
OPERATE IN A SAFE AND ENVIRONMENTALLY RESPONSIBLE MANNER
ExxonMobil’s commitment to safety begins with our senior management and is a core value held by our employees around the world. Our corporate culture drives us toward our goal of an incident-free workplace.
We conduct business in a manner that is compatible with the environmental and economic needs of the communities in which we operate. ExxonMobil is committed to continuous improvement in environmental performance with the goal of driving incidents with real environmental impact to zero.
UPHOLD HIGH STANDARDS
ExxonMobil adheres to all applicable laws, rules, and regulations as a minimum standard, and, when requirements do not exist, we apply responsible standards to our operations.
How we achieve results is as important as the results themselves. We choose the course of highest integrity in all of our business interactions. We believe that a well-founded reputation for high ethical standards, strong business controls, and good corporate governance is a priceless corporate asset.
Directors, officers, and employees must comply with our Standards of Business Conduct. This requirement is regularly reinforced by management.
PURSUE OPERATIONAL EXCELLENCE
Flawless operational performance is enabled through the use of management systems that ensure consistency and the development of best practices.
ExxonMobil has developed a wide range of management and operating systems that cover critical aspects of our business, including: ethics, safety, security, health, environmental performance, operations reliability, business controls, project investment and execution, energy efficiency, profit improvement, and external affairs. The disciplined application of these management and operating systems, deployed through our functional organization, has consistently delivered superior results.
INVEST WITH DISCIPLINE
The energy industry is a long-term business that requires decisions to be made with a time horizon that is measured in decades rather than months or years. We have a responsibility to our shareholders to ensure that each investment decision is made using a disciplined approach.
Our proven project management system incorporates best practices developed around the world. Emphasis on the early phases of concept selection and project execution results in investments that maximize resource and asset value.
Projects are tested over a range of economic scenarios to ensure that they are robust in a variety of business environments. Post investment, we complete a rigorous appraisal of major projects and incorporate learnings into future project planning and design. This approach ensures superior investment returns throughout the business cycle.
DIFFERENTIATE WITH PROPRIETARY TECHNOLOGY
Technology is and will remain key to meeting the world’s growing energy demand. Technological innovations allow the identification and economic development of challenged resources, optimization of operating unit performance, and development of high-performance products.


(PERFORMANCE GRAPH)
(1) Royal Dutch Shell, BP, and Chevron values are estimated on a consistent basis with ExxonMobil, based on public information.
(PERFORMANCE GRAPH)

 


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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  5
ExxonMobil has a long-standing commitment to the development of innovative proprietary technology. We have a wide array of research programs designed to meet the needs identified in our functional businesses. Over the past five years, we have invested about $3.5 billion in research and development. As new technologies are developed, our global functional organization enables rapid deployment and value capture.
OPTIMIZE RESULTS THROUGH FUNCTIONAL DIVERSITY AND INTEGRATION
ExxonMobil’s business portfolio and level of global integration are unique in the industry. Our portfolio of assets provides advantages in scale, geographic diversity, and business mix, and mitigates risks that arise from changes in commodity prices and business cycles.
We are able to capture value through superior opportunity identification, implementation of best practices, advantaged technology, and operational optimization. The combination of our global scale and integration across our businesses gives ExxonMobil a competitive advantage that is difficult to replicate.
INCREASE EFFICIENCY THROUGH OUR GLOBAL FUNCTIONAL ORGANIZATION
ExxonMobil’s global functional organization is integral to our ongoing success. It drives senior management involvement in all major decisions and ensures that our business processes are consistent with our strategic goals. Our structure enables effective transfer of knowledge, demonstrated by our ability to rapidly deploy people and technology to support business activities around the world.
ATTRACT AND RETAIN EXCEPTIONAL PEOPLE
Delivering outstanding performance requires exceptional people. The quality of our workforce is a competitive advantage. We focus on merit-based, long-term career development for our employees. ExxonMobil is committed to maintaining a diverse workforce and a supportive work environment that is characterized by open communication, trust, and fair treatment. We recruit talented people from around the world and provide them with formal training and a broad range of experiences to develop them into the next generation of company leaders.
ENHANCE COMMUNITY DEVELOPMENT
ExxonMobil believes in creating a positive and lasting social impact in the countries in which we operate. Our operations strengthen economic growth through investment, employment, and the purchase of local goods and services.
We focus on supporting community programs that reduce barriers to development. These strategic community investment activities include enhancing health conditions, improving education, and providing increased opportunities for women and girls. These investments help to alleviate poverty, promote social progress, and increase economic growth.
This business strategy benefits the communities in which we operate and helps ensure a sustainable operating environment for our business.
MAINTAIN FINANCIAL STRENGTH
ExxonMobil’s financial position remains unparalleled within our industry and when compared to nearly every company in the world. Moody’s and Standard & Poor’s recognize our superior financial strength by assigning the highest credit rating to our financial obligations. ExxonMobil is one of very few public companies that has maintained the highest credit rating over the past several decades.
Our financial strength gives us the flexibility to pursue and finance attractive investment opportunities around the world. Host governments and project partners recognize our unique position and benefit from the financial strength and expertise we bring to the development of resources. This competitive advantage translates into superior returns for ExxonMobil’s shareholders.


(PERFORMANCE GRAPH)
(PERFORMANCE GRAPH)
(1) Net cash from operating and investing activities, excluding changes in restricted cash and cash equivalents, and marketable securities (see page 17).

 


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6  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
Shareholder Information
ExxonMobil’s core objective is to deliver long-term growth in shareholder value. Over the past five years, we have distributed nearly $118 billion to our shareholders through quarterly dividend payments and share purchases to reduce shares outstanding. In 2007 our total shareholder distributions were $36 billion, including $28 billion of share purchases.
In 2007 ExxonMobil raised annual dividends to our shareholders to $1.37 per share, an increase of 7 percent versus the previous year. We have paid a dividend each year for more than a century and have increased annual dividends per share in each of the last 25 years.
ExxonMobil reduced the number of shares outstanding by 20 percent over the last five years through our flexible share purchase program. Reducing shares outstanding increases the percent ownership of the company that each remaining share represents and contributes to increased earnings and cash flow per share.
DIVIDEND AND SHAREHOLDER RETURN INFORMATION
                                         
    2007     2006     2005     2004     2003  
 
Net income per common share (dollars)
    7.36       6.68       5.76       3.91       3.24  
Net income per common share – assuming dilution (dollars)
    7.28       6.62       5.71       3.89       3.23  
 
Dividends per common share (dollars)
                                       
First quarter
    0.32       0.32       0.27       0.25       0.23  
Second quarter
    0.35       0.32       0.29       0.27       0.25  
Third quarter
    0.35       0.32       0.29       0.27       0.25  
Fourth quarter
    0.35       0.32       0.29       0.27       0.25  
 
Total
    1.37       1.28       1.14       1.06       0.98  
 
Dividends per share growth (annual percent)
    7.0       12.3       7.5       8.2       6.5  
 
Number of common shares outstanding (millions)
                                       
Average
    5,517       5,913       6,266       6,482       6,634  
Average – assuming dilution
    5,577       5,970       6,322       6,519       6,662  
Year end
    5,382       5,729       6,133       6,401       6,568  
 
Cash dividends paid on common stock (millions of dollars)
    7,621       7,628       7,185       6,896       6,515  
Cash dividends paid to net income (percent)
    19       19       20       27       30  
Cash dividends paid to cash flow(1) (percent)
    15       15       15       17       23  
 
Total return to shareholders (annual percent)
    24.3       39.2       11.7       27.9       20.5  
 
Market quotations for common stock (dollars)
                                       
High
    95.27       79.00       65.96       52.05       41.13  
Low
    69.02       56.42       49.25       39.91       31.58  
Average daily close
    83.23       65.35       58.24       45.29       36.14  
Year-end close
    93.69       76.63       56.17       51.26       41.00  
 
    (1) Net cash provided by operating activities.
 
(PERFORMANCE GRAPH)
(PERFORMANCE GRAPH)

 


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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  7
Safety, Health & Environment
ExxonMobil is committed to high standards of safety, security, health, and environmental care. We continue to deliver results that demonstrate our commitment.
2007 HIGHLIGHTS
§   Best-ever lost-time incident rate for our combined employee and contractor workforce
 
§   Best-ever energy efficiency in refining and chemical operations
 
§   Greater than 15 percent reduction in spills from 2006
 
§   No spills from company-operated marine vessels
 
§   Reduction in greenhouse gas emissions
GUIDING PRINCIPLE
ExxonMobil complies with all applicable laws and regulations, and when laws and regulations do not exist, we apply responsible standards. We aim to drive the number of injuries, illnesses, and incidents with real environmental impact to zero. Our initiatives are supported by ongoing technology programs that include internal and external work by leading scientists. We believe ExxonMobil’s overarching commitment to achieving superior performance in safety, health, and the environment is closely linked to and reflected in the outstanding performance of all other aspects of our business. We manufacture essential commodities in a manner that preserves and protects health and safety and safeguards the environment.
Safety, health, and environmental risk is managed within a company-wide framework that we call OIMS — our Operations Integrity Management System. OIMS provides us with a disciplined, structured, and global approach to managing these risks. Because the system is used in our businesses and facilities worldwide, it enables us to measure progress and ensure management accountability for results in these areas. ExxonMobil developed OIMS more than 15 years ago, and it has been strengthened through several cycles of improvement. In 2003, among other changes, the security requirements were enhanced and a globally consistent environmental planning process was added. In 2007 OIMS was refined to extend expectations to include all office workers. We are pleased that in 2007, Lloyd’s Register Quality Assurance recognized OIMS as meeting all of the requirements of the Occupational Health and Safety Assessment Series for health and safety management systems (OHSAS 18001:1999), in addition to the International Organization for Standardization’s specification for environmental management systems (ISO 14001:2004).
RISK MANAGEMENT
We recognize that risks are inherent in our business and we take a disciplined, systematic approach to reducing these risks. The same rigor and discipline that underpin our investment programs are also used in our approach to managing our ongoing operations in the areas of safety, security, health, and the environment.
Our approach includes great emphasis on business continuity planning and emergency preparedness to enable timely and effective response to incidents. In 2007 we conducted six major regional emergency response drills in locations including Malaysia, Cyprus, Sakhalin Island in Russia, Bermuda, the Gulf of Mexico, and California. In addition, we conducted drills and workshops worldwide to validate the readiness of ExxonMobil affiliates to address a potential influenza pandemic.


(PERFORMANCE GRAPH)
    (1) Employee safety data from participating American Petroleum Institute companies (2007 industry data not available at time of publication).
(PICTURE)
ExxonMobil employees are trained to understand risks involved with their work environment and how to reduce them. Our industry-leading safety results reflect the success of our processes.

 


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8  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
SAFETY AND HEALTH
At ExxonMobil, safety and health in the workplace is a top priority. Based on careful analysis of incidents and risks, we continuously work to improve the safety and health of our employees and contractors. Since 2000 we have reduced our workforce lost-time incidents by an average of over 15 percent per year, and we are continuing that trend. We will not be satisfied until we have achieved a work environment in which Nobody Gets Hurt.
ExxonMobil maintains an active commitment to the communities in which we work. We believe that self-sustaining improvements in public health are a key enabler for broader economic and social gains. We incorporate workforce and community health considerations into project planning. The DeKastri Hospital was one of the hospitals that was upgraded as a result of the Sakhalin-1 community-based needs assessment. The DeKastri Hospital is now a preferred referral center for managing local medical emergencies in Khabarovsk Krai, Russian Far East.
(PICTURE)
The DeKastri Hospital is one of the hospitals that was upgraded to manage medical and surgical emergencies within the community.
ENVIRONMENT
ExxonMobil is committed to achieving excellent environmental performance in each of our businesses to Protect Tomorrow. Today. We aim to implement scientifically sound, practical solutions that consider environmental imperatives and the economic needs of the communities in which we operate. We have a clear set of expectations to guide our environmental practices. In addition to the consistent use of OIMS and careful adherence to all applicable laws and regulations, our business functions are expected to:
§   Deliver superior environmental performance, which will lead to competitive advantage;
§   Continually improve performance and drive incidents with real environmental impact to zero; and,
§   Achieve industry leadership in key environmental performance areas.
Our Corporate Environmental Aspects Guide enables comprehensive identification and risk-based assessment of environmental impacts. It provides consistent guidance to our operating facilities and design groups to identify and manage environmental risks — both episodic and cumulative risks.
Our Environmental Business Planning (EBP) process, contained within OIMS, is used by our businesses to update environmental targets and to establish improvement plans. The EBP process helps our businesses integrate environmental improvement efforts, such as spill prevention, efficiency improvements, and emissions reductions, into both routine operations and the design of new facilities.
Guided by our EBP process, we continue to take action to reduce emissions and to minimize our environmental footprint in sensitive locations.
(PERFORMANCE GRAPH)
(PERFORMANCE GRAPH)

 


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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  9
Through actions taken in 2006 and 2007, we reduced greenhouse gas (GHG) emissions by about 5 million metric tons in 2007. Additionally we saved about $900 million in energy costs through improvements identified by our Global Energy Management System (GEMS). Our Baton Rouge Refinery was presented the EnergyStar Award by the U.S. Environmental Protection Agency in recognition of the facility’s industry-leading improvements in energy-efficient operations.
ExxonMobil is an industry leader in the use of cogeneration, a highly efficient way to generate power and steam. With facilities under construction around the world, we expect to have interests in cogeneration capacity of over 5000 megawatts in the next three years. We continue to find innovation opportunities in cogeneration applications. For example, our cogeneration project in Antwerp, Belgium, will have the ability to directly integrate heat with one of the processes in the refinery, a development that will make it unique in the industry for a large-scale project. The Antwerp cogeneration project is on schedule to start up in 2008.
ExxonMobil recognizes that rising GHG emissions pose a risk to society and ecosystems. In addition to the activities described above, we are committed to the development of technology to reduce GHG emissions:
§   ExxonMobil is a founding sponsor of the Global Climate and Energy Project (GCEP) at Stanford University, a pioneering research effort to identify breakthrough low-GHG energy technologies.
 
§   In 2007 we announced the development of new film technologies for lithium-ion batteries. This technology has the potential to significantly enhance lithium-ion battery power, safety, and reliability, thereby helping to speed the adoption of these smaller and lighter batteries into the next wave of lower-emission vehicles.
 
§   In conjunction with our partners, we are progressing plans to commercialize an on-vehicle hydrogen production system in a fuel-cell-powered forklift. This application uses ExxonMobil technology that has the long-term potential to be up to 80 percent more fuel efficient than today’s internal combustion engines and reduce CO2 emissions by up to 45 percent.
 
§   We have partnered with the European Commission and others in the CO2ReMoVe project to assess the viability of geological carbon storage. Over the next few years, this project will evaluate a range of technologies to monitor the injection and storage of CO2 from gas streams at the offshore Sleipner and Snohvit fields in Norway. ExxonMobil shares ownership of the Sleipner field, where over 1 million metric tons of CO2 have been sequestered each year since 1998.
LIVING IN HARMONY WITH NATURE
The Steller’s sea eagle (“Orlan” in Russian) is included in the International Union for Conservation of Nature and Natural Resources’ Red List of threatened species and is protected under the Convention on Migratory Species. These birds make their home in far eastern Russia. Today, approximately 6000 of these beautiful and graceful birds survive. Their numbers are threatened by a host of diverse factors including increased predatory activity by the brown bear.
ExxonMobil is deeply involved in efforts to preserve and increase the number of Steller’s sea eagles. As part of the Sakhalin-1 project development, we created buffer zones around the eagles’ nests to prevent encroachment by people and machinery. On advice from Russian conservation experts, the route of a pipeline was altered to be farther from the eagles’ nesting sites. Additionally, a series of innovative actions has been taken in the Steller’s sea eagle population support program. These actions include building artificial nests and perches in the surrounding area to encourage the sea eagles to continue living in their historical territories. Metal coverings specially designed to look like tree bark have been used to cover the trunks of trees containing nests, making them more difficult to climb, thus deterring brown bear predators.
Over time these efforts are expected to result in an increase in the number of these majestic birds that are the namesake for the Sakhalin-1 oil platform, Orlan.
(PICTURE)
ExxonMobil developed the Chayvo facility with buffer zones to provide protected habitats for the Steller’s sea eagles that live in the area.

 


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10  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
FUNCTIONAL EARNINGS
                                                                         
    2007 Quarters                                
(millions of dollars)   First     Second     Third     Fourth     2007     2006     2005     2004     2003  
 
Net Income (U.S. GAAP)
                                                                       
Upstream
                                                                       
United States
    1,177       1,222       1,196       1,275       4,870       5,168       6,200       4,948       3,905  
Non-U.S.
    4,864       4,731       5,103       6,929       21,627       21,062       18,149       11,727       10,597  
Total
    6,041       5,953       6,299       8,204       26,497       26,230       24,349       16,675       14,502  
 
Downstream
                                                                       
United States
    839       1,745       914       622       4,120       4,250       3,911       2,186       1,348  
Non-U.S.
    1,073       1,648       1,087       1,645       5,453       4,204       4,081       3,520       2,168  
Total
    1,912       3,393       2,001       2,267       9,573       8,454       7,992       5,706       3,516  
 
Chemical
                                                                       
United States
    346       204       296       335       1,181       1,360       1,186       1,020       381  
Non-U.S.
    890       809       906       777       3,382       3,022       2,757       2,408       1,051  
Total
    1,236       1,013       1,202       1,112       4,563       4,382       3,943       3,428       1,432  
 
Corporate and financing
    91       (99 )     (92 )     77       (23 )     434       (154 )     (479 )     1,510  
Accounting change
                                                    550  
 
Net income (U.S. GAAP)
    9,280       10,260       9,410       11,660       40,610       39,500       36,130       25,330       21,510  
 
Net income per common share (dollars)
    1.64       1.85       1.72       2.15       7.36       6.68       5.76       3.91       3.24  
Net income per common share — assuming dilution (dollars)
    1.62       1.83       1.70       2.13       7.28       6.62       5.71       3.89       3.23  
 
 
                                                                       
Accounting Change and Other Special Items                                                        
Upstream
                                                                       
United States
                                                     
Non-U.S.
                                        1,620             1,700  
Total
                                        1,620             1,700  
 
Downstream
                                                                       
United States
                                        (200 )     (550 )      
Non-U.S.
                                        310              
Total
                                        110       (550 )      
 
Chemical
                                                                       
United States
                                                     
Non-U.S.
                                        540              
Total
                                        540              
 
Corporate and financing
                                  410                   2,230  
Accounting change
                                                    550  
 
Corporate total
                                  410       2,270       (550 )     4,480  
 
 
                                                                       
Earnings Excluding Accounting Change and Other Special Items(1)                                        
Upstream
                                                                       
United States
    1,177       1,222       1,196       1,275       4,870       5,168       6,200       4,948       3,905  
Non-U.S.
    4,864       4,731       5,103       6,929       21,627       21,062       16,529       11,727       8,897  
Total
    6,041       5,953       6,299       8,204       26,497       26,230       22,729       16,675       12,802  
 
Downstream
                                                                       
United States
    839       1,745       914       622       4,120       4,250       4,111       2,736       1,348  
Non-U.S.
    1,073       1,648       1,087       1,645       5,453       4,204       3,771       3,520       2,168  
Total
    1,912       3,393       2,001       2,267       9,573       8,454       7,882       6,256       3,516  
 
Chemical
                                                                       
United States
    346       204       296       335       1,181       1,360       1,186       1,020       381  
Non-U.S.
    890       809       906       777       3,382       3,022       2,217       2,408       1,051  
Total
    1,236       1,013       1,202       1,112       4,563       4,382       3,403       3,428       1,432  
 
Corporate and financing
    91       (99 )     (92 )     77       (23 )     24       (154 )     (479 )     (720 )
 
Corporate total
    9,280       10,260       9,410       11,660       40,610       39,090       33,860       25,880       17,030  
 
Earnings per common share (dollars)
    1.64       1.85       1.72       2.15       7.36       6.61       5.40       3.99       2.57  
Earnings per common share — assuming dilution (dollars)
    1.62       1.83       1.70       2.13       7.28       6.55       5.35       3.97       2.56  
 
 
(1)   See Frequently Used Terms on pages 94 through 97.

 


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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  11
RETURN ON AVERAGE CAPITAL EMPLOYED(1) BY BUSINESS
                                         
(percent)   2007     2006     2005     2004     2003  
 
Upstream
                                       
United States
    34.7       37.1       46.0       37.0       28.9  
Non-U.S.
    43.7       47.9       45.6       31.5       31.0  
Total
    41.7       45.3       45.7       32.9       30.4  
 
Downstream
                                       
United States
    65.1       65.8       58.8       28.6       16.7  
Non-U.S.
    28.7       24.5       22.6       18.0       11.5  
Total
    37.8       35.8       32.4       21.0       13.0  
 
Chemical
                                       
United States
    24.9       27.7       23.1       19.4       7.3  
Non-U.S.
    39.0       36.5       30.9       25.7       11.8  
Total
    34.0       33.2       28.0       23.5       10.2  
 
Corporate and financing
    NA       NA       NA       NA       NA  
 
Corporate total
    31.8       32.2       31.3       23.8       20.9  
 
 
(1)   Capital employed consists of shareholders’ equity and their share of consolidated debt, including ExxonMobil’s share of amounts applicable to equity companies. See Frequently Used Terms on pages 94 through 97.
(PERFORMANCE GRAPH)
AVERAGE CAPITAL EMPLOYED (1) BY BUSINESS
                                         
(millions of dollars)   2007     2006     2005     2004     2003  
 
Upstream
                                       
United States
    14,026       13,940       13,491       13,355       13,508  
Non-U.S.
    49,539       43,931       39,770       37,287       34,164  
Total
    63,565       57,871       53,261       50,642       47,672  
 
Downstream
                                       
United States
    6,331       6,456       6,650       7,632       8,090  
Non-U.S.
    18,983       17,172       18,030       19,541       18,875  
Total
    25,314       23,628       24,680       27,173       26,965  
 
Chemical
                                       
United States
    4,748       4,911       5,145       5,246       5,194  
Non-U.S.
    8,682       8,272       8,919       9,362       8,905  
Total
    13,430       13,183       14,064       14,608       14,099  
 
Corporate and financing
    26,451       27,891       24,956       14,916       6,637  
 
Corporate total
    128,760       122,573       116,961       107,339       95,373  
 
Average capital employed applicable to equity companies included above
    24,267       22,106       20,256       18,049       15,587  
 
 
(1)   Average capital employed is the average of beginning- and end-of-year business segment capital employed. See Frequently Used Terms on pages 94 through 97.
(PERFORMANCE GRAPH)

 


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12  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
CAPITAL AND EXPLORATION EXPENDITURES(1)
                                         
(millions of dollars)   2007     2006     2005     2004     2003  
 
Upstream
                                       
Exploration
                                       
United States
    415       425       297       248       275  
Non-U.S.
    1,494       1,619       1,396       1,035       940  
Total
    1,909       2,044       1,693       1,283       1,215  
 
Production(2)
                                       
United States
    1,792       2,058       1,841       1,669       1,842  
Non-U.S.
    11,913       12,059       10,844       8,629       8,758  
Total
    13,705       14,117       12,685       10,298       10,600  
 
Power and Coal
                                       
United States
    5       3       4       5       8  
Non-U.S.
    105       67       88       129       165  
Total
    110       70       92       134       173  
 
Total Upstream
    15,724       16,231       14,470       11,715       11,988  
 
 
                                       
Downstream
                                       
Refining
                                       
United States
    906       559       497       550       998  
Non-U.S.
    1,267       1,051       871       774       768  
Total
    2,173       1,610       1,368       1,324       1,766  
 
Marketing
                                       
United States
    201       233       217       201       216  
Non-U.S.
    876       852       859       811       739  
Total
    1,077       1,085       1,076       1,012       955  
 
Pipeline/Marine
                                       
United States
    21       32       39       24       30  
Non-U.S.
    32       2       12       45       30  
Total
    53       34       51       69       60  
 
Total Downstream
    3,303       2,729       2,495       2,405       2,781  
 
 
                                       
Chemical
                                       
United States
    360       280       243       262       333  
Non-U.S.
    1,422       476       411       428       359  
Total Chemical
    1,782       756       654       690       692  
 
 
                                       
Other
                                       
United States
    44       130       80       66       64  
Non-U.S.
          9             9        
Total other
    44       139       80       75       64  
 
Total capital and exploration expenditures
    20,853       19,855       17,699       14,885       15,525  
 
 
(1)   See Frequently Used Terms on pages 94 through 97.
 
(2)   Including related transportation.

 


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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  13
TOTAL CAPITAL AND EXPLORATION EXPENDITURES BY GEOGRAPHY
                                         
(millions of dollars)   2007     2006     2005     2004     2003  
 
United States
    3,744       3,720       3,218       3,025       3,766  
Canada/Latin America
    1,522       1,862       1,940       1,867       1,826  
Europe
    4,042       3,721       2,829       2,845       3,046  
Africa
    3,639       4,019       3,815       3,330       3,657  
Asia Pacific/Middle East
    6,156       4,601       3,241       2,168       2,046  
Russia/Caspian
    1,750       1,932       2,656       1,650       1,184  
 
Total worldwide
    20,853       19,855       17,699       14,885       15,525  
 
DISTRIBUTION OF CAPITAL AND EXPLORATION EXPENDITURES
                                         
(millions of dollars)   2007     2006     2005     2004     2003  
 
Consolidated Companies’ Expenditures
                                       
Capital expenditures
    15,242       15,361       13,792       11,901       12,857  
Exploration costs charged to expense
                                       
United States
    280       243       157       192       256  
Non-U.S.
    1,177       925       795       891       735  
Depreciation on support equipment(1)
    12       13       12       15       19  
Total exploration expenses
    1,469       1,181       964       1,098       1,010  
 
Total consolidated companies’ capital and exploration expenditures
                                       
(excluding Depreciation on support equipment)
    16,699       16,529       14,744       12,984       13,848  
 
                                       
ExxonMobil’s Share of Non-Consolidated Companies’ Expenditures
                                       
Capital expenditures
    4,122       3,315       2,938       1,865       1,651  
Exploration costs charged to expense
    32       11       17       36       26  
Total non-consolidated companies’ capital and exploration expenditures
    4,154       3,326       2,955       1,901       1,677  
 
Total capital and exploration expenditures
    20,853       19,855       17,699       14,885       15,525  
 
 
(1)   Not included as part of Total capital and exploration expenditures, but included as part of Exploration expenses, including dry holes, in the Summary Statement of Income, page 16.
(GRAPH)

 


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14  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
NET INVESTMENT IN PROPERTY, PLANT AND EQUIPMENT AT YEAR END
                                         
(millions of dollars)   2007     2006     2005     2004     2003  
 
Upstream
                                       
United States
    16,714       16,467       16,222       16,410       16,992  
Non-U.S.
    56,810       51,943       46,595       45,603       41,735  
Total
    73,524       68,410       62,817       62,013       58,727  
 
Downstream
                                       
United States
    9,705       9,320       9,334       9,408       9,714  
Non-U.S.
    20,443       19,598       18,695       20,402       19,852  
Total
    30,148       28,918       28,029       29,810       29,566  
 
Chemical
                                       
United States
    4,448       4,553       4,685       4,887       5,068  
Non-U.S.
    5,623       4,766       4,619       5,162       5,047  
Total
    10,071       9,319       9,304       10,049       10,115  
 
Other
    7,126       7,040       6,860       6,767       6,557  
 
Total net investment
    120,869       113,687       107,010       108,639       104,965  
 
DEPRECIATION AND DEPLETION EXPENSES
                                         
(millions of dollars)   2007     2006     2005     2004     2003  
 
Upstream
                                       
United States
    1,469       1,263       1,293       1,453       1,571  
Non-U.S.
    7,126       6,482       5,407       4,758       4,072  
Total
    8,595       7,745       6,700       6,211       5,643  
 
Downstream
                                       
United States
    639       632       615       618       601  
Non-U.S.
    1,662       1,605       1,611       1,646       1,548  
Total
    2,301       2,237       2,226       2,264       2,149  
 
Chemical
                                       
United States
    405       427       416       408       410  
Non-U.S.
    418       473       410       400       368  
Total
    823       900       826       808       778  
 
Other
    531       534       501       484       477  
 
Total depreciation and depletion expenses
    12,250       11,416       10,253       9,767       9,047  
 
OPERATING COSTS(1)
                                         
(millions of dollars)   2007     2006     2005     2004     2003  
 
Production and manufacturing expenses
    31,885       29,528       26,819       23,225       21,260  
Selling, general, and administrative
    14,890       14,273       14,402       13,849       13,396  
Depreciation and depletion
    12,250       11,416       10,253       9,767       9,047  
Exploration
    1,469       1,181       964       1,098       1,010  
 
Subtotal
    60,494       56,398       52,438       47,939       44,713  
ExxonMobil’s share of equity company expenses
    5,619       4,947       4,520       4,209       3,937  
 
Total operating costs
    66,113       61,345       56,958       52,148       48,650  
 
 
(1)   See Frequently Used Terms on pages 94 through 97.

 


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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  15
SUMMARY BALANCE SHEET AT YEAR END
                                         
(millions of dollars)   2007     2006     2005     2004     2003  
 
Assets
                                       
Current assets
                                       
Cash and cash equivalents
    33,981       28,244       28,671       18,531       10,626  
Cash and cash equivalents – restricted
          4,604       4,604       4,604        
Marketable securities
    519                          
Notes and accounts receivable, less estimated doubtful amounts
    36,450       28,942       27,484       25,359       24,309  
Inventories
                                       
Crude oil, products and merchandise
    8,863       8,979       7,852       8,136       7,665  
Materials and supplies
    2,226       1,735       1,469       1,351       1,292  
Prepaid taxes and expenses
    3,924       3,273       3,262       2,396       2,068  
 
Total current assets
    85,963       75,777       73,342       60,377       45,960  
 
Investments, advances, and long-term receivables
    28,194       23,237       20,592       18,404       15,535  
Property, plant and equipment, at cost, less accumulated depreciation and depletion
    120,869       113,687       107,010       108,639       104,965  
Other assets, including intangibles – net
    7,056       6,314       7,391       7,836       7,818  
 
Total assets
    242,082       219,015       208,335       195,256       174,278  
 
 
                                       
Liabilities
                                       
Current liabilities
                                       
Notes and loans payable
    2,383       1,702       1,771       3,280       4,789  
Accounts payable and accrued liabilities
    45,275       39,082       36,120       31,763       28,445  
Income taxes payable
    10,654       8,033       8,416       7,938       5,152  
 
Total current liabilities
    58,312       48,817       46,307       42,981       38,386  
 
Long-term debt
    7,183       6,645       6,220       5,013       4,756  
Postretirement benefits reserves
    13,278       13,931       10,220       10,850       9,609  
Deferred income tax liabilities
    22,899       20,851       20,878       21,092       20,118  
Other long-term obligations
    14,366       11,123       9,997       9,612       8,112  
Equity of minority and preferred shareholders in affiliated companies
    4,282       3,804       3,527       3,952       3,382  
 
Total liabilities
    120,320       105,171       97,149       93,500       84,363  
 
 
                                       
Shareholders’ Equity
                                       
Common stock without par value
    4,933       4,786       4,477       4,053       3,834  
Earnings reinvested
    228,518       195,207       163,335       134,390       115,956  
Accumulated other comprehensive income
                                       
Cumulative foreign exchange translation adjustment
    7,972       3,733       979       3,598       1,421  
Postretirement benefits reserves adjustment
    (5,983 )     (6,495 )                  
Minimum pension liability adjustment
                (2,258 )     (2,499 )     (2,446 )
Unrealized gains/(losses) on stock investments
                      428       511  
Common stock held in treasury
    (113,678 )     (83,387 )     (55,347 )     (38,214 )     (29,361 )
 
Total shareholders’ equity
    121,762       113,844       111,186       101,756       89,915  
 
Total liabilities and shareholders’ equity
    242,082       219,015       208,335       195,256       174,278  
 
The information in the Summary Statement of Income (for 2005 to 2007), the Summary Balance Sheet (for 2006 and 2007), and the Summary Statement of Cash Flows (for 2005 to 2007), shown on pages 15 through 17, corresponds to the information in the Consolidated Statement of Income, Consolidated Balance Sheet, and the Consolidated Statement of Cash Flows in the financial statements of ExxonMobil’s 2008 Proxy Statement. For complete consolidated financial statements, including notes, please refer to Appendix A of ExxonMobil’s 2008 Proxy Statement. See also Management’s Discussion and Analysis of Financial Condition and Results of Operations and other information in Appendix A of the 2008 Proxy Statement.

 


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16  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
SUMMARY STATEMENT OF INCOME
                                         
(millions of dollars)   2007     2006     2005     2004     2003  
 
Revenues and Other Income
                                       
Sales and other operating revenue(1)(2)
    390,328       365,467       358,955       291,252       237,054  
Income from equity affiliates
    8,901       6,985       7,583       4,961       4,373  
Other income
    5,323       5,183       4,142       1,822       5,311  
 
Total revenues and other income
    404,552       377,635       370,680       298,035       246,738  
 
 
                                       
Costs and Other Deductions
                                       
Crude oil and product purchases
    199,498       182,546       185,219       139,224       107,658  
Production and manufacturing expenses
    31,885       29,528       26,819       23,225       21,260  
Selling, general and administrative expenses
    14,890       14,273       14,402       13,849       13,396  
Depreciation and depletion
    12,250       11,416       10,253       9,767       9,047  
Exploration expenses, including dry holes
    1,469       1,181       964       1,098       1,010  
Interest expense
    400       654       496       638       207  
Sales-based taxes(1)
    31,728       30,381       30,742       27,263       23,855  
Other taxes and duties
    40,953       39,203       41,554       40,954       37,645  
Income applicable to minority and preferred interests
    1,005       1,051       799       776       694  
 
Total costs and other deductions
    334,078       310,233       311,248       256,794       214,772  
 
Income before income taxes
    70,474       67,402       59,432       41,241       31,966  
Income taxes
    29,864       27,902       23,302       15,911       11,006  
 
Income from continuing operations
    40,610       39,500       36,130       25,330       20,960  
 
Cumulative effect of accounting change, net of income tax
                            550  
 
Net income
    40,610       39,500       36,130       25,330       21,510  
 
 
                                       
Net Income per Common Share (dollars)
                                       
Income from continuing operations
    7.36       6.68       5.76       3.91       3.16  
Cumulative effect of accounting change, net of income tax
                            0.08  
 
Net income
    7.36       6.68       5.76       3.91       3.24  
 
 
                                       
Net Income per Common Share — Assuming Dilution (dollars)
                                       
Income from continuing operations
    7.28       6.62       5.71       3.89       3.15  
Cumulative effect of accounting change, net of income tax
                            0.08  
 
Net income
    7.28       6.62       5.71       3.89       3.23  
 
 
(1)   Sales and other operating revenue includes sales-based taxes of $31,728 million for 2007, $30,381 million for 2006, $30,742 million for 2005, $27,263 million for 2004, and $23,855 million for 2003.
 
(2)   Sales and other operating revenue includes $30,810 million for 2005, $25,289 million for 2004, and $20,936 million for 2003 for purchases/sales contracts with the same counterparty. Associated costs were included in Crude oil and product purchases. Effective January 1, 2006, these purchases/sales were recorded on a net basis with no resulting impact on net income.
The information in the Summary Statement of Income (for 2005 to 2007), the Summary Balance Sheet (for 2006 and 2007), and the Summary Statement of Cash Flows (for 2005 to 2007), shown on pages 15 through 17, corresponds to the information in the Consolidated Statement of Income, Consolidated Balance Sheet, and the Consolidated Statement of Cash Flows in the financial statements of ExxonMobil’s 2008 Proxy Statement. For complete consolidated financial statements, including notes, please refer to Appendix A of ExxonMobil’s 2008 Proxy Statement. See also Management’s Discussion and Analysis of Financial Condition and Results of Operations and other information in Appendix A of the 2008 Proxy Statement.

 


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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  17
SUMMARY STATEMENT OF CASH FLOWS
                                         
(millions of dollars)   2007     2006     2005     2004     2003  
 
Cash Flows from Operating Activities
                                       
Net income
                                       
Accruing to ExxonMobil shareholders
    40,610       39,500       36,130       25,330       21,510  
Accruing to minority and preferred interests
    1,005       1,051       799       776       694  
Cumulative effect of accounting change, net of income tax
                            (550 )
Adjustments for noncash transactions
                                       
Depreciation and depletion
    12,250       11,416       10,253       9,767       9,047  
Deferred income tax charges/(credits)
    124       1,717       (429 )     (1,134 )     1,827  
Postretirement benefits expense in excess of/ (less than) payments
    (1,314 )     (1,787 )     254       886       (1,489 )
Other long-term obligation provisions in excess of/(less than) payments
    1,065       (666 )     398       806       264  
Dividends received greater than/(less than) equity in current earnings of equity companies
    (714 )     (579 )     (734 )     (1,643 )     (402 )
Changes in operational working capital, excluding cash and debt
                                       
Reduction/(increase) – Notes and
                                  accounts receivable
    (5,441 )     (181 )     (3,700 )     (472 )     (1,286 )
– Inventories
    72       (1,057 )     (434 )     (223 )     (100 )
– Prepaid taxes and expenses
    280       (385 )     (7 )     11       42  
Increase/(reduction) – Accounts and other payables
    6,228       1,160       7,806       6,333       1,130  
Net (gain) on asset sales
    (2,217 )     (1,531 )     (1,980 )     (268 )     (2,461 )
All other items – net
    54       628       (218 )     382       272  
 
Net cash provided by operating activities
    52,002       49,286       48,138       40,551       28,498  
 
 
                                       
Cash Flows from Investing Activities
                                       
Additions to property, plant and equipment
    (15,387 )     (15,462 )     (13,839 )     (11,986 )     (12,859 )
Sales of subsidiaries, investments, and property, plant and equipment
    4,204       3,080       6,036       2,754       2,290  
Decrease/(increase) in restricted cash and cash equivalents
    4,604                   (4,604 )      
Additional investments and advances
    (3,038 )     (2,604 )     (2,810 )     (2,287 )     (809 )
Collection of advances
    391       756       343       1,213       536  
Additions to marketable securities
    (646 )                        
Sales of marketable securities
    144                          
 
Net cash used in investing activities
    (9,728 )     (14,230 )     (10,270 )     (14,910 )     (10,842 )
 
 
                                       
Cash Flows from Financing Activities
                                       
Additions to long-term debt
    592       318       195       470       127  
Reductions in long-term debt
    (209 )     (33 )     (81 )     (562 )     (914 )
Additions to short-term debt
    1,211       334       377       450       715  
Reductions in short-term debt
    (809 )     (451 )     (687 )     (2,243 )     (1,730 )
Additions/(reductions) in debt with less than 90-day maturity
    (187 )     (95 )     (1,306 )     (66 )     (322 )
Cash dividends to ExxonMobil shareholders
    (7,621 )     (7,628 )     (7,185 )     (6,896 )     (6,515 )
Cash dividends to minority interests
    (289 )     (239 )     (293 )     (215 )     (430 )
Changes in minority interests and sales/(purchases) of affiliate stock
    (659 )     (493 )     (681 )     (215 )     (247 )
Tax benefits related to stock-based awards
    369       462                    
Common stock acquired
    (31,822 )     (29,558 )     (18,221 )     (9,951 )     (5,881 )
Common stock sold
    1,079       1,173       941       960       434  
 
Net cash used in financing activities
    (38,345 )     (36,210 )     (26,941 )     (18,268 )     (14,763 )
 
Effects of exchange rate changes on cash
    1,808       727       (787 )     532       504  
 
Increase/(decrease) in cash and cash equivalents
    5,737       (427 )     10,140       7,905       3,397  
Cash and cash equivalents at beginning of year
    28,244       28,671       18,531       10,626       7,229  
 
Cash and cash equivalents at end of year
    33,981       28,244       28,671       18,531       10,626  
 
The information in the Summary Statement of Income (for 2005 to 2007), the Summary Balance Sheet (for 2006 and 2007), and the Summary Statement of Cash Flows (for 2005 to 2007), shown on pages 15 through 17, corresponds to the information in the Consolidated Statement of Income, Consolidated Balance Sheet, and the Consolidated Statement of Cash Flows in the financial statements of ExxonMobil’s 2008 Proxy Statement. For complete consolidated financial statements, including notes, please refer to Appendix A of ExxonMobil’s 2008 Proxy Statement. See also Management’s Discussion and Analysis of Financial Condition and Results of Operations and other information in Appendix A of the 2008 Proxy Statement.

 


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18  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
The Outlook for Energy – A View to 2030
Our outlook is focused on the world’s rising energy needs and how we expect these needs to be met. Providing this energy is not easy or automatic. The challenges reflect the global scope of the task, as well as substantial objectives related to economic development, energy security, and the environment.
The Outlook for Energy summarizes ExxonMobil’s projections for global energy demand and supply through 2030. The outlook is developed annually, the result of an ongoing process that has been conducted for decades. The results are used to assist our business planning and to increase public understanding of the world’s energy needs and challenges.
PROGRESS DRIVES A GROWING NEED FOR ENERGY
The world’s economy runs on energy. Future energy use will be driven by a growing global population that continues to advance and seek better living standards. Global economic output, as measured by Gross Domestic Product (GDP), is likely to increase by close to 3 percent annually through 2030, similar to historical trends.
While growing, the global economy is becoming more energy efficient. Energy intensity — the amount of energy used per unit of economic output — has improved significantly over the past 25 years. The rate of improvement is likely to increase as advanced technologies are developed and deployed. As a result, energy intensity in 2030 will be almost 50 percent below the level in 1980.
Global energy demand — expressed in millions of oil-equivalent barrels per day — is expected to increase by an average of 1.3 percent per year from 2005 to 2030, even with significant efficiency gains. The vast majority of the demand increase will be in developing countries, where economies are growing most rapidly and modern energy supplies are still a precious commodity for millions of people. While the use of alternative fuels will continue to grow, oil, natural gas, and coal will remain the primary sources of energy throughout the outlook period.
POWER GENERATION AND GROWING ELECTRICITY DEMANDS
The largest end-use sector today, and the one with the greatest volume growth going forward, is power generation. Both economic development and rising prosperity drive the demand for electricity.
The linkage between electricity demand and economic progress is evident when considering electricity use relative to GDP per capita in countries around the world. For example, per capita electricity use in the United States is close to seven times that of China. This difference reflects the fact that as economies grow and incomes rise, per-capita electricity use increases to serve an expanding variety of needs, from appliances and air conditioning in homes to commercial office equipment and the manufacture of goods.
As developing countries become more prosperous and billions of people move up the economic curve, demand for electricity will increase significantly. By 2030 electricity use in the non-OECD countries will increase by about 70 percent on a per capita basis, and more than double overall.
Meeting this demand will require strong growth in fuel supplies for power generation. The particular mix of energy sources used by countries around the world is highly dependent on economics, the availability of local supplies, and public policies.
Total power generation in the OECD countries is expected to grow only about 1 percent per year to 2030. Growth will be
(GRAPH)
OECD — Organisation for Economic Co-operation and Development

 


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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  19
(GRAPH)
(GRAPH)
led by less CO2-intensive fuels. The share of power generation from coal is expected to decline from 40 percent to 30 percent, while nuclear power and natural gas will each gain a considerable share of the mix. Renewable fuels usage will grow most rapidly, but from a small base.
In the non-OECD countries, total power generation demand is expected to increase more than twice as fast as in the OECD countries. Coal demand will rise substantially and retain close to a 50 percent share of total input fuel. Increases in natural gas demand will be led by Asia Pacific and the Middle East. Nuclear power and renewable fuels usage will grow most rapidly.
On a global basis, coal will remain the largest source of power through the outlook period, comprising approximately 40 percent of total input fuels in 2030. While more efficient technologies and cleaner fuels will continue to penetrate the power generation sector, coal’s predominance will continue to have significant implications for overall CO2 emissions.
TRANSPORTATION DEMAND EXPANDING
The fastest growing sector — and the one most important to oil demand — is transportation, which includes road vehicles, ships, trains, and airplanes.
Transportation is an essential part of today’s world — whether aiding the provision of goods and services or getting people to local or distant destinations. Global economic progress, increasing populations, and rising individual prosperity will remain strong drivers of transportation demand.
These drivers of transportation demand are readily apparent when considering the outlooks for the OECD and non-OECD countries, which illustrate significantly different trends in demand. The OECD countries, with relatively modest population and economic growth, are moving toward a plateau in transportation demand with overall growth of 0.6 percent per year on average from 2005 to 2030. This view is underpinned by an expected decline in fuel demand for light-duty vehicles (e.g., cars, SUVs) in the latter years. In contrast,
(GRAPH)
(GRAPH)


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20  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
fuel consumption by heavy-duty vehicles (e.g., trucks) will increase by approximately 1.7 percent per year while other transportation segments (e.g., aviation, marine, and rail) will increase approximately 1.2 percent per year on average.
In the non-OECD countries, transportation fuel demand is likely to climb steadily at approximately 3 percent per year, or about five times faster than the OECD countries. All transportation sectors will increase significantly, reflecting faster economic and population growth, and rising personal incomes.
A segment of particular focus is light-duty vehicles. As of 2005, there were about 700 million light-duty vehicles worldwide with close to 80 percent in the OECD countries. The United States is predominant with approximately one-third of the global total, and more light-duty vehicles than all of the non-OECD countries combined. However, as economic prosperity expands in the non-OECD countries, vehicle ownership in these nations will rise dramatically.
As the number of vehicles continues to rise, energy efficiency will become increasingly important. Significant gains are expected to come from evolutionary changes to conventional engine technologies, along with market penetration of advanced vehicle technologies.
LIQUIDS SUPPLY AND DEMAND
Meeting the growing need for affordable, reliable energy supplies remains a tremendous challenge. Access to resources, ongoing investments, and transparent energy markets, including international trade, are critical.
Liquid fuel, principally oil, is the most widely used source of energy today. Oil is widely available, easy to transport, and economical. Demand is expected to increase from 86 million oil-equivalent barrels per day today to 116 million oil-equivalent barrels per day in 2030. Demand will be met by a variety of sources.
Crude and condensate from the non-OPEC countries make up the largest supply source today. These supplies are likely to have a long plateau with a modest downturn after 2020.
Canadian heavy oil output will grow rapidly, both from mining and in situ developments. Supplies are expected to increase from 1 million barrels per day in 2005 to more than 4 million barrels per day in 2030.
Natural gas liquids (NGL) will increase as gas supplies grow. OPEC condensate will add more than 1 million barrels per day, reaching over 3 million barrels per day in 2030. Other supplies will include gas to liquids, increasing to about 1 million barrels per day, and coal to liquids, which will contribute modestly through demonstration plants. Refinery processing gains will also add to increased supplies.
Biofuel supplies, primarily ethanol from corn and sugar cane, are likely to average close to 8 percent annual growth over the period. From a small base today, supplies are likely to reach approximately 3 million oil-equivalent barrels per day in 2030, or 3 percent of global liquids demand.
OPEC crude supply is expected to rise from about 30 million barrels per day today to 45 to 50 million barrels per day by 2030. Timely investments will remain vital to providing reliable, affordable supplies.
GAS SUPPLY AND DEMAND
Natural gas will continue to expand its reach as a reliable, affordable source of energy. Power generation is the sector with the most significant growth in natural gas demand at approximately 2 percent per year. Residential, commercial, and industrial uses are also important with demand expected to grow close to 1.5 percent per year on average through 2030.
Demand will increase in North America, Europe, and, most significantly, the Asia Pacific region. International trade, via long pipelines and liquefied natural gas (LNG) supplies, will play a critical role in meeting these growing needs. While each region’s gas supply-demand outlook is unique, they share a growing need for LNG. To help meet these demands, supplies are expected to increase significantly from the Middle East, Africa, and Australia over the outlook period.
(PERFORMANCE GRAPH)
OPEC — Organization of the Petroleum Exporting Countries

 


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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  21
(PERFORMANCE GRAPH)
(PERFORMANCE GRAPH)
(PERFORMANCE GRAPH)
GLOBAL ENERGY IN PERSPECTIVE
In assessing the global energy future, it is important to recognize the expected contribution of all primary energy sources. Oil consumption, driven by transportation and industrial demand, will likely increase at 1.2 percent per year. Gas consumption is expected to grow at 1.7 percent per year, largely due to increasing demand for power generation from efficient fuels with relatively low carbon intensity. Demand for coal, which has high carbon intensity, is likely to rise less than 1 percent per year. Nuclear power is expected to grow significantly, particularly after 2020.
Renewable fuels will also gain share, with a growth rate of 1.5 percent per year expected overall. Most of this segment is made up of traditional biomass (e.g., wood, charcoal, dung), hydroelectric, and geothermal energy. Relatively modest growth is expected for these traditional renewables.
In contrast, “modern” renewables, specifically wind, solar, and biofuels, are likely to grow rapidly, at about 9 percent per year on average, supported by government subsidies and mandates. These energy sources currently represent about 0.5 percent of world energy and are expected to reach approximately 2 percent by 2030.
GROWING ENERGY DEMAND AND CO2 EMISSIONS
In the OECD countries, total energy demand growth is expected to be relatively modest at 0.5 percent per year, with the share of coal shrinking. As a result, energy-related CO2 emissions in the OECD countries are likely to be almost flat to 2030. Growth that occurs in energy demand is expected to be offset by a decrease in the overall carbon intensity of energy use.
In the non-OECD countries, by comparison, much stronger growth in energy demand is expected. With significant increases in all fossil fuels, energy-related CO2 emissions are expected to rise by almost 2 percent per year.
Global energy-related CO2 emissions are likely to increase 1.2 percent per year on average, with the non-OECD countries representing close to 95 percent of the annual growth over the outlook period.
A variety of options exist to mitigate CO2 emissions, but each option has a cost that is ultimately borne by consumers. Effectively addressing this issue requires a thorough understanding of the scale, cost, and trade-offs involved.
CONCLUSIONS
We draw three key conclusions from our outlook.
§   Economic progress will drive energy demand significantly higher by 2030, up nearly 40 percent versus 2005, even with substantial gains in efficiency. This growth will be concentrated in the non-OECD countries, where economies are growing rapidly and where billions of people require access to growing quantities of energy to improve their quality of life.
 
§   Oil, gas, and coal will be indispensable to meet the demand for reliable, affordable energy for the foreseeable future. Since renewable fuels start from a small base, even with rapid growth, they will not significantly alter the global energy mix over the outlook period. Fossil fuels are expected to continue to provide about 80 percent of energy in 2030.
 
§   Significantly impacting global CO2 emissions growth will require the combination of many challenging and essential elements, including global participation, step changes in energy efficiency, significant technology gains, and massive investment over decades.
Our approach to addressing these challenges is pragmatic, with a long-term perspective. We remain committed to finding practical, broad-based solutions that will help ensure reliable, affordable energy for people around the world.

 


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22  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
Technology
ExxonMobil effectively develops and globally deploys proprietary technology. Our research efforts encompass all of our functional businesses: Upstream, Downstream, and Chemical.
UPSTREAM TECHNOLOGY
ExxonMobil is committed to investing in a broad range of proprietary technologies that provide a competitive advantage in exploration, field development, hydrocarbon recovery, and production operations.
Integrated Source Prediction
A prerequisite for successful exploration is the presence of organic-rich source rocks that generate oil and gas. ExxonMobil has developed technologies that accurately predict the distribution and quality of ancient source rocks to improve the identification of new exploration opportunities. Our integrated work processes and tools incorporate an understanding of complex paleo-environmental factors to make probabilistic predictions of potential source rocks. We have applied this Integrated Source Prediction workflow in opportunity identification and acreage capture efforts in Libya, Canada, Madagascar, Ireland, and New Zealand.
(GRAPH)
Colored dye highlights the flow of water and sediment in a laboratory measurement of deposition processes.
Our proprietary workflow combines complex paleo-environmental factors with biological, physical, and chemical processes to predict source rock potential.
Award-Winning Research
The Society of Exploration Geophysicists (SEG) presented its prestigious 2007 Distinguished Achievement Award to ExxonMobil for “the first substantial test of controlled source electromagnetics for direct hydrocarbon indication.” The award recognizes ExxonMobil for contributions that “substantially advanced the science of exploration geophysics.” Our research led to the development of the R3M method, which is used today to reduce exploration risk in drilling programs around the globe.
Accurate Reservoir Prediction
ExxonMobil maintains an industry-leading capability for gaining new insights into the development and spatial distribution of sedimentary formations. Using two state-of-the-art sedimentology flume tanks, we make observations and measurements that demonstrate how deltaic and deepwater systems form over time. These direct observations improve our ability to predict the distribution of permeability in reservoirs and provide data to validate our unique process-based numerical modeling methods. These tools allow us to build geologic models based on the fundamental principles of sediment transport and deposition. Our work in this area has led to significantly improved reservoir modeling and more accurate performance prediction.
(GRAPH)
Colored dye highlights the flow of water and sediment in a laboratory measurement of deposition processes.

 


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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  23
Enhanced Recovery and Processing of Heavy Oil
ExxonMobil is pursuing a broad range of research activities to improve the efficiency of heavy oil recovery and processing. Our research program includes developing proprietary in situ recovery processes, enhancing surface-related technologies to improve the economics of mining operations, and improving upgrading technologies to increase the value of heavy oil and aid in its transport. These new technologies will help ExxonMobil develop a current heavy oil and oil sands resource base of nearly 15 billion barrels and gain access to new global opportunities.
(GRAPHIC)
Our research for in situ heavy oil recovery includes innovative processes to improve economic recovery in existing thermal heavy oil developments as well as novel, proprietary processes to unlock resources that are currently uneconomic. One research product is our Liquids Addition to Steam for Enhanced Recovery (LASER) process, jointly developed with Imperial Oil Limited. This process involves co-injecting solvent with steam, and builds on the success and experience of our Cyclic Steam Stimulation (CSS) process. A staged approach of scaled laboratory experiments, reservoir modeling, and field testing has confirmed that LASER significantly improves recovery relative to CSS alone. We performed the first commercial application of LASER in 2007 and plan to expand its use.
(GRAPHIC)
Research in mining and upgrading operations for bitumen recovery addresses the economic challenge of processing up to two tons of oil sands to produce a single barrel of clean bitumen. To produce the clean bitumen, ExxonMobil and Imperial Oil Limited have jointly developed a High-Temperature Paraffinic Froth Treatment (HTPFT) process, which removes tightly bound water and fine solids. HTPFT will be applied in the Kearl development in northern Alberta, Canada.
Once produced, bitumen must typically be upgraded or diluted in order to transport it to refineries for further processing. ExxonMobil is developing novel methods using proprietary catalysts and processes to improve the quality of produced bitumen, thereby increasing its value and facilitating transportation.
Technical Training
The mission of ExxonMobil’s Upstream technical training effort is to develop the industry’s premier technical workforce. Our technical curriculum, comprising 200 courses, covers a variety of disciplines, including engineering, geoscience, technical computing, project management, commercial operations, and safety. In 2007 over 7000 students attended 375 training sessions. A distinguishing feature of the program is that 85 percent of the 550 instructors are ExxonMobil employees. By using our own instructors, we incorporate proprietary technology and deliver research results to the functional businesses. In addition, students get to know company experts and build personal networks they can rely on throughout their careers. We continually assess and improve the effectiveness of our training and develop new courses to meet emerging needs.
(GRAPHIC)
Geoscientists work together on a team problem in Fundamentals of Subsurface Interpretation,
one of the flagship courses for geoscience employees.

 


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24  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
Flexible Well Completion Method
ExxonMobil drills and produces hydrocarbons from wells in increasingly remote and hostile environments, including deepwater, arctic, and high pressure/high temperature reservoirs. The well completion (the interface between the reservoir and the well) must perform reliably in these challenging conditions, sometimes for 20 years or longer. We have developed state-of-the-art analytical capabilities that accurately predict the ability of a well to produce at required flow rates and, at the same time, control sand, water, and gas production. As a result, we are able to design and employ simple, yet robust, well completions with self-activated subsurface controls that adapt to changing production environments. This distinguishing combination of technologies can be used in a wide range of well completions and has been successfully applied to extended-reach wells in the Sakhalin-1 Chayvo field in Russia.
(GRAPHIC)
Flexible Well Completion design enables self-activated control of unwanted sand and fluid inflow into the well.
Shared Earth Environment
The Shared Earth Environment is one component of the work ExxonMobil has under way to achieve breakthrough performance in subsurface interpretation. The primary objective of this initiative is to create a common visual environment and tools that interdisciplinary teams of geoscientists and engineers can use to rapidly visualize, integrate, and analyze relevant technical data. The improved integration and collaboration enabled by the Shared Earth Environment will enhance work efficiency, improve business decisions through more effective communication and analysis, and increase resource recovery through opportunity identification and optimized development plans.
(GRAPHIC)
3D models of subsurface oil and gas reservoirs used in field development planning integrate geoscience interpretations and engineering predictions.
Flow Line Integrity
ExxonMobil uses laboratory experiments coupled with advanced analytical techniques to predict and prevent corrosion in flow lines that gather oil and gas production. In our Materials & Corrosion Laboratory, we accurately reproduce field conditions with unique test equipment. Modern surface measurement techniques gather data, and statistical analysis tools estimate corrosion rates over time. These results are used to calibrate a proprietary corrosion model, called CorrCast, which predicts corrosion over the full range of flow line operating conditions. Using CorrCast predictions, we can implement designs and operating practices for corrosion control to assure flow line integrity.
(GRAPHIC)
ExxonMobil scientists analyze corrosion using an interferometric microscope.

 


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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  25
Effective Sour Gas Processing
ExxonMobil’s CFZ technology is being developed for potential application at sour gas fields where high concentrations of CO2 and H2S create challenges for economic recovery of methane. By reducing processing equipment and resulting costs, the CFZ process can facilitate commercial development of these gas resources. The CFZ process differs from conventional separation methods by cryogenically removing both CO2 and H2S in a controlled manner and using a simpler distillation process to purify the methane and remove the unwanted compounds. These improvements are particularly significant when integrated with reservoir injection of the acidic CO2 and H2S by-products, since they are produced as a high-pressure liquid that requires less power and equipment for subsequent injection. Efforts are under way to build a CFZ commercial demonstration plant at ExxonMobil’s LaBarge facility in Wyoming.
(GRAPHIC)
CFZ is a cryogenic process for the single-step removal of CO2 and H2S from natural gas.
Reservoir Simulation Advances
ExxonMobil’s industry-leading reservoir simulator, EMpower, takes advantage of the latest developments in multiple-CPU desktop computers. The EMpower simulator’s advanced parallel computing algorithms determine the optimal way to divide a reservoir model into multiple calculation regions, each of which is simultaneously modeled on a separate CPU. This parallel processing method allows significant reductions in the time required to simulate reservoir fluid flow processes. The faster computing times enable our teams to tackle more complex problems, such as modeling super-giant fields with hundreds of wells, simultaneously modeling multiple fields that share processing facilities and platforms, or using advanced optimization mathematics to identify development plans that maximize economic recovery.
(GRAPHIC)
The EMpower simulator optimally divides a reservoir model into multiple calculation regions to make the most effective use of multiple-CPU desktop computers.
Innovative Concepts for Oil Shale Recovery
Oil shale represents a significant unconventional hydrocarbon resource, with estimates of the total volume of oil-in-place exceeding 1.5 trillion equivalent barrels in the United States alone. ExxonMobil is pursuing multiple concepts for commercializing oil shale, and our leading candidate technology is the Electrofrac process for in situ oil shale conversion. This process has the potential to provide cost-effective recovery in deep, thick formations with less surface disturbance than other proposed methods.
The Electrofrac process is designed to heat oil shale in situ by creating hydraulic fractures in the oil shale and filling the fractures with an electrically conductive material. Electricity is conducted from one end of the fracture to the other, making the fracture a resistive heating element. Heat flows from the fracture into the oil shale formation, gradually converting the oil shale’s solid organic matter into oil and gas. The oil and gas are then produced by conventional methods.
Results from laboratory experiments and numerical modeling have been encouraging, and field tests have been initiated to test Electrofrac process elements on a larger scale. Many years of research and development may be required to demonstrate the technical, environmental, and economic feasibility of this breakthrough technology.
(GRAPHIC)
The Electrofrac process could potentially be used for the subsurface conversion of oil shale into producible hydrocarbons.

 


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26  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
DOWNSTREAM TECHNOLOGY
Our long-term commitment to investment in innovative downstream research, led by our scientists and in collaboration with other leading researchers around the world, continues to deliver competitive advantage by progressing our strategic business objectives: lower-cost processes, advantaged feeds, and higher-value products.
Lower-Cost Processes
Advanced Catalyst Development – ExxonMobil is an industry leader in the discovery, development, and deployment of new refining catalysts. Catalysis — enabling the right chemical reactions and increasing their rate — is integral to most refining technologies and critical to increasing product yields and lowering processing costs.
Our investment in high throughput experimentation (HTE) technology, including experimental design, automated materials synthesis and testing, and advanced data analysis, has allowed the rapid development of improved catalysts. This advantageous research method has accelerated the next generation of new technology in areas of demonstrated strength. HTE techniques enabled the latest advancement in a new SCANfining catalyst to produce lower-sulfur gasoline. To meet the growing demand for ultra-low-sulfur diesel (ULSD), ExxonMobil is developing a new step-out ULSD catalyst, which was discovered using HTE tools. High throughput experimentation will continue to accelerate the pace of improvements in the production of clean fuels.
(GRAPHIC)
High throughput experimentation (HTE) has allowed rapid advances in the development of new catalysts, including the next generation of SCANfining catalyst recently deployed at our refinery in Wakayama, Japan.
Complex Modeling – Complex modeling tools developed by ExxonMobil scientists, utilizing computational fluid dynamics, allow us to better use existing assets to strategic advantage. Modeling complex system behavior enables ExxonMobil engineers to configure the hardware and process conditions of our fluidized catalytic cracking units to produce gasoline more efficiently with overall lower energy consumption.
(GRAPHIC)
Computational fluid dynamics modeling of the fluidized catalytic cracking catalyst and hydrocarbon feed allows improved efficiency in the production of gasoline.
Emissions Reduction – ExxonMobil has long been a leader in environmental technology, licensing our Wet Gas Scrubbing (WGS) technology for over two decades to remove sulfur dioxide and particulate emissions from refinery flue gases. We have recently developed and are now licensing an enhancement of our technology called WGS+. This technology uses a proprietary process within the scrubber to remove nitrogen oxides, a combustion by-product and contributor to smog formation. This enhancement provides a single, integrated air emissions control device for nitrogen oxides, sulfur dioxide, and particulate removal. Developing and applying proprietary technology provides ExxonMobil with the ability to reduce emissions in an effective and cost-efficient manner.

 


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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  27
Advantaged Feeds
Efficient and reliable refining operations are critical to our ability to process challenged feeds and lower raw material costs.
ExxonMobil has developed a proprietary suite of tools to improve refining operability, enabling additional feed flexibility. Operator Guidance Tools are used in our refineries by control room personnel to keep the process units running smoothly. These tools provide key information on process and equipment conditions to the operators, allowing proactive monitoring of process conditions and problem analysis. Avoiding potential disruptions in the operation improves unit safety and enables feedstock flexibility, resulting in improved business performance.
ExxonMobil continues to lead the industry in hydroprocessing technology for efficient conversion of lower-value feedstocks into cleaner fuels and lubricants. In 2007 we began using our latest proprietary catalyst, MSDW-3, in Jurong, Singapore, to improve lube basestock production. This technology application is a direct example of research increasing feed flexibility and improving energy conservation in refining.
(GRAPHIC)
ExxonMobil scientists utilized state-of-the-art pilot plants to develop the next generation of proprietary catalyst for production of lube basestocks, MSDW-3.
Higher-Value Products
Technology plays an important role in developing new products, such as our advanced lubricants, that benefit consumers and the environment.
ExxonMobil has developed a series of high-performance synthetic lubricants utilizing advanced additive and synthetic basestock technology to provide environmental benefits over conventional products. Our Emission System Protection (ESP) product line of passenger car and heavy-duty diesel engine oil helps control vehicle emissions by extending the life of exhaust treatment technology, such as diesel particulate traps and catalytic converters. The flagship products in this line are Mobil 1 ESP for passenger cars and Mobil 1 Delvac ESP for heavy-duty trucks. In addition, the Mobil 1 Extended Performance product line in the United States allows car owners to extend oil change intervals to 15,000 miles, reducing the total volume of used oil to be disposed of each year. Mobilgear SHC XMP industrial gear oil is designed to provide extra protection for wind turbine gear boxes, supporting the production of renewable energy.
ExxonMobil supplies Mobil 1 branded lubricants and fuels designed specifically for use by the Vodafone McLaren Mercedes Formula 1 team, contributing to the team’s many victories. These exceptionally severe racing conditions are the ultimate testing environment for lubricants and fuels and are a proving ground for continuous advancement of the Mobil 1 branded products for everyday use.
(GRAPHIC)
Vodafone McLaren Mercedes Formula 1 driver Lewis Hamilton (left) and engineer Dr. Tony Harlow refill the Mobil 1 lubricant used by the team.

 


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28  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
CHEMICAL TECHNOLOGY
Within the Chemical technology portfolio, we have a number of activities that allow us to capture value from low-cost, advantaged feedstocks and from more efficient operating processes. Our research in premium products focuses on translating the evolving higher demands of our customers into value-added products that capitalize on our process capabilities.
Lower-Cost Processes
We have a number of programs targeting more efficient, lower-cost processes. Following a significant development program, ExxonMobil recently began commercial production of butyl rubber at our Notre-Dame-de-Gravenchon plant in France using a breakthrough process technology. This technology allows the reactors to be operated at much more efficient temperatures for higher throughput and lower energy usage.
We have also developed state-of-the-art PxMax technology for production of paraxylene. The technology can offer significant debottleneck opportunities by increasing paraxylene yields in existing equipment while lowering costs. PxMax technology will be employed at the aromatics plant expansion in Rotterdam, the Netherlands.
(GRAPHIC)
Using our breakthrough process technology, we have demonstrated a 20-percent increase in our ability to produce butyl rubber in the polymerization section of existing plants.
Premium Product Development
Our Chemical business also continues to focus on delivering higher-value premium products to the market.
Our extensive product development facilities include high throughput experimentation (HTE) catalyst screening, large-scale production lines, and plastic film lines. A recent product development example is the commercialization of Enable metallocene-catalyzed polyethylene, which has outstanding processability while retaining excellent film properties.
We have also recently developed a dynamically vulcanized alloy (DVA) of Exxpro specialty elastomers and nylon. This material may be blown into film and used as the air barrier for the inner liner of tires. Tires manufactured with DVA liners are lighter weight, which improves tire durability and reduces fuel consumption.
(GRAPHIC)
Metallocene catalysts allow researchers to tailor product properties to meet customer needs. ExxonMobil is a leader in this technology.
Advantaged Feeds
Many of our programs are centered around developing new processes to run advantaged feeds. Use of these lower-cost feeds provides greater flexibility in meeting marketing demands while managing raw material costs.
We also continue to invest in breakthrough technology development. Our methanol-to-olefins program is well developed, and we have extended our research to include a methanol-to-aromatics program.
Development of technology to upgrade bottom-of-the-barrel streams and discovery of game-changing conversion processes set us apart from competition and will extend our competitive advantage for the future.
(GRAPHIC)
ExxonMobil has over 100 patent applications filed in methanol conversion technology for lower-cost olefins and aromatics.

 


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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  29
Integration
The integration of our businesses is a competitive advantage that enables ExxonMobil to capture new opportunities and grow shareholder returns. Integration between business functions delivers value through superior opportunity identification, implementation of best practices, advantaged technology, and operational optimization.
SUPERIOR OPPORTUNITY IDENTIFICATION
We are uniquely positioned in the industry due to the breadth and depth of our technological and operational capabilities in each of our Upstream, Downstream, and Chemical businesses. As a result, we are able to identify and deliver high-quality, integrated projects that generate increased value to our shareholders and to resource owners through economies of scale, use of proprietary technology, superior project and operations management, and optimization of raw materials and products.
ExxonMobil, along with our project partners, formed the only fully integrated refining, petrochemicals, and fuels marketing venture with foreign participation in China. Additionally we are progressing studies with Qatar Petroleum for a petrochemical complex utilizing feedstock from gas development projects in Qatar’s North Field.
IMPLEMENTATION OF BEST PRACTICES
Integration across our Upstream, Downstream, and Chemical businesses allows us to capture benefits by sharing best practices, utilizing centralized support services, and leveraging the expertise of our employees around the world. For example, our capital investment portfolio is managed using a globally consistent management system. While each investment is unique, our approach to project development and management utilizes our time-tested, consistent best practices: optimized concept selection, comprehensive project planning, disciplined project execution, and reappraisal of project performance.
ADVANTAGED TECHNOLOGY
ExxonMobil takes an integrated approach to the development and deployment of new technology. Our researchers, scientists, engineers, and operating functions work together to identify key business challenges that require technical solutions. The ongoing dialogue allows us to concentrate research efforts in the highest-value areas, driven by our business needs.
Technology development represents only part of our integration advantage. ExxonMobil’s ability to rapidly deploy new solutions through our global functional organization allows us to utilize technologies and subject matter experts to their fullest.
OPERATIONAL OPTIMIZATION
Through years of experience, we have developed proprietary technologies that allow us to optimize operations across our functional businesses. Our Molecule Management technology includes advanced molecular fingerprinting and modeling tools that enable us to process the optimal mix of crudes and maximize the yield of higher-value products and feedstocks. Integrated process models enable our refineries to tailor feedstocks to our chemical plants in order to maximize value. Sophisticated process control technologies optimize unit performance, increase reliability, and decrease operating costs. Our ongoing optimization activities allow us to maximize the value of every molecule.
Integrated Concepts
ExxonMobil has expertise throughout the upstream, downstream, and chemical value chain. Our technology, operating experience, and project management skills allow us to identify opportunities to maximize resource value.
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(PICTURE)
In Nigeria, a marine transport vessel installs a new offshore platform at the East Area NGL II project in late 2007. The new facilities will extract natural gas liquids and export them to the onshore Bonny River terminal.
                                         
UPSTREAM STATISTICAL RECAP   2007     2006     2005     2004     2003  
 
Earnings (millions of dollars)
    26,497       26,230       24,349       16,675       14,502  
Liquids production (thousands of barrels per day)
    2,616       2,681       2,523       2,571       2,516  
Natural gas production available for sale (millions of cubic feet per day)
    9,384       9,334       9,251       9,864       10,119  
Oil-equivalent production (thousands of barrels per day)
    4,180       4,237       4,065       4,215       4,203  
Proved reserves replacement(1)(2) (percent)
    132       129       129       125       107  
Resource additions(2) (millions of oil-equivalent barrels)
    2,010       4,270       4,365       2,940       2,110  
Average capital employed(2) (millions of dollars)
    63,565       57,871       53,261       50,642       47,672  
Return on average capital employed(2) (percent)
    41.7       45.3       45.7       32.9       30.4  
Capital and exploration expenditures(2) (millions of dollars)
    15,724       16,231       14,470       11,715       11,988  
 
(1)   Excluding asset sales, the 2007 Venezuela expropriation, and year-end price/cost effects.
 
(2)   See Frequently Used Terms on pages 94 through 97.

 


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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  31
EXPLORATION, DEVELOPMENT, PRODUCTION, AND GAS & POWER MARKETING
UPSTREAM STRATEGIES
ExxonMobil’s fundamental Upstream strategies guide our global exploration, development, production, and gas and power marketing activities:
§   Identify and pursue all attractive exploration opportunities
 
§   Invest in projects that deliver superior returns
 
§   Maximize the profitability of existing oil and gas production
 
§   Capitalize on growing natural gas and power markets
These strategies are underpinned by our relentless focus on safety, health, and environmental performance. Our commitment to the ongoing development and application of innovative technologies is key to the success of our Upstream strategies.
(GRAPHIC)
 
(1)   Royal Dutch Shell, BP, and Chevron values are estimated on a consistent basis with ExxonMobil, based on public information.
 
2007 Results and Highlights
Achieved best-ever employee safety performance.
Earnings were a record $26.5 billion.
Upstream return on average capital employed was 42 percent in 2007 and has averaged 39 percent over the past five years.
Earnings per oil-equivalent barrel were $17.37, exceeding those of our competitors.
Total liquids production and natural gas production available for sale was 4.2 million oil-equivalent barrels per day, the highest among our competitors.
Replaced 101 percent of production with proved oil and gas reserve additions of 1.6 billion oil-equivalent barrels, including asset sales and the effect of the Venezuela expropriation, and excluding year-end price/cost effects.
Resource base additions totaled 2.0 billion oil-equivalent barrels. ExxonMobil’s resource base now stands at 72 billion oil-equivalent barrels.
Finding and resource-acquisition costs were $0.97 per oil-equivalent barrel.
Upstream capital and exploration spending was $15.7 billion, driven by an active exploration program, selective investment in a strong portfolio of development projects, and continued investment to enhance the value of existing assets.
UPSTREAM COMPETITIVE ADVANTAGES
Portfolio Quality – The quality, size, and diversity of ExxonMobil’s resource base and project inventory underpin a strong long-term outlook.
Global Integration – The global functional Upstream companies work with the Downstream and Chemical businesses to identify and deliver integrated solutions that maximize resource value.
Discipline and Consistency – ExxonMobil rigorously assesses the world’s hydrocarbon resources and pursues only the most attractive opportunities. We explore, develop, produce, and market using globally deployed management systems that ensure application of the highest technical, operational, and commercial standards.
Value Maximization – From optimum development concept selection through mid- and late-life investments to increase reservoir recovery, ExxonMobil maximizes resource value over the life of each asset.
Long-Term perspective – Consistent, selective capital investment and focused technology development ensure robust investments that reward shareholders over the long term.

 


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32  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
Identify and Pursue All Attractive Exploration Opportunities
ExxonMobil is positioned to identify, evaluate, pursue, and capture the highest-quality opportunities. Our global organization explores in a diverse range of geological and geographical environments, covering the full range of resource life cycle and type, including:
§   New exploration plays and concepts that typically have high uncertainty but large resource potential to provide significant long-term resource growth
 
§   Unconventional resources such as tight gas, heavy oil, and oil sands that can provide profitable, long-plateau production
 
§   Further exploration of established hydrocarbon provinces and mature plays that provide near-term resource additions and production
 
§   Discovered fields that are undeveloped or partially developed
(PICTURE)
Advanced, integrated visualization capabilities allow geoscientists and engineers to collaborate in an interactive environment.
Each year ExxonMobil makes significant investments in new data and fundamental scientific analyses to identify new resource capture opportunities. The combination of world-class technical expertise and our extensive global database provides a distinct competitive advantage in the identification, evaluation, pursuit, and capture of new opportunities.
ExxonMobil has developed and implemented a proprietary, interactive database that captures the results of decades of basin analysis and historical exploration activity around the globe. This system is used to assemble data, interpretations, and quantitative assessments for each area in which ExxonMobil explores. It enables ExxonMobil geoscientists to identify areas for more in-depth study and ultimately define new opportunities to pursue. Once identified, opportunities are assessed and screened for technical and economic viability, as well as materiality, on a globally consistent basis. Only the best, most robust opportunities are selected for further evaluation and investment. ExxonMobil has the research and technical capability to develop and deploy new technology when existing capabilities are not sufficient to effectively evaluate a particular resource.
ExxonMobil’s disciplined exploration process delivers cost-effective, high-quality resources and promotes long-term resource additions and production growth.
In 2007 this approach resulted in the successful capture of 14 conventional and unconventional opportunities in new, untested areas as well as established ones.
ExxonMobil’s gross exploration acreage totaled 118 million acres in 31 countries at year-end 2007. This acreage provides a high-quality, geographically and geologically diverse portfolio of opportunities for potential resource and production growth.
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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  33
2007 KEY EXPLORATION CAPTURES
Australia ExxonMobil expanded its position in the Greater Gorgon area by acquiring interests in the 730,000-acre Block WA-392-P, south of the Jansz discovery, and the 1.4-million-acre Block WA-268-P, northwest of Jansz. ExxonMobil holds 25-percent interest in both blocks. ExxonMobil also acquired a 65-percent operating interest in the 820,000-acre Block WA-318-P in the Bonaparte Basin, offshore northern Australia. Seismic acquisition in support of potential future drilling is planned for 2008.
Canada ExxonMobil Canada and majority-owned affiliate Imperial Oil were jointly awarded 100-percent interest in the EL446 block in the Beaufort Sea, offshore Canada. The block covers over 500,000 acres and is located 75 miles from shore in water depths ranging from 200 to 4000 feet. Near-term plans include a 3D seismic survey to identify potential drilling opportunities.
Germany ExxonMobil was awarded four exploration licenses by the Lower Saxony and North Rhine-Westphalia states, covering 1.3 million acres of the Lower Saxony Basin. ExxonMobil operates these licenses with a 67-percent interest. Drilling is expected to commence in 2008.
Greenland ExxonMobil was awarded interests in Blocks 4 and 6 located 30 to 60 miles offshore western Greenland. ExxonMobil will operate Block 6 (ExxonMobil interest, 44 percent) through the exploration, development, and production phases and Block 4 (ExxonMobil interest, 29 percent) after the exploration phase. These adjacent blocks cover a total of nearly 6.7 million acres.
Indonesia ExxonMobil was awarded the 1-million-acre Mandar block offshore Sulewesi. Award of this deepwater block follows capture of the Surumana block in 2006. Seismic data acquisition is planned for 2008 in support of exploration drilling. ExxonMobil holds 100-percent interest in each block.
Libya ExxonMobil was awarded operatorship of Contract Area 20 (ExxonMobil interest, 22 percent), covering 2.5 million acres offshore Libya. Seismic acquisition commenced in the fourth quarter of 2007, and drilling is planned for 2009. ExxonMobil also signed an interim agreement in 2007 for the adjacent Contract Area 21. The agreement is expected to be ratified in 2008.
New Zealand ExxonMobil was awarded the 4-million-acre PEP50117 license (ExxonMobil interest, 90 percent) in the 2007 New Zealand Great South Basin tender. Seismic data has been acquired and will be used to further assess the potential of this large block.
U.S. Gulf of Mexico ExxonMobil was the high bidder on 13 leases in the Gulf of Mexico Central Sale 205. At year-end 2007, five blocks in the deepwater Lower Tertiary trend had been awarded to ExxonMobil.
(MAP)

 


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34  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
Invest in Projects That Deliver Superior Returns
ExxonMobil continues to deliver superior returns from Upstream projects through disciplined investment and industry-leading project planning and execution.
As project scale and complexity increase across the industry, the challenge to bring new energy supplies to market on budget and on schedule grows. Through our ability to deliver superior project execution results, ExxonMobil consistently meets these new challenges and maximizes value to resource owners and to our shareholders.
Superior project execution begins with selecting the design and operating concept that will be robust through a range of uncertainties and will deliver maximum value over the life of the asset. It requires a commitment to and investment in technology to develop innovative solutions that lower costs and increase reliability. At ExxonMobil, we spend a great deal of time on execution planning, or the “how to” regarding development of major projects. These essentials are enhanced by the experience of our project management professionals and our global functional organization that facilitates the swift transfer of lessons learned and best practices around the world.
The combination of our global processes, proprietary technology, and project management experience results in industry-leading project performance.
ExxonMobil has a geographically diverse portfolio of about 120 projects that are expected to develop over 24 billion oil-equivalent barrels (net). Many of these developments are located in challenging environments and include deepwater, heavy oil/oil sands, tight gas, arctic, LNG, and acid/sour gas projects. This large, diverse portfolio provides ExxonMobil the ability to selectively fund those projects that will be robust over a wide range of economic conditions.
(BAR CHART)
Project Execution
ExxonMobil continues to demonstrate the ability to deliver projects on time and on budget. Over the last five years, the average facilities cost and schedule of 44 ExxonMobil-operated projects came within 5 percent of the level projected at funding.
(BAR CHART)
(PIE CHART)
(PIE CHART)
(PIE CHART)

 


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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  35
Maximize Profitability of Existing Oil and Gas Production
ExxonMobil applies the most cost-effective technology and operations management systems to every asset to maximize the commercial recovery of hydrocarbons.
ExxonMobil’s diverse and robust asset base is balanced between mature producing fields and fields that are early in their producing lives.
ExxonMobil employs a global organization to manage oil and gas assets. Using this structure, we are able to leverage the transfer of technology and best practices across our global portfolio. We establish priorities on a worldwide basis and deploy resources when and where they are needed, drawing on an experienced, dedicated, and diverse workforce of exceptional quality.
Our strategies place significant emphasis on managing and optimizing base performance and continuously generating opportunities to maximize the value of our assets. High-quality reservoir management and rigorous depletion planning ensure optimum long-term performance from each of our fields and enhance production from existing wells. We continually invest in our existing asset base to enhance resource recovery, maximize profitability, and extend field life. New production volumes are generated through work programs including workovers, drilling new wells, and implementing secondary or tertiary recovery projects to access and develop resources not captured during the initial field development.
All of these activities are performed with a structured focus on cost management and capital discipline in combination with a steadfast commitment to operations excellence. Operations integrity is fundamental to our success and is a top priority.
We place significant emphasis on maximizing production uptime through our disciplined focus on integrity and facility reliability. We maximize uptime through reliability improvement activities, rigorous scheduled maintenance planning, and disciplined root-cause analysis of downtime events.
We are a recognized industry leader in the application of cost-effective technology for enhanced oil recovery (EOR). We have broad experience with water and gas injection, heavy oil steamflooding, and sour gas injection to increase reservoir recovery.
Our asset base is continuously under review to ensure that every asset is contributing to our strategic objectives to the maximum extent possible.
Our Upstream business consistently generates more earnings per barrel than our competitors. This is a reflection of our commitment to maximizing recovery, superior execution, and investment discipline.
(GRAPH)
 
(1)   Royal Dutch Shell, BP, and Chevron values calculated on a consistent basis with ExxonMobil, based on public information.
(BAR CHART)
(BAR CHART)

 


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36  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
Capitalize on Growing Natural Gas and Power Markets
Growth in world gas and power demand combined with ExxonMobil’s global reach provides a strong platform to maximize the value of our gas, natural gas liquids, and power operations. Our sales and development activities extend to almost all major and developing markets. ExxonMobil sells about 11 billion cubic feet per day of natural gas to customers in a variety of sectors including power companies and industrial users. We also manage about 1 million barrels per day of natural gas liquids, generate a significant amount of power, and are an important marketer of helium.
With global gas demand growing and existing local supplies declining in many areas of the world, the development of new resources is key to the continued supply of the world’s gas requirements.
In North America, ExxonMobil is a major gas producer and processor with production from the Gulf of Mexico, the onshore Gulf Coast, the mid-continent United States, western Canada, and offshore eastern Canada. We continue to expand production of our significant tight gas resources in the Piceance Basin in Colorado. ExxonMobil has a leading position in arctic gas resources in the Mackenzie Delta region of northern Canada and on the North Slope of Alaska.
Liquefied natural gas (LNG) will play a greater role in our activities in the United States as we complete construction of the Golden Pass LNG regasification terminal in Texas and seek to permit a new terminal offshore New Jersey.
In addition to natural gas, our Shute Creek plant in Wyoming is one of the world’s leading sources of helium.
ExxonMobil is a leading gas producer in Europe through ownership in many key assets in the Netherlands, Germany, and the North Sea. Natural gas demand in Europe continues to grow while local production is expected to begin declining in the next few years, creating the need for new supplies. To help meet this need, ExxonMobil and our partners are developing new resources, such as the Ormen Lange field offshore Norway, and are nearing completion of LNG import terminals in the United Kingdom and Italy. Both the South Hook terminal in Milford Haven, Wales, and the Adriatic terminal offshore Italy are expected to be operational in 2008.
ExxonMobil remains among the largest suppliers of natural gas in Australia and Malaysia and also sells gas in Thailand, Russia Far East, Qatar, and elsewhere. Our LNG ventures provide significant volumes of gas to key Asian markets, including Japan, South Korea, India, and Taiwan.
A major strength of our marketing activities is the ability to integrate our Upstream, Downstream, and Chemical businesses. This advantage allows us to optimize our portfolio to respond to market demands most effectively and profitably. Applying this strong integrated focus to the global scale of our operations delivers significant competitive advantage.
(PICTURE)
Gas & Power Marketing constantly assesses conditions across the world’s gas and power markets
to optimize ExxonMobil’s global portfolio.
POWER ACTIVITIES
ExxonMobil has interests in electric power generation facilities with total capacity of over 15,500 megawatts. These interests include a majority interest in the Castle Peak Power Company, which generates and sells electricity in Hong Kong and mainland China. ExxonMobil is an industry leader in the application of cogeneration technology, with interests in about 4500 megawatts of cogeneration capacity that is used primarily to supply our own power and steam demands. With facilities under construction around the world, we expect to have interests in cogeneration capacity of over 5000 megawatts in the next three years.
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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  37
LNG Market
Global LNG demand is expected to grow by more than 4 percent per year through 2030, driven by demand in North America and Europe as well as Asia Pacific markets. By 2030 LNG demand is expected to exceed 500 million tons per year, representing almost 16 percent of the world’s gas demand.
(PIE CHART)
 
(1)   Includes joint-marketed interests
ExxonMobil is currently participating in LNG production in Qatar and Indonesia with a combined gross capacity of approximately 35 million tons per year, supplying markets in Asia, Europe, and North America. Construction is progressing in Qatar on four additional LNG trains that will increase gross capacity by over 30 million tons per year. In addition, ExxonMobil is progressing new LNG opportunities in Asia and West Africa. Once these opportunities are brought onstream, ExxonMobil expects to be participating in gross LNG capacity of approximately 100 million tons per year, with significant volumes being placed in the growing markets of North America, Europe, and Asia Pacific.
ExxonMobil is also participating with Qatar Petroleum and others in the construction of LNG regasification terminals on the U.S. Gulf Coast; Milford Haven, United Kingdom; and offshore Italy. ExxonMobil is seeking regulatory approval to build a floating LNG receiving terminal, called BlueOcean Energy, approximately 20 miles off the coast of New Jersey. The terminal would have the capacity to supply approximately 1.2 billion cubic feet of natural gas per day, enough to meet the needs of more than 5 million residential consumers. BlueOcean Energy is expected to start up during the middle of the next decade.
(GEOGRAPHIC CHART)
ExxonMobil and Qatar Petroleum retain capacity rights in the Fluxys Zeebrugge terminal in Belgium. Castle Peak Power Company, an ExxonMobil joint venture with China Light and Power, is progressing an onshore terminal in Hong Kong for LNG imports. ExxonMobil participates in the Shimizu terminal in Japan that is currently being expanded.
Through our large global portfolio of gas resources and integrated LNG operations, ExxonMobil is well-positioned to help meet the world’s growing gas and power needs.
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38  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
Major Development Projects
ExxonMobil participated in seven major project start-ups in 2007, with 12 more anticipated in 2008. Beyond 2008, an additional 47 major projects are in various stages of project planning and execution. There are about 120 projects in the portfolio, including minor projects.
(MAP)
RasGas Train 5 The Ras Laffan Liquefied Natural Gas Company II Train 5 (ExxonMobil interest, 30 percent) in Qatar was completed under budget and ahead of schedule. The onshore facilities came online in November 2006 and the offshore facilities in January 2007. With production of 4.7 million tons per year of LNG, it is the third train built of this size at RasGas with the “Design One, Build Multiple” strategy, enabling this project to outperform the original cost and schedule estimates.
(PICTURE)
Production of LNG from Ras Laffan Liquefied Natural Gas Company II Train 5, shown at left, began just 29 months after major construction contracts were awarded.
Rosa Production from the Rosa field (ExxonMobil interest, 20 percent) in Angola began in June 2007. This 360-million-barrel development is located approximately 85 miles offshore in a water depth of 4500 feet. The field is tied back to the existing Girassol floating production, storage, and offloading (FPSO) vessel. This development included a major upgrade to the FPSO’s processing system that will maintain the production plateau at 250 thousand barrels per day until early into the next decade.
Tengiz Phase 1 Initial oil production from the first expansion of the Tengiz development (ExxonMobil interest, 25 percent) in Kazakhstan, was achieved in October 2007. This expansion, when complete, will integrate a second-generation gas-handling project with sour-gas injection, resulting in incremental production of 285 thousand barrels of oil per day (gross).
Statfjord Late Life The Statfjord Late Life project (ExxonMobil interest, 21 percent) offshore Norway started up in October 2007. This project will develop 1.1 trillion cubic feet of gas and 186 million barrels of oil and natural gas liquids (gross). The project includes gas cap blowdown, reservoir depressurization, and facility debottlenecking, as well as a new gas export pipeline that connects into the U.K. gas pipeline system.
Ormen Lange The Ormen Lange project (ExxonMobil interest, 7 percent) offshore Norway started production in September 2007. The project will develop almost 13 trillion cubic feet of gas and 175 million barrels of natural gas liquids (gross). The gas is being transported by the world’s longest subsea export pipeline, approximately 750 miles across the North Sea, from a new processing plant in Nyhamna, Norway, to the Easington terminal in the United Kingdom.
Waddenzee Start-up of the Moddergat and Nes fields (ExxonMobil interest, 40 percent) in the Waddenzee area of the Netherlands was achieved on time and on budget in 2007. Production and environmental permits have been secured for development of the Lauwersoog and Vierhuizen fields, also in the Waddenzee area.

 


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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  39
Marimba North The Marimba North project (ExxonMobil interest, 40 percent) began production in September 2007 and will develop 80 million barrels of oil in approximately 3900 feet of water, 90 miles off the coast of Angola. The project is a subsea tie-back to the Kizomba A development and was completed ahead of schedule and within budget. Major components include subsea wells, a single drill center, approximately 20 miles of flowlines, and a riser system that ties the production flowline into the Kizomba A Tension Leg Platform. This milestone was achieved safely without any production impact to the existing Kizomba A operations. With the addition of Marimba North, Block 15 will produce about 540 thousand barrels of oil per day with combined recoverable resources of approximately 2 billion barrels of oil.
(PICTURE)
The Marimba North project, a subsea development offshore Angola that started up in 2007, utilizes facilities on the Kizomba A FPSO, shown here.
MAJOR PROJECT START - UPS
                                             
        Target Peak                        
        Production (Gross)     ExxonMobil                  
        Liquids     Gas     Working                  
        (KBD)     (MCFD)     Interest (%)                  
2007 (Actual)                                        
Angola
  Marimba North     40             40       n          
 
  Rosa     140             20       l          
Kazakhstan
  Tengiz Phase 1     285       350       25       l          
Netherlands 
  Waddenzee           195       40       l          
Norway
  Ormen Lange     35       2385       7       l          
 
  Statfjord Late Life     80       315       21       l          
Qatar
  RasGas Train 5     45       740       30         5          
 
                                           
2008 (Projected)                                        
Angola
  Kizomba C — Mondo     100             40       n          
 
  Kizomba C — Saxi/Batuque     100             40       n          
Azerbaijan
  ACG Phase 3     260             8       l          
Italy
  Adriatic LNG Terminal                 45       5          
Malaysia
  Jerneh B           150       100       n          
Norway
  Volve     50       30       30       l          
Nigeria
  East Area Natural Gas Liquids II     40             51       n          
Qatar
  Qatargas II Train 4     80       1250       30       5          
 
  RasGas Train 6     75       1250       30       5          
U.K.
  South Hook LNG Terminal                 24       5          
 
  Starling     5       110       72       l          
U.S.
  Thunder Horse     210       185       25       l          
 
                                           
2009-2010 (Projected)                                        
Canada
  Hibernia Southern Expansion     80             22       n          
Norway
  Tyrihans     80       335       12       l          
Qatar
  Al Khaleej Gas Phase 2     70       1250       80 *     n          
 
  RasGas Train 7     75       1250       30       5          
 
  Qatargas II Train 5     80       1250       18       5          
U.S.
  Golden Pass LNG Terminal                 18       5          
 
  Piceance Phase 1     2       200       100       n          
 
                                           
 
2011+ (Projected)                                        
Angola
  Cravo-Lirio-Orquidea-Violeta     150             20       l          
 
  Gindungo-Canela-Gengibre     120             15       l          
 
  Kizomba Satellites     125             40       n          
 
  Palas-Astrea-Juno     150             25       l          
 
  Pazflor     200             20       l          
 
  Plutao-Saturno-Venus-Marte     150             25       l          
Australia
 
Greater Gorgon Initial Development
    15       2250       25       l          
 
  Kipper / Tuna     15       175       41       n          
 
  Scarborough           965       50       n          
 
  Turrum     10       245       50       n          
Canada
  Cold Lake Expansion     35             100       n          
 
  Cold Lake LASER Future Phases     20             100       n          
 
  Hebron     140             38       l          
 
  Kearl Phase 1     100             100       n          
 
  Kearl Future Phases     200             100       n          
 
  Mackenzie Gas     10       830       56       n          
Indonesia
  Banyu Urip     165             45       n          
 
  Natuna           1100       76       n          
Italy
  Tempa Rossa     50       5       25       l          
Kazakhstan
  Kashagan Phase 1     360             17 *     l          
 
  Kashagan Future Phases     1190             17 *     l          
 
  Tengiz Expansion     260             25       l          
Nigeria
  Bonga North     100       60       20       l          
 
  Bonga SW     140       105       16       l          
 
  Bosi Oil     135             56       n          
 
  Erha North Phase 2     30             56       n          
 
  LNG IPP Upstream           700       40       n          
 
  Satellite Field Development     125             40       n          
 
  Usan     180             30       l          
 
  Usari Pressure Maintenance     50             40       n          
Norway
  Trestakk     55       50       33       l          
Papua New Guinea
  PNG LNG Project     40       940       34       n          
Qatar
  Barzan     100       1500       10 *     5          
Russia
  Sakhalin-1 Odoptu     35             30       n          
 
  Sakhalin-1 Arkutun-Dagi     75             30       n          
 
  Sakhalin-1 Future Phases           800       30       n          
U.K.
  Fram     5       45       72       l          
U.S.
  Alaska Gas/Point Thomson     70       4500       36       *          
 
  Piceance Future Phases     10       825       100       n          
 
  Prudhoe Bay Western Region     50             36       l          
Operatorship:
n = ExxonMobil Operated
5 = Joint Operation
l = Co-Venturer Operated

* Pending Final Agreements


— Not Applicable

 


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40  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
RESOURCES
The size, quality, and diversity of ExxonMobil’s resource base are competitive strengths of the Corporation. ExxonMobil’s resource base totals 72 billion oil-equivalent barrels, of which 32 percent is proved.
The resource base is updated annually for new discoveries and resource additions, and to reflect changes in the estimates of existing resources. Changes to existing resources may result from new drilling or from revisions to forecast recovery estimates such as from planned use of new technology. Changes may also occur due to modifications to depletion plans and from ongoing geoscience and engineering evaluations. Volumes produced or sold during the year are removed from the resource base at year end.
ExxonMobil’s resource base is the largest among our competitors, and is highly diverse in terms of geography and hydrocarbon/development type. The success of ExxonMobil’s global opportunity identification strategy is demonstrated by our ability to add an average of 3.1 billion oil-equivalent barrels of resource per year over the past five years.
In 2007 we added 2.0 billion oil-equivalent barrels to the resource base, with significant additions resulting from our drilling programs in the Piceance Basin in Colorado, West Africa, and the Asia Pacific region. Overall, the resource base was reduced by 1.8 billion barrels in 2007, driven by production and the expropriation of our Venezuelan assets in June 2007.
Effective use of ExxonMobil’s proprietary processes and best practices has resulted in continued low finding and resource-acquisition costs. In 2007 finding and resource-acquisition costs were $0.97 per oil-equivalent barrel. The timing of large resource additions varies from year to year and can lead to fluctuations in finding and resource-acquisition cost. The five-year average finding and resource-acquisition cost is $0.55 per oil-equivalent barrel.
See Frequently Used Terms on pages 94 through 97.
Resource Base Changes
                 
            5-Year  
(billions of oil-equivalent barrels)   2007     Average  
 
               
Resource additions/acquisitions
    2.0       3.1  
Revisions to existing fields
    (0.4 )     (0.6 )
Production
    (1.6 )     (1.6 )
Sales(1)
    (1.8 )     (0.9 )
 
Net change
    (1.8 )      
 
(PERFORMANCE GRAPH)
(PERFORMANCE GRAPH)
(PERFORMANCE GRAPH)
 
(1)   Includes impact of the Venezuela expropriation (1.6 billion oil-equivalent barrels).
 
(2)   See Frequently Used Terms on pages 94 through 97.
ExxonMobil’s industry-leading resource base of 72 billion oil-equivalent barrels is diverse in terms of resource type and geography.
(PIE CHART)

 


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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  41
PROVED RESERVES
The annual reporting of proved reserves is the product of ExxonMobil’s rigorous and structured management review process that is stewarded by a team of experienced reserves experts with global responsibilities. ExxonMobil calculates its reserves using the same pricing basis used to make investment decisions, consistent with long-standing practice, rather than single-day, year-end pricing.
At year-end 2007, the resource base included 22.7 billion oil-equivalent barrels of proved oil and gas reserves, which equates to a reserves life at current production rates of 14.4 years. The reserves are evenly distributed between liquids and gas, and are geographically diverse.
ExxonMobil has added over 8.7 billion oil-equivalent barrels to proved reserves over the last five years, more than replacing production. In that time frame, the development of new fields and extensions of existing fields have added an average of 1.1 billion oil-equivalent barrels per year to proved reserves. Revisions have averaged about 0.7 billion oil-equivalent barrels per year over the last five years, driven by effective reservoir management and the application of new technology.
In 2007 ExxonMobil replaced 101 percent of reserves produced, including asset sales and the Venezuela expropriation, by adding 1.59 billion oil-equivalent barrels to proved reserves while producing 1.58 billion oil-equivalent barrels. Key additions came from our operations in the United States, Middle East, Europe, and Africa. Excluding the effect of the Venezuela expropriation and other asset sales, ExxonMobil replaced 132 percent of reserves.
(PERFORMANCE GRAPH)
 
(1) Proved reserves reflecting December 31, 2007 prices can be found on page 96.
(PERFORMANCE GRAPH)
 
(2) Includes asset sales and the 2007 Venezuela expropriation, and excludes year-end price/cost effects.
PRODUCTION VOLUMES
In 2007 oil-equivalent production of 4.2 million barrels per day was down 1 percent compared to 2006. Liquids production was 2.6 million barrels per day, and natural gas volumes available for sale were 9.4 billion cubic feet per day. Excluding the effect of the Venezuela expropriation, divestments, OPEC quotas, and price and spend impacts on volumes, oil-equivalent production was up nearly 1 percent. Volumes from new projects offset natural field decline and production sharing contract (PSC) net interest reductions of approximately 100 thousand barrels per day.
Near-term production growth will be driven by large gas projects in Qatar and liquids projects offshore West Africa. Longer-term growth will be enhanced by key projects in the Asia Pacific/Middle East, Africa, and Russia/Caspian regions. Production from North America and Europe is expected to continue to provide a strong, profitable base.
The forward-looking projections of production volumes in this document are reflective of our best assumptions regarding the technical, commercial, and regulatory aspects of existing operations and new projects. Factors that could have an impact on actual volumes include project start-up timing, regulatory changes, quotas, asset sales, operational outages, severe weather, and price effects under certain production sharing contracts.
See Frequently Used Terms on pages 94 through 97.


(PERFORMANCE GRAPH)
(PERFORMANCE GRAPH)

 


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42  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
Worldwide Upstream Operations
ExxonMobil has interests in exploration and production acreage in 36 countries and production operations in 24 countries.
The Americas
ExxonMobil’s operations in the Americas accounted for approximately 26 percent of ExxonMobil’s 2007 net oil and gas production and about 29 percent of Upstream earnings. Base production continues to yield strong returns. We expect future production to include contributions from multiple opportunities, including tight gas, heavy oil, deepwater, and arctic developments.
Americas Highlights
                         
    2007   2006   2005
Earnings (billions of dollars)
    7.6       8.9       9.5  
Proved Reserves(1)(BOEB)
    6.2       6.2       6.9  
Acreage (gross acres, million)
    56.3       56.4       62.9  
Net Liquids Production (MBD)
    0.7       0.8       0.9  
Net Gas Available for Sale (BCFD)
    2.3       2.5       2.8  
 
(1) See Frequently Used Terms on pages 94 through 97.
(GRAPHIC)
UNITED STATES
ExxonMobil is one of the largest oil and gas producers and reserves holders in the United States. The U.S. portfolio is geographically diverse with significant positions in all major producing regions, including the Gulf Coast and deepwater areas of the Gulf of Mexico, the mid-continent, onshore and offshore California, and Alaska. The U.S. portfolio contains a diverse range of assets, from mature fields to new, world-scale projects.
The United States continues to provide a significant contribution to ExxonMobil’s profitability through high-quality drilling programs, selective investments in existing fields and new projects, and continued operational-efficiency improvements.
(GRAPHIC)
ExxonMobil continued to evaluate our large deepwater acreage position in the Gulf of Mexico in 2007.
(GRAPHIC)

 


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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  43
(GRAPHIC)
The Golden Pass LNG terminal, currently under construction at Sabine Pass, Texas, will regasify LNG received from Qatar for supply to U.S. markets.
Gulf of Mexico/Gulf Coast – For more than 50 years, ExxonMobil has been a leading oil and gas producer in the offshore Gulf of Mexico, with average daily net production of 56 thousand barrels of liquids per day and 573 million cubic feet of gas per day in 2007. Onshore production in Texas and Louisiana added 72 thousand barrels of liquids per day and 480 million cubic feet of gas per day.
In the Gulf of Mexico, ExxonMobil has about 2.6 million acres (gross) under lease, and operates about 70 structures. We continue to actively evaluate our large acreage position, including the deepwater Lower Tertiary play.
The Golden Pass LNG regasification terminal at Sabine Pass, Texas, is currently under construction and is scheduled to start up in 2009. It will have the capacity to supply 2 billion cubic feet of gas per day to the U.S. market.
Thunder Horse, a deepwater development in the central Gulf of Mexico, is progressing and is scheduled to start up in 2008.
Mid-Continent – ExxonMobil has oil and gas production throughout the mid-continent states, including Wyoming, Kansas, Colorado, Oklahoma, and New Mexico. Average daily net production from these areas was 12 thousand barrels of liquids per day and 365 million cubic feet of gas per day in 2007.
The mid-continent contains some of the most mature assets in ExxonMobil’s portfolio. The application of proprietary technology, including enhanced oil recovery and refracturing techniques, continues to significantly extend production life.
In the Piceance Basin in Colorado, ExxonMobil has 300,000 acres under lease with a potential recoverable resource of nearly 45 trillion cubic feet of gas (gross). In 2007 field production was brought to 55 million cubic feet of gas per day. Near term, production will be increased through expansion of the gas gathering and processing system and additional drilling. Opportunities for additional projects to fully develop the resource are under evaluation.
The LaBarge development (ExxonMobil interest, 100 percent) in Wyoming consists of the Tip Top and Hogsback fields and the Shute Creek plant. The operation includes the longest sour gas pipeline in the United States and the world’s largest helium recovery and Selexol (gas sweetening) plants. In 2007 the LaBarge facilities processed an average of 637 million cubic feet of inlet gas per day. In recent years, significant project activity has enabled the reinjection of produced hydrogen sulfide and carbon dioxide into nonproducing areas of the field.
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Development drilling of tight gas continues in the Piceance Basin in western Colorado.

 


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44  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
California – Average daily net production from ExxonMobil’s offshore and onshore California assets averaged 119 thousand barrels of liquids per day and 44 million cubic feet of gas per day in 2007.
The Santa Ynez Unit, located 20 miles west of Santa Barbara, consists of three offshore platforms in the Pacific Ocean’s Outer Continental Shelf and a processing plant in Las Flores Canyon. ExxonMobil also has a 48-percent equity share in the Aera onshore operations, comprising 15 fields and about 12,000 wells producing a mixture of heavy and conventional oil with associated gas.
Alaska – ExxonMobil is among the largest oil and gas producers in Alaska with average daily net production of 132 thousand barrels per day of liquids and 6 million cubic feet per day of gas in 2007.
Key assets include a 36-percent working interest in Prudhoe Bay and a 37-percent interest in Point Thomson.
ExxonMobil is actively involved in the Prudhoe Bay Western Region development, which will allow new satellite fields to produce into existing infrastructure. In 2007 we continued with additional facility expansion and upgrade activity. Engineering for a new gas processing facility was also advanced.
ExxonMobil is the largest holder of gas resources on the North Slope of Alaska. The Alaska Gas project would enable treatment and transportation of natural gas from the Prudhoe Bay and Point Thomson fields to North American gas markets. Securing predictable and durable fiscal terms with the State of Alaska is necessary to progress planning and execution of this world-scale project.
Coal – In 2007 ExxonMobil produced 2 million metric tons (gross) of coal from the Monterey coal mine in Illinois. In December 2007, mining operations were shut down.
CANADA
ExxonMobil has a leading position in Canada through our wholly owned affiliate ExxonMobil Canada and majority-owned affiliate Imperial Oil (ExxonMobil interest, 69.6 percent). Through these entities, ExxonMobil is a leading crude oil and natural gas producer in Canada and holds one of the country’s largest resource positions. We also have a significant presence in major projects offshore eastern Canada and a well-established production base with expansion opportunities in western Canada.
Offshore Canada Operations – The ExxonMobil-operated Sable Offshore Energy Project (ExxonMobil interest, 51 percent; Imperial Oil interest, 9 percent) consists of five producing fields. Production in 2007 was approximately 405 million cubic feet per day (gross), including 130 million cubic feet of gas per day from the Sable gas compression project that started up in 2006.
The Hibernia field (ExxonMobil interest, 33 percent) is operated by Hibernia Management and Development Company Ltd., using ExxonMobil personnel and processes. In 2007 Hibernia’s production averaged 135 thousand barrels of oil per day (gross).
The co-venturer-operated Terra Nova development (ExxonMobil interest, 22 percent) produces about 119 thousand barrels of oil per day (gross). Located in 315 feet of water, Terra Nova consists of a unique, harsh-environment-equipped FPSO and 26 subsea wells that are expected to recover 400 million oil-equivalent barrels (gross).
The Hebron project (ExxonMobil interest, 38 percent) is a future heavy oil development located in 300 feet of water offshore Newfoundland. Hebron will be designed for harsh arctic conditions using a gravity-based concrete structure to handle peak production of about 140 thousand barrels per day. A Memorandum of Understanding with the province of Newfoundland and Labrador was concluded in August 2007 to facilitate development of the resource, and work on the associated definitive agreements is progressing.
ExxonMobil has interests in four ExxonMobil-operated and four co-venturer-operated deepwater exploration blocks in the Orphan Basin (ExxonMobil interest, 15 percent; Imperial Oil interest, 15 percent), a high-potential, unexplored area with arctic conditions offshore eastern Canada. The first wildcat well in the Orphan Basin was completed in April 2007, and the results are being evaluated.
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The Sable platforms connect five offshore gas fields that supply energy to markets in eastern Canada and the northeastern United States.

 


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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  45
Onshore Canada Operations – The Cold Lake field (Imperial Oil interest, 100 percent) and the Syncrude oil sands mining operation (Imperial Oil interest, 25 percent) in Alberta account for the majority of Imperial Oil’s liquids production in western Canada.
Cold Lake averaged 154 thousand barrels of oil per day (gross) in 2007. At Syncrude, 2007 production of synthetic crude averaged 304 thousand barrels per day (gross).
The Cold Lake field in Alberta is the largest thermal in situ heavy oil project in the world. It has over 4000 wells directionally drilled from satellite pads. Cyclic Steam Stimulation is used to recover bitumen as it is too heavy and viscous for conventional production. Plans are in place to further enhance recovery at Cold Lake by using leading-edge thermal recovery technologies such as LASER (Liquids Addition to Steam for Enhanced Recovery).
The Syncrude Management Services Agreement was implemented in May 2007. This agreement allows ExxonMobil and Imperial Oil management and technical staff to work with Syncrude Canada Limited to improve operating performance through the application of proven operating best practices.
The Kearl Oil Sands project (combined ExxonMobil and Imperial Oil interest, 100 percent) is expected to develop a world-class resource in northern Alberta in three phases. Each phase will produce approximately 100 thousand barrels of bitumen per day (gross) from a resource exceeding 4 billion barrels. Federal and provincial regulatory approvals have been secured. Engineering, design, and execution planning are progressing.
The Mackenzie Gas project includes the development of three onshore fields (ExxonMobil and Imperial Oil hold interests in two of the three fields) containing approximately 6 trillion cubic feet of natural gas. Located in the Mackenzie Delta region of Canada, this development includes a gas processing plant and a 740-mile pipeline that will transport gas to North American markets. The regulatory process continues with a review panel report expected in 2008, followed by a National Energy Board decision in 2009.
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Syncrude, located in the Athabasca region in Alberta, Canada, is the largest oil sands mining and upgrading facility in the world.
SOUTH AMERICA
Brazil – ExxonMobil holds a 40-percent interest in and operatorship of Block BM-S-22, located in the high-potential subsalt play of the Santos Basin, offshore Brazil. BM-S-22 is a 342,000-acre block in water depths over 7400 feet. 3D seismic data were acquired in 2005 and processed in 2006. Wildcat drilling plans are progressing.
Colombia – In 2007 the first exploration well was drilled in the Tayrona block (ExxonMobil interest, 40 percent). This is a 5.5-million-acre block with water depths up to 10,500 feet in the Caribbean Sea, off the north coast of Colombia. Further drilling plans are being assessed to ensure thorough exploration of this large block.
Venezuela – Following the expropriation of our assets in Venezuela effective June 27, 2007, ExxonMobil has attempted to work with the Venezuelan government to reach an agreement regarding compensation based on the fair market value of the assets. Discussions with Venezuelan authorities over compensation have not resulted in an agreement on the amount to be paid. ExxonMobil’s affiliates have submitted the dispute against Venezuela to the International Centre for Settlement of Investment Disputes in September 2007, and have filed a related arbitration against Venezuela’s national oil company (PdVSA) and a PdVSA affiliate with the International Chamber of Commerce in January 2008. ExxonMobil previously operated the Cerro Negro field (ExxonMobil interest, 42 percent), which produced an average of 76 thousand barrels of extra heavy oil per day (gross) in 2007, while ExxonMobil held an equity position.
Other South America – In Argentina, ExxonMobil holds a 51-percent interest in the Chihuidos field and a 23-percent interest in the Aguarague concession. In 2007 net daily gas production of 63 million cubic feet was sold into markets in Argentina and Chile. In addition the company holds exploration rights in the Stabroek block offshore Guyana.
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Europe
ExxonMobil is one of the largest producers of hydrocarbons in Europe. The company has upstream interests in Norway, the United Kingdom, the Netherlands, Germany, Italy, and Ireland. Extensive North Sea oil and natural gas production operations and significant onshore natural gas production are among the company’s key assets. ExxonMobil’s operations in Europe accounted for about 27 percent of the company’s 2007 net oil and gas production and about 23 percent of Upstream earnings.
Europe Highlights
                         
    2007   2006   2005
Earnings (billions of dollars)
    6.1       6.5       6.9  
Proved Reserves(1)(BOEB)
    3.8       3.9       4.3  
Acreage (gross acres, million)
    24.3       18.8       20.1  
Net Liquids Production (MBD)
    0.5       0.5       0.5  
Net Gas Available for Sale (BCFD)
    3.8       4.1       4.3  
 
(1)   See Frequently Used Terms on pages 94 through 97.
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The North Sea continues to be an area of strong production for ExxonMobil. Activities continue in all sectors, from execution of new greenfield projects to programs that maximize recovery in mature assets. A major project to deliver liquefied natural gas (LNG) to the United Kingdom is progressing in Wales, and exploration is progressing offshore Ireland.
On the continent, ExxonMobil has significant gas holdings in the Netherlands and Germany, and is the largest gas producer in Germany. A major project to deliver LNG to Italy is progressing.
NORWAY
ExxonMobil is among the largest oil and gas producers in Norway, with average daily net production of 319 thousand barrels per day of liquids and 705 million cubic feet per day of gas in 2007.
ExxonMobil has been an industry pioneer in Norway, capturing the first oil and gas licenses and drilling Norway’s first discovery well in the 1960s. We operate four major producing fields including Ringhorne (ExxonMobil interest, 100 percent) and Ringhorne East (ExxonMobil interest, 77 percent), which are located 110 miles west of Stavanger. Since being brought onstream in 2003, Ringhorne has produced 135 million barrels of oil and produced 101 thousand oil-equivalent barrels per day (gross) in 2007.
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The ExxonMobil-operated Ringhorne platform is 110 miles offshore Norway in 410 feet of water.

 


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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  47
ExxonMobil also has equity in more than 20 producing fields. In the Statfjord field (ExxonMobil interest, 21 percent) the “Late Life” project to improve recovery and increase field life started up in 2007.
The Ormen Lange field (ExxonMobil interest, 7 percent) has been developed with subsea wells and associated infrastructure in about 3000 feet of water, with produced hydrocarbons flowing 75 miles to shore. Gas is processed at a new plant at Nyhamna before being transported 750 miles through the Langeled subsea export pipeline, via the Sleipner platform, to the Easington terminal in the United Kingdom. Gas from the Ormen Lange field began flowing in September 2007, and will have the capacity to provide 20 percent of the U.K.’s gas needs.
The Volve field (ExxonMobil interest, 30 percent) will start up in 2008 as an eight-well development, with production capacity of 50 thousand barrels per day of liquids and 30 million cubic feet per day of gas (gross).
(PICTURE)
The joint-venturer-operated Caravel field in the U.K. North Sea is being developed with a monotower design.
UNITED KINGDOM
ExxonMobil is one of the largest oil and gas producers in the United Kingdom, with average daily net production of 150 thousand barrels per day of liquids and 779 million cubic feet per day of gas in 2007.
ExxonMobil operates eight fields in the northern North Sea and has interests in about 50 producing fields that are operated by others as part of joint operations.
We are the operator of the Scottish Area Gas Evacuation (SAGE) gas plant at St. Fergus and the SAGE pipeline that transports gas from the Beryl Area fields to the gas plant. The company’s mature operations at Beryl and the SAGE gas plant are key contributors to U.K. energy supply.
The South Hook LNG regasification terminal in Milford Haven, Wales, will start up in 2008. This former ExxonMobil refinery site is being redeveloped for receipt, storage, and regasification of LNG. The terminal will have the capacity to deliver up to 2 billion cubic feet of gas daily into the U.K. natural gas grid.
ExxonMobil’s offshore portfolio remains an area of significant activity. In the southern North Sea, an innovative single-leg platform design known as a “monotower” has been utilized to develop the joint-venturer-operated Caravel field (ExxonMobil interest, 29 percent). Caravel will start up in 2008.
In the central North Sea, start-up of production from the joint-venturer-operated Starling gas condensate field (ExxonMobil interest, 72 percent) began in January 2008.
Additionally, planning is under way to drill a wildcat well on ExxonMobil’s Mid North Sea High license.
(PICTURE)
Construction progresses on the South Hook LNG regasification terminal in Milford Haven, Wales.

 


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48  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
THE NETHERLANDS
ExxonMobil is among the largest gas producers in the Netherlands, primarily through its shareholding in NAM (Nederlandse Aardolie Maatschappij). NAM is a 50-percent ExxonMobil equity company that produces gas from more than 100 fields located both onshore and offshore.
NAM’s operations include Groningen, the largest gas field in western Europe, with estimated ultimate recoverable resources of over 100 trillion cubic feet of gas. The field has been producing since 1963. A major renovation project is nearing completion to ensure the long-term integrity of existing facilities, and to install new compression equipment to maintain capacity and extend field life.
Currently, NAM’s biggest offshore development project is L09 (ExxonMobil interest, 25 percent). L09 is being developed in parallel with the Caravel project in the U.K. sector of the North Sea and utilizes the same monotower development concept. By using a standard design and combined project team for L09 and Caravel, significant efficiencies have been achieved. The L09 platform and pipelines were installed in 2007 and first gas is expected in 2008.
During 2007 NAM funded the Schoonebeek Redevelopment project. This enhanced oil recovery steamflood project is expected to start up in 2010 and will have 20 thousand barrels per day (gross) capacity.
(PICTURE)
The giant onshore Groningen gas field is capable of producing up to 12 billion cubic feet per day to supply Europe’s growing gas demand.
GERMANY
ExxonMobil is Germany’s largest gas producer with average daily net production of 775 million cubic feet per day of gas in 2007. Our 55 operated gas fields account for about three-quarters of all natural gas produced in the country. We drill approximately ten wells every year, some reaching depths in excess of 16,000 feet.
Approximately half of the gas production is sour, containing up to 36 percent hydrogen sulfide. The sour gas is processed at the Grossenkneten or NEAG sulfur-recovery plants. The company also operates a number of large compressor stations to maximize field depletion.
ExxonMobil’s portfolio in Germany also includes new exploration opportunities. ExxonMobil subsidiaries are evaluating four large exploration licenses that were awarded in 2007 by the Lower Saxony and North Rhine-Westphalia states. The licenses cover 1.3 million acres of the Lower Saxony Basin, and ExxonMobil operates these licenses with a 67-percent interest. Drilling is expected to commence in 2008.
BEB Transport GmBH (ExxonMobil interest, 50 percent) and ExxonMobil Gastransport Deutschland GmBH (ExxonMobil interest, 100 percent) both own regional gas pipeline networks in northwest Germany with a combined pipeline length of approximately 2300 miles. In 2007 a marketing effort resulted in an agreement for the sale of the transport businesses to N.V. Nederlandse Gasunie. Financial close of the transaction is scheduled for 2008.
(PICTURE)
The Grossenkneten plant (ExxonMobil interest, 67 percent) started up in 1972. Sulfur is removed using three processing trains to improve the quality of the sales gas.

 


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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  49
ITALY
Adriatic LNG Terminal The Adriatic LNG terminal will be the world’s first fixed offshore LNG storage and regasification terminal. The concrete, gravity-based structure (GBS) is currently under construction in Algeciras, Spain (photo below). It contains two large LNG storage tanks and supports topside regasification equipment.
Once construction of the GBS is complete, the dry dock will be slowly flooded (left panel of graphic, below) to allow the GBS to be towed from Spain to Italy.
Using a combination of boats and winches, the GBS will be moved out of the dry dock and into the open water. The GBS will be towed approximately 1700 nautical miles to a location offshore the northeast coast of Italy in the Gulf of Venice (center panel of graphic, and map).
At its final destination, the GBS will be lowered securely to the seabed for final commissioning, start-up, and operation. LNG ships, primarily from Qatar, will discharge cargo at the Adriatic LNG terminal (right panel of graphic), where the LNG will be converted back into gas for delivery to shore via an export pipeline supplying up to 775 million cubic feet of gas per day to the Italian market.
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Tempa Rossa In southern Italy, the Tempa Rossa project (ExxonMobil interest, 25 percent) is expected to develop over 200 million oil-equivalent barrels (gross). Planning for construction of the oil facilities and export system is under way. These facilities will produce at a peak rate of 50 thousand barrels of oil per day along with associated natural gas and liquefied petroleum gas, which will be handled in a separate storage and loading facility. Construction is planned to begin in 2008.
IRELAND
In the Porcupine Basin, a frontier area approximately 125 miles off the southwest coast of Ireland, ExxonMobil has an 80-percent interest in the 320,000-acre Dunquin license. Evaluation of a 2D seismic survey is progressing.

 


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Africa
ExxonMobil is one of the largest oil and gas producers in Africa. ExxonMobil’s operations in Africa accounted for about 17 percent of the company’s 2007 net oil and gas production and 21 percent of Upstream earnings, with those percentages expected to increase as new projects begin producing.
ExxonMobil has exploration and production operations in Angola, Chad, Cameroon, Equatorial Guinea, and Nigeria. Exploration activities are also ongoing in Libya, Madagascar, and the Republic of Congo. ExxonMobil is also progressing LNG opportunities in the region. In deepwater areas offshore Africa, ExxonMobil holds interests in 29 blocks, totaling more than 25 million gross acres. ExxonMobil participated in 17 West Africa deepwater exploration wells completed in 2007.
Africa Highlights
                         
    2007   2006   2005
Earnings (billions of dollars)
    5.5       5.5       3.7  
Proved Reserves(1) (BOEB)
    2.4       2.4       2.7  
Acreage (gross acres, million)
    41.8       41.1       50.8  
Net Liquids Production (MBD)
    0.7       0.8       0.7  
Net Gas Available for Sale (BCFD)
                 
 
(1)   See Frequently Used Terms on pages 94 through 97.
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ANGOLA
ExxonMobil has interests in four deepwater blocks that cover more than 3 million gross acres. The company and its co-venturers have announced a total of 58 discoveries in Angola, representing world-class development opportunities with a recoverable resource potential of about 14 billion oil-equivalent barrels (gross).
During 2007, ExxonMobil production in Angola averaged about 170 thousand barrels of oil per day (net). Development drilling in current fields continues. On ExxonMobil-operated Block 15, the Marimba North project started up in 2007. The Kizomba C-Mondo project started up in early 2008, and the Kizomba C-Saxi/Batuque project will start up later in 2008. Following the start-up of the Dalia project on Block 17 in 2006, Rosa began production in 2007. Development planning for the many discoveries in Block 31 and Block 32 is progressing.
ExxonMobil makes significant contributions to Angola’s development, not only through oil production and revenues, but in other important areas such as employment, education, and local supplier and infrastructure development. Project expenditures on Angolan goods and services, including contracts for in-country fabrication, have totaled nearly $4 billion to date, resulting in the increased capacity of Angolan suppliers to execute the complex work required for future projects.
Angola Block 15 – ExxonMobil was awarded Block 15 in 1994, and the first discovery was made in 1998. ExxonMobil operates the license with a 40-percent working interest. To date, a total resource of nearly 5 billion oil-equivalent barrels has been discovered on the block. First oil was produced in November 2003 from the Xikomba field, followed by Kizomba A in 2004 and Kizomba B in 2005.
(PICTURE)
Our workforce in Angola has grown from 12 in 1994 to almost 700 today — about two-thirds of whom are Angolan.

 


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In 2007 the Marimba North field began production. Marimba North is the first subsea tie-back to the Kizomba A infrastructure. With this development, combined daily production on the block averaged about 530 thousand barrels per day (gross) in 2007. Also in 2007, a project was sanctioned that will gather associated gas from various fields on the block for use at the proposed Angola LNG facility in Soyo.
The Kizomba C-Mondo project began production on January 1, 2008. Kizomba C exemplifies ExxonMobil’s “Design One, Build Multiple” strategy as it includes two projects, Mondo and Saxi/Batuque, each utilizing a floating production, storage, and offloading (FPSO) vessel that will handle 100 thousand barrels per day at peak production (gross). Together, these developments will recover approximately 600 million barrels of oil (gross). Fabrication of surface and subsea components was conducted in Angola, while the two FPSO conversions were carried out in Singapore. Start-up of the Saxi/Batuque project is planned for 2008. Planning continues to progress development of the remaining discovered resources on Block 15.
(MAP)
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Kizomba C-Mondo project started up on January 1, 2008.
Angola Block 17 ExxonMobil owns a 20-percent interest in Block 17, where the first discovery was made in 1996. Through year-end 2007, there have been 15 announced discoveries on the block with a total resource estimate of nearly 6 billion oil-equivalent barrels. A number of projects have started up, including Girassol in 2001, Dalia in 2006, and Rosa in 2007. The next development will be Pazflor, located 100 miles offshore in 2600 feet of water. An FPSO vessel will be used to produce 200 thousand barrels per day (gross). Project execution activities will begin in 2008.
Angola Block 31 ExxonMobil was awarded a 25-percent interest in Block 31 in 1999, and the first discovery was made in 2002. Through year-end 2007, there have been 15 announced discoveries with a total resource of approximately 2 billion oil-equivalent barrels on the block. The first development is expected to be the Plutao-Saturno-Venus-Marte (PSVM) hub located in the northern part of the block.
A single, 150-thousand-barrel-per-day FPSO is planned for the four fields to produce an initial developed resource of 500 million barrels of oil (gross). The water depth ranges from 5900 to 6700 feet, the deepest yet for a West Africa development project. Planning for development of a second hub in the southeast part of the block is under way.
Angola Block 32 ExxonMobil was awarded a 15-percent interest in Block 32 in 1999 and the first discovery was made in 2003. Through year-end 2007, there have been 12 announced discoveries with a total resource of approximately 1.5 billion oil-equivalent barrels on the block. The first development being planned is the Gindungo-Canela-Gengibre (GCG) hub in the east-central part of the block. A single FPSO is planned for the three fields to develop a combined resource of 300 million barrels of oil (gross). The water depth ranges from 4700 to 5600 feet. Additional exploration wells are planned in 2008.

 


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(MAP)
NIGERIA
ExxonMobil is active on both shallow and deepwater acreage in Nigeria. In shallow water, ExxonMobil operates a joint venture with the Nigerian National Petroleum Corporation (ExxonMobil interest, 40 percent for crude and condensate; 51 percent for natural gas liquids) that covers over 800,000 acres in five leases offshore southeastern Nigeria. In deep water, ExxonMobil has interests in nine blocks that include the Bonga, Bosi, Bolia, Erha, Uge, and Usan discoveries. In 2007 ExxonMobil produced an average of 415 thousand barrels of liquids per day (net) offshore Nigeria.
Nigeria Deepwater Development
ExxonMobil continues to explore Nigeria’s deepwater potential, looking for opportunities that leverage our expertise, technology, and capability in West Africa. Following the start-up of the ExxonMobil-operated Erha/Erha North project in 2006, the co-venturer-operated Usan and Bonga Northwest projects are scheduled to begin execution with the award of engineering, procurement, and construction (EPC) contracts in 2008. Development planning continues for the ExxonMobil-operated Bosi and co-venturer-operated Bonga Southwest and Bonga North projects.
Erha/Erha North The world-class Erha development (ExxonMobil interest, 56 percent) is located 60 miles offshore in 3900 feet of water. Starting up in March 2006, Erha is ExxonMobil’s first operated deepwater production in Nigeria. A satellite development, Erha North, came online in September 2006, just 30 months after discovery — a record for Nigeria deepwater. The combined development consists of over 30 subsea wells tied back to an FPSO vessel, with a capacity of over 200 thousand barrels per day. Produced associated gas is reinjected for reservoir management. Performance in 2007 was strong, with average production of 200 thousand barrels per day (gross). Erha North Phase 2 is currently in the planning stage.
Bosi The Bosi development (ExxonMobil interest, 56 percent) consists of an FPSO vessel and subsea system that would become ExxonMobil’s deepest operated development to date, in over 5500 feet of water. Development planning optimization work continues. Bosi is expected to produce approximately 135 thousand barrels of oil per day from the Bosi and Bosi Southwest fields.
Usan Usan (ExxonMobil interest, 30 percent) is a co-venturer-operated development located 60 miles offshore Nigeria in 2500 feet of water. It is designed to recover over 500 million barrels of oil (gross). Engineering, procurement, and construction contracts are expected to be awarded early in 2008 to build a new 180-thousand-barrel-per-day FPSO vessel.
Bonga North and Northwest Subsequent to the start-up of Bonga in 2005, two subsea tieback opportunities are progressing. As planned, Bonga North and Bonga Northwest (ExxonMobil interest, 20 percent) would develop a combined 350 million barrels of oil (gross).
Bonga Southwest The Bonga Southwest project (ExxonMobil interest, 16 percent) is advancing. As designed, this FPSO development will handle 140 thousand barrels per day of peak production.
OPL 214 ExxonMobil was awarded operatorship of OPL 214 (ExxonMobil interest, 20 percent) in 2001. The first discovery, Uge, was made in 2005, and an appraisal well was successfully completed in 2007. Planning for development is under way, and exploration continues on the block with a wildcat well in 2008.
(PICTURE)
The Erha field’s offshore loading buoy, one of the largest in the world, was fabricated in Lagos, Nigeria.

 


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(PICTURE)
New production facilities for the East Area NGL II project offshore Nigeria were installed in 2007.
Nigeria Joint Venture — Shelf Development
In the joint-venture area, activities are progressing to increase production capacity as well as develop additional resources. Production growth will result from development drilling, enhanced recovery projects, and a series of platform upgrades that will also serve to improve facility integrity. The East Area Natural Gas Liquids II (NGL II) and the Satellite Field Development projects are currently under way.
East Area NGL II Following the start-up of the East Area Additional Oil Recovery (AOR) project in 2006, the East Area NGL II expansion project (ExxonMobil interest, 51 percent) is expected to start up in 2008. The project includes offshore facilities to extract natural gas liquids, an 89-mile pipeline to shore, and expansion of the Bonny River terminal for further fractionation and offloading. The development will recover 300 million barrels of natural gas liquids and is part of ExxonMobil’s ongoing efforts to reduce flaring and emissions.
Satellite Field Development The Satellite Field Development project targets 20 undeveloped oil fields and 15 infill platform opportunities with total recoverable resources exceeding 1 billion barrels of oil (gross).
EQUATORIAL GUINEA
ExxonMobil is the largest producer in Equatorial Guinea and operates two blocks that cover over 500,000 acres (gross). The Zafiro field is in Block B (ExxonMobil interest, 71 percent) in water depths between 400 and 2800 feet. In 2007 Zafiro production averaged approximately 210 thousand barrels of oil per day (gross) through the Serpentina FPSO, the Jade Platform, and the Zafiro Producer, a floating production unit. Exploration drilling continued on both Blocks B and C in 2007.
CHAD
ExxonMobil is the primary producer in Chad, with average production in 2007 of 50 thousand barrels of oil per day (net). Development drilling is continuing in the Three Fields area (Kome, Miandoum, and Bolobo). The Maikeri field began production in 2007, and the Timbre field is expected to begin production in 2008. Waterflood projects were started up in 2007 to recover additional reserves.
MADAGASCAR
In 2004 and 2005, ExxonMobil captured a large acreage position and currently holds over 18 million acres (gross) in four frontier exploration blocks offshore northwestern Madagascar. ExxonMobil has implemented a phased approach to its exploration program. Through year-end 2007, activity has included acquisition of new 2D and 3D seismic data.
CONGO
ExxonMobil was awarded a 30-percent interest in the Mer Tres Profonde Sud block in 1997. The first discovery was made in 2000, and there were two new discoveries in 2007. Through year-end 2007, there have been five announced discoveries with a total resource of approximately 500 million oil-equivalent barrels on the block. Planning for development is under way. The water depth ranges from 6200 to 6900 feet. The exploration program continues with a new 3D seismic survey acquired in 2007.
ExxonMobil was awarded a 40-percent interest in Mer Tres Profonde Nord in 1997. A new 3D seismic survey was acquired in 2007, and additional exploration activities are planned for late 2008 or early 2009.
LIBYA
A 2D seismic survey on Contract Area 44, offshore northeast Libya, was completed in February 2007. Evaluation of these data is in progress, and a wildcat well is planned.
Contract Area 20 was officially awarded to ExxonMobil in 2007 after a successful license-round application. The license covers 2.5 million acres in an undrilled area of the offshore Sirte Basin, in water depths up to 6000 feet. Acquisition of a large 2D seismic survey over the area commenced in 2007 and is likely to lead to drilling in 2009.
In November 2007 ExxonMobil signed a Heads of Agreement to execute an Exploration and Production Sharing Agreement with Libya’s National Oil Corporation to initiate exploration activity in Contract Area 21 in the Sirte Basin, approximately 110 miles offshore. The contract area comprises 2.5 million acres and is situated in water depths ranging from approximately 5400 feet to 8700 feet. The work program will consist of 2D and 3D seismic surveys in preparation for an exploration well.

 


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54  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
Asia Pacific/Middle East
ExxonMobil’s operations in the Asia Pacific/Middle East region accounted for about 25 percent of the company’s 2007 net oil and gas production and about 18 percent of Upstream earnings. Those percentages are expected to increase in the future, primarily due to new developments expected to come onstream in Qatar.
Asia Pacific/Middle East Highlights
                         
    2007     2006     2005  
Earnings (billions of dollars)
    4.9       4.1       3.3  
Proved Reserves(1) (BOEB)
    8.3       8.1       6.3  
Acreage (gross acres, million)
    29.0       21.7       15.0  
Net Liquids Production (MBD)
    0.5       0.5       0.3  
Net Gas Available for Sale (BCFD)
    3.2       2.6       2.1  
 
(1)   See Frequently Used Terms on pages 94 through 97.
(BAR CHART)
(GRAPHIC)
AUSTRALIA
ExxonMobil continues to be a leading oil and gas producer in Australia. In 2007 daily net production was 66 thousand barrels of liquids and 389 million cubic feet of gas per day.
The Kipper/Tuna project (ExxonMobil interest, Kipper 32.5 percent, Tuna 50 percent) in the Bass Strait progressed into the execution phase. Another project in the Bass Strait, Turrum (ExxonMobil interest, 50 percent), progressed into the detailed design phase.
In the Greater Gorgon area offshore Western Australia (ExxonMobil interest, 25 percent), engineering optimization, design enhancement studies, and front-end execution planning progressed during 2007. As presently designed, the project will include parallel development of the Gorgon and deepwater Jansz gas fields and installation of a 15-million-tons-per-year LNG facility on Barrow Island. This project will also include one of the largest carbon sequestration efforts in the world, which will help minimize emissions. State and federal environmental approvals were secured for a liquefaction plant on Barrow Island, and additional regulatory approval activities will continue in 2008. The project has the potential for future expansion to fully develop discovered resources of 40 trillion cubic feet of gas (gross) and additional exploration potential.
Development planning progressed on the Scarborough project (ExxonMobil interest, 50 percent). Scarborough is also located offshore Western Australia and has a resource of approximately 10 trillion cubic feet of gas (gross).
In 2007 ExxonMobil was awarded the prospective WA-392-P block southwest of the Gorgon-Jansz discoveries. We also completed a farm-in to the remainder of block WA-268-P (ExxonMobil interest, 25 percent) following the successful Chandon-1 well drilled in this block in 2006.
ExxonMobil acquired a 65-percent interest in the 820,000-acre WA-318-P block in the Bonaparte Basin offshore northern Australia. Seismic data acquisition is planned for 2008.
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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  55
INDONESIA
ExxonMobil operates Indonesia’s Arun gas field (ExxonMobil interest, 100 percent), which supplies gas to the PT Arun LNG plant. In 2007 net production from the Arun field, Arun satellite fields, and the North Sumatra Offshore field averaged 286 million cubic feet of gas per day.
Activities continue for the Banyu Urip development in the Cepu Contract Area, onshore Java (ExxonMobil interest, 45 percent). Appraisal drilling and front-end engineering design are progressing in preparation for the tendering of major engineering, procurement, and construction contracts.
ExxonMobil, along with co-venturer PT Pertamina (Persero), continues to progress development plans for the Natuna D-Alpha gas field, a large offshore gas field containing over 70 percent CO2. Discussions are ongoing with the Indonesian government seeking mutually agreeable revisions to the current production sharing contract.
In 2007 ExxonMobil was awarded a 100-percent interest in the 1-million-acre Mandar block offshore Sulawesi in the Makassar Strait. We also acquired 2D seismic data over the Surumana block (ExxonMobil interest, 100 percent) located 160 miles to the north. We plan to initiate drilling on the Surumana block in 2008.
(GRAPHIC)
(Above) Appraisal drilling in preparation for development of the Banyu Urip field began in 2007. (Below) As planned, the Banyu Urip development consists of about 50 wells, a 20-thousand-barrels-of-oil-per-day early production facility, an onshore central processing facility capable of handling 165 thousand barrels per day, and a 60-mile pipeline that connects to a 2-million-barrel floating storage and offloading vessel (FSO).
(GRAPHIC)
MALAYSIA
ExxonMobil is a leading oil producer in Malaysia and the largest supplier of natural gas to Peninsular Malaysia. Net production in 2007 was 67 thousand barrels of liquids per day and 583 million cubic feet of gas per day. The company operates 42 platforms offshore Peninsular Malaysia. In 2007 ExxonMobil continued with its gas development program in the South China Sea to develop additional capacity to meet Malaysia’s growing gas demand. The Tabu and Tapis F Gas projects, part of the overall Guntong Hub development (ExxonMobil interest, 50 percent), commenced a 22-well drilling program that is expected to deliver 170 million cubic feet per day of gas to Peninsular Malaysia.
In early 2008, ExxonMobil installed the Jerneh-B platform (ExxonMobil interest, 100 percent) in the South China Sea. This seven-well project will develop over 500 billion cubic feet of gas (gross) with peak production of 150 million cubic feet per day.
NEW ZEALAND
ExxonMobil was awarded the 4-million-acre PEP50117 license (ExxonMobil interest, 90 percent) in the Great South Basin in 2007 and is acquiring seismic data in preparation for a potential exploratory drilling program.
PHILIPPINES
Evaluation of the SC-56 block (ExxonMobil interest, 50 percent) continued with acquisition of a 3D seismic survey in 2007.
PAPUA NEW GUINEA
In 2007 ExxonMobil net production averaged 8 thousand barrels of oil per day. Evaluation of a 6.3-million-tons-per-year LNG development (ExxonMobil interest, 34 percent) progressed in preparation for a near-term decision to commence front-end engineering and design work. Also in 2007, two wells were drilled at the onshore Juha structure to further define the gas resource.
HONG KONG POWER
Through a partnership with CLP Holdings, ExxonMobil has a 60-percent interest in the Castle Peak Power Company in Hong Kong with 6900 megawatts of power generation capacity, and a 51-percent interest in 600 megawatts of pumped storage capacity in southern China. This capacity primarily serves the Hong Kong market. A major project is under way at the Castle Peak power station to reduce emissions of sulfur dioxide, nitrogen oxides, and particulates.

 


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56  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
QATAR
Through the Qatar joint ventures, ExxonMobil and Qatar Petroleum are developing the North Field, the largest non-associated gas field in the world. Resources exceeding 25 billion oil-equivalent barrels (gross) will be developed through existing and planned projects with ExxonMobil interest. Natural gas from the North Field is cost competitive for supplying LNG to the Asia Pacific region, Europe, and North America.
LNG production from ExxonMobil-interest trains in Qatar was nearly 30 million tons in 2007 (gross). ExxonMobil participates in all of the existing Qatargas and RasGas trains (ExxonMobil interest ranges from 10 to 34 percent). The Al Khaleej domestic gas operation (ExxonMobil interest, 100 percent) produced 676 million cubic feet per day in 2007. Also in 2007, ExxonMobil initiated an onshore exploration program in Qatar.
RasGas Train 5 ExxonMobil and Qatar Petroleum began early production of LNG from Ras Laffan Liquefied Natural Gas Company II Train 5, just 29 months after award of major construction contracts, a world record for a train of this size. The project was completed under budget with the start-up of the offshore production facilities in January 2007.
Qatargas II Trains 4 and 5 Work continues on Qatargas II LNG Trains 4 and 5, each with an annual capacity of 7.8 million tons. Drilling has been completed and the offshore platforms and pipelines for Train 4 have been installed. Train 4 will be the largest in the world at start-up in 2008. Train 5 will start up in 2009. Deliveries from Qatargas II are planned primarily for the United Kingdom gas market via the South Hook LNG regasification terminal.
(GRAPHIC)
Construction on Qatargas II Trains 4 and 5 is advancing. These trains will export LNG to world markets utilizing the Port of Ras Laffan, shown in the distance.
Al Khaleej Gas Since 2005 the Al Khaleej Gas project Phase 1 (AKG-1) has helped supply Qatar’s domestic natural gas market. The second phase, AKG-2, is currently under construction and will supply 1.25 billion cubic feet per day of gas to meet the growing domestic demand, as well as export 70 thousand barrels per day of liquids. Start-up is expected in 2009.
Barzan The initial phase of the Barzan project will supply domestic gas to meet Qatar’s rapidly growing infrastructure and industry requirements. Qatar Petroleum and ExxonMobil signed a Heads of Agreement in 2007 to form a joint venture to develop all future phases of the Barzan project. It is expected that the initial phase of the Barzan project will yield about 1.5 billion cubic feet per day of sales gas.
Qatar Existing and planned LNG Trains
                     
Joint       Capacity   Working   Scheduled
Venture   Train   (MTA)(1)   Interest(%)   Completion
 
Qatargas
  1,2,3   9.7   10   Complete
Qatargas II
  4   7.8   30     2008
 
  5   7.8   18     2009
RasGas
  1,2   6.6   25   Complete
 
  3   4.7   30   Complete
 
  4   4.7   34   Complete
 
  5   4.7   30   Complete
 
  6   7.8   30     2008  
 
  7   7.8   30     2009
Total
 
61.6
 
 
(1)   Million tons per year.
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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  57
(GRAPHIC)
The world’s first Q-Flex LNG ship, the Al Gattara, is shown entering the Port of Ras Laffan, Qatar. Q-Flex ships are 45 percent larger than conventional-size LNG ships and employ more efficient propulsion systems. The ExxonMobil joint ventures, Qatargas and RasGas, will charter 20 Q-Flex and seven Q-Max ships. The Q-Max ship is 80 percent larger than conventional-size ships. The increase in ship size was made possible by the use of ExxonMobil proprietary technology, and the Qatargas and RasGas joint ventures will benefit from approximately 30 percent lower shipping costs.
RasGas Trains 6 and 7 RasGas will build and operate two 7.8-million-tons-per-year LNG trains owned by Ras Laffan Liquefied Natural Gas Company 3, a joint venture between Qatar Petroleum and ExxonMobil. Train 6 is planned to start up in 2008 and will primarily supply the U.S. market via the Golden Pass LNG regasification terminal. Train 7 will supply Asia and other parts of the world beginning in 2009. Construction is in progress on both liquefaction trains and also on two offshore production platforms to supply feed gas from Qatar’s North Field. The engineering, procurement, and construction of the large trains has benefited from execution learnings and project team experiences with RasGas Trains 3, 4, and 5.
Qatar Common Facilities ExxonMobil is working with RasGas and Qatargas to construct common infrastructure to support the storage and loading of LNG, condensate, LPGs, and sulfur for many projects in Ras Laffan Industrial City. This shared approach is resulting in billions of dollars of savings over standalone construction costs.
(GRAPHIC)
Construction is well under way on the 7.8-million-tons-per-year RasGas Trains 6 and 7 (foreground) in Qatar.
UNITED ARAB EMIRATES
ExxonMobil participates in two oil concessions in the United Arab Emirates, one onshore and one offshore. In 2007 daily net production from the onshore concession was 131 thousand barrels of oil. Daily net production from the Upper Zakum offshore concession was 145 thousand barrels of oil.
Upper Zakum (ExxonMobil interest, 28 percent) is one of the world’s largest oil fields, with approximately 50 billion barrels originally in place, and less than 10 percent of the resource produced to date. ExxonMobil’s capability to improve oil recovery, build production capacity, transfer technology, and develop staff was key to our entry in the field in 2006. In 2007 the ExxonMobil Technology Center was opened in Abu Dhabi to allow staff working on Upper Zakum access to industry’s most advanced technology in the areas of reservoir management, well management, and production operations.
(GRAPHIC)
The ExxonMobil Technology Center in Abu Dhabi opened in 2007 for application in the Upper Zakum field.

 


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58  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
Russia/Caspian
ExxonMobil’s operations in the Russia/Caspian region accounted for about 5 percent of the company’s 2007 net oil and gas production and about 9 percent of Upstream earnings, with those percentages expected to increase as new projects come onstream. In the Caspian, ExxonMobil holds the unique position of participating in the development of three of the largest fields in the world: Kashagan and Tengiz in Kazakhstan, and Azeri-Chirag-Gunashli in Azerbaijan.
Russia/Caspian Highlights
                         
    2007     2006     2005  
Earnings (billions of dollars)
    2.4       1.2       0.9  
Proved Reserves(1) (BOEB)
    2.0       2.1       2.2  
Acreage (gross acres, million)
    2.5       2.7       3.1  
Net Liquids Production (MBD)
    0.2       0.1       0.1  
Net Gas Available for Sale (BCFD)
    0.1       0.1       0.1  
 
(1)   See Frequently Used Terms on pages 94 through 97.
(GRAPHIC)
(GRAPHIC)
RUSSIA
ExxonMobil operates and holds a 30-percent interest in the Sakhalin-1 blocks offshore Sakhalin Island, eastern Russia. Production from Phase 1 commenced in 2005, and the permanent onshore processing facilities and export system were commissioned in 2006.
Exploration activities on the Sakhalin-III blocks are pending resolution of award of exploration and production licenses by the Russian government. ExxonMobil continues to pursue new opportunities to participate jointly with Russian companies in Russia’s energy industry.
Sakhalin-1 Chayvo Sakhalin-1 Chayvo achieved peak production of 250 thousand barrels per day in February 2007. By year-end 2007, more than 132 cargoes carrying 94 million barrels had been loaded through a single-point mooring system offshore the DeKastri terminal. Sakhalin-1 is also delivering an average of 115 million cubic feet of gas per day to the Russian domestic market.
In October 2006, a Heads of Agreement was signed with China National Petroleum Company (CNPC) for gas pipeline sales from Sakhalin-1 to China. Other regional gas export options continue to be evaluated.
Sakhalin- 1 Future Phases The next phases of the Sakhalin-1 project include the development of the offshore Odoptu and Arkutun-Dagi fields. For Odoptu, concept selection and preliminary engineering began in 2006, and for Arkutun-Dagi, similar work activities began in 2007. Appraisal activities are planned for Arkutun-Dagi in 2008. Both projects will benefit from the infrastructure and learnings from Chayvo.
(GRAPHIC)
Ice-strengthened tankers, like this one shown in partially-frozen waters, are loaded every three to four days at the loading structure located offshore DeKastri.

 


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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  59
AZERBAIJAN
Phase 1 and 2 developments of the Azeri portion of the Azeri-Chirag-Gunashli (ACG) field (ExxonMobil interest, 8 percent) started up in 2005 and 2006, respectively. The Phase 3 development of the deepwater Gunashli area is planned to start up in 2008. Total estimated recovery from Phases 1, 2, and 3 is 5.4 billion oil-equivalent barrels (gross). Total oil production from the ACG field at year-end 2007 was about 700 thousand barrels of oil per day (gross) and is expected to exceed 1 million barrels per day (gross) by 2010.
KAZAKHSTAN
ExxonMobil participates in the Tengizchevroil (TCO) joint venture (ExxonMobil interest, 25 percent), which includes a production license area encompassing the Tengiz field, an associated processing plant complex, and the nearby Korolev field. Including an exploration license adjacent to the production area, TCO holds a total of 608 thousand acres (gross).
(GRAPHIC)
(GRAPHIC)
Initial production from Tengiz Phase 1 onshore Kazakhstan began late 2007.
Under the North Caspian Production Sharing Agreement (ExxonMobil interest, 19 percent, pending final agreements reducing it to 17 percent), development activities are under way to initiate production from the giant Kashagan field, located offshore in the northern Caspian Sea.
Tengiz – The giant Tengiz field in Kazakhstan has produced over 1 billion barrels of oil from a developed resource of over 3 billion barrels. Through 2007, capacity of the field was about 300 thousand barrels of oil per day. Initial oil production from the first expansion, Tengiz Phase 1, was achieved in October 2007. Phase 1 integrates a second-generation gas-handling project with sour-gas injection. Phase 1 will develop about 2.3 billion barrels and provide 285 thousand barrels per day of incremental oil production. Future expansion will develop an additional 1 billion barrels and provide a further 260 thousand barrels per day of incremental capacity.
Kashagan – Full development of Kashagan will occur in phases, with the first phase targeting approximately 3.6 billion barrels of oil (gross) at a production rate of 360 thousand barrels per day. Phase 1, currently under construction, will include an offshore production and separation hub on an artificial island, several drilling islands, three onshore oil-stabilization trains, and two onshore gas treatment plants. Future phases are expected to increase recovery to 12 billion barrels of oil (gross) at a production rate of approximately 1.5 million barrels of oil per day.
(GRAPHIC)
Kashagan Phase 1 will develop 3.6 billion barrels of oil, utilizing artificial islands in the Caspian Sea.

 


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60  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
Upstream Operating Statistics
NET LIQUIDS PRODUCTION(1) — Including Oil Sands and Non-Consolidated Operations
                                         
(thousands of barrels per day)   2007     2006     2005     2004     2003  
 
United States
                                       
Alaska
    132       127       159       174       188  
Lower 48
    260       287       317       383       422  
Total United States
    392       414       477       557       610  
Canada/South America
    324       354       395       408       411  
Total Americas
    716       768       872       965       1,021  
   
Europe
                                       
United Kingdom
    150       186       202       235       278  
Norway
    319       320       327       328       280  
Other
    11       14       17       20       21  
Total Europe
    480       520       546       583       579  
   
Africa
                                       
Nigeria
    415       427       299       276       260  
Angola
    173       193       181       95       43  
Equatorial Guinea
    76       103       122       136       124  
Other
    53       58       64       65       15  
Total Africa
    717       781       666       572       442  
   
Asia Pacific/Middle East
                                       
Australia
    66       69       73       91       111  
Malaysia
    67       64       82       94       105  
Middle East
    374       340       163       158       149  
Other
    11       12       14       17       21  
Total Asia Pacific/Middle East
    518       485       332       360       386  
   
Russia/Caspian
    185       127       107       91       88  
   
Total worldwide
    2,616       2,681       2,523       2,571       2,516  
   
                                         
Gas Plant Liquids Included Above
                                       
United States
    57       61       68       86       90  
Non-U.S.
    166       175       172       168       166  
   
Total worldwide
    223       236       240       254       256  
   
                                         
Oil Sands and Non-Consolidated Volumes Included Above
                                       
United States
    82       87       93       101       106  
Canada/South America
    65       58       53       59       52  
Europe
    6       6       7       9       9  
Asia Pacific/Middle East
    190       172       146       140       127  
Russia/Caspian
    75       71       72       74       71  
   
Total worldwide
    418       394       371       383       365  
   
 
(1)   Net liquids production quantities are the volumes of crude oil and natural gas liquids withdrawn from ExxonMobil’s oil and gas reserves, excluding royalties and quantities due to others when produced, and are based on the volumes delivered from the lease or at the point measured for royalty and/or severance tax purposes. Volumes include 100 percent of the production of majority-owned affiliates, including liquids production from oil sands operations in Canada, and ExxonMobil’s ownership of the production by companies owned 50 percent or less.

 


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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  61
NET NATURAL GAS PRODUCTION AVAILABLE FOR SALE(1) — Including Non-Consolidated Operations
                                         
(millions of cubic feet per day)   2007     2006     2005     2004     2003  
 
United States
    1,468       1,625       1,739       1,947       2,246  
Canada/South America
    808       935       1,006       1,069       1,044  
Total Americas
    2,276       2,560       2,745       3,016       3,290  
   
Europe
                                       
The Netherlands
    1,551       1,536       1,595       1,725       1,591  
United Kingdom
    779       990       1,126       1,196       1,234  
Norway
    705       686       709       645       667  
Germany
    775       874       885       1,048       1,006  
Total Europe
    3,810       4,086       4,315       4,614       4,498  
   
Africa
    26                          
   
Asia Pacific/Middle East
                                       
Australia
    389       330       338       397       450  
Malaysia
    583       519       488       511       563  
Middle East
    1,875       1,353       846       642       455  
Indonesia
    286       365       410       578       745  
Other
    29       29       32       33       45  
Total Asia Pacific/Middle East
    3,162       2,596       2,114       2,161       2,258  
   
Russia/Caspian
    110       92       77       73       73  
   
Total worldwide
    9,384       9,334       9,251       9,864       10,119  
   
 
                                       
Non-Consolidated Natural Gas Volumes Included Above
                                       
United States
    1       1       2       2       2  
Europe
    1,503       1,500       1,548       1,667       1,531  
Asia Pacific/Middle East
    1,272       1,000       807       642       455  
Russia/Caspian
    79       75       73       74       73  
   
Total worldwide
    2,855       2,576       2,430       2,385       2,061  
   
 
(1)   Net natural gas available for sale quantities are the volumes withdrawn from ExxonMobil’s natural gas reserves, excluding royalties and volumes due to others when produced, and excluding gas purchased from others, gas consumed in producing operations, field processing plant losses, volumes used for gas lift, gas injection and cycling operations, quantities flared, and volume shrinkage due to the removal of condensate or natural gas liquids fractions.
NATURAL GAS SALES(1)
                                         
(millions of cubic feet per day)   2007     2006     2005     2004     2003  
 
United States
    1,560       1,686       1,833       2,277       4,793  
Canada/South America
    968       1,120       1,186       1,353       2,022  
Europe
    5,396       5,728       6,015       6,262       6,610  
Africa
    26                          
Asia Pacific/Middle East
    2,900       2,379       1,901       1,973       2,092  
Russia/Caspian
    129       112       86       77       78  
   
Total worldwide
    10,979       11,025       11,021       11,942       15,595  
   
 
(1)   Natural gas sales include 100 percent of the sales of ExxonMobil- and majority-owned affiliates and ExxonMobil’s ownership of sales by companies owned 50 percent or less. Numbers include sales of gas purchased from third parties.

 


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62  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
NUMBER OF NET WELLS DRILLED ANNUALLY(1)
                                                                                                                         
    Productive     Dry     Total  
(net wells drilled)   2007     2006     2005     2004     2003     2007     2006     2005     2004     2003     2007     2006     2005     2004     2003  
 
Exploratory(2)
    19       21       24       21       38       16       12       13       15       28       35       33       37       36       66  
Development
    917       1,041       946       1,164       1,060       19       11       14       18       34       936       1,052       960       1,182       1,094  
Total
    936       1,062       970       1,185       1,098       35       23       27       33       62       971       1,085       997       1,218       1,160  
 
NET ACREAGE AT YEAR END(3)
                                                                                 
    Undeveloped     Developed  
(thousands of net acres)   2007     2006     2005     2004     2003     2007     2006     2005     2004     2003  
 
United States
    5,539       6,062       6,413       7,055       7,353       5,174       5,178       5,260       5,480       5,655  
Canada/South America(4)
    22,563       22,224       24,484       25,832       20,345       2,366       2,360       2,498       2,915       2,845  
Europe
    6,002       2,727       2,778       2,245       2,611       4,194       4,418       4,687       4,715       4,746  
Africa
    24,835       24,075       29,048       21,797       11,447       729       717       545       475       462  
Asia Pacific/Middle East
    13,167       7,462       3,797       4,180       8,694       1,649       1,655       1,570       2,436       3,079  
Russia/Caspian
    392       449       569       561       601       116       116       116       103       103  
Total worldwide
    72,498       62,999       67,089       61,670       51,051       14,228       14,444       14,676       16,124       16,890  
 
NET CAPITALIZED COSTS AT YEAR END(3)
                                         
(millions of dollars)   2007     2006     2005     2004     2003  
 
United States
    16,948       16,530       16,097       16,217       16,711  
Canada/South America(4)
    11,338       10,076       10,306       10,144       9,330  
Europe
    15,426       15,182       13,556       16,169       15,830  
Africa
    15,149       14,280       12,744       10,706       8,606  
Asia Pacific/Middle East
    10,674       8,813       6,718       6,675       7,094  
Russia/Caspian
    9,142       8,246       7,158       5,336       3,975  
Total worldwide
    78,677       73,127       66,579       65,247       61,546  
 
COSTS INCURRED IN PROPERTY ACQUISITION, EXPLORATION, AND DEVELOPMENT ACTIVITIES(3)
                                                         
            Canada/                     Asia Pacific/     Russia/        
(millions of dollars)   United States     South America(4)     Europe     Africa     Middle East     Caspian     Worldwide  
 
During 2007
                                                       
Property acquisition costs
    63       93             13       15       10       194  
Exploration costs
    377       231       229       584       261       80       1,762  
Development costs
    1,859       902       2,016       2,847       2,405       1,541       11,570  
Total
    2,299       1,226       2,245       3,444       2,681       1,631       13,526  
 
During 2006
                                                       
Property acquisition costs
    54       100       11       16       405       11       597  
Exploration costs
    382       225       202       518       219       139       1,685  
Development costs
    1,838       1,002       2,660       3,433       1,718       1,452       12,103  
Total
    2,274       1,327       2,873       3,967       2,342       1,602       14,385  
 
During 2005
                                                       
Property acquisition costs
    11       18             53       41       330       453  
Exploration costs
    286       134       152       507       181       160       1,420  
Development costs
    1,695       1,177       1,493       3,189       850       2,157       10,561  
Total
    1,992       1,329       1,645       3,749       1,072       2,647       12,434  
 
During 2004
                                                       
Property acquisition costs
    14       1             92       2       25       134  
Exploration costs
    233       166       143       382       141       190       1,255  
Development costs
    1,581       1,269       1,381       2,788       668       1,435       9,122  
Total
    1,828       1,436       1,524       3,262       811       1,650       10,511  
 
 
(1)   A regional breakout of this data is included on page 13 of ExxonMobil’s 2007 Form 10-K.
 
(2)   These include near-field and appraisal wells classified as exploratory for SEC reporting.
 
(3)   Includes non-consolidated interests and Canadian oil sands mining operations and is not directly comparable to data in Appendix A of ExxonMobil’s 2008 Proxy Statement, or pages 6 and 7 of ExxonMobil’s 2007 Form 10-K, which due to financial reporting requirements treat Canadian oil sands as a mining operation.
 
(4)   Canadian oil sands data included above: net acreage of 29,000 developed acres and 210,000 undeveloped acres at year-end 2007, net capitalized cost of about $3.7 billion at year-end 2007, exploration costs of $9 million, and development costs of $257 million incurred during 2007.

 


Table of Contents

EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  63
PROVED OIL AND GAS RESERVES (1)
                                         
    2007     2006     2005     2004     2003  
 
Liquids, Including Oil Sands and Non-Consolidated Reserves (millions of barrels at year end)
 
                                       
Net proved developed and undeveloped reserves
                                       
United States
    2,212       2,177       2,424       2,894       3,218  
Canada/South America(2)
    1,564       1,985       2,152       2,326       2,487  
Europe
    696       750       886       1,029       1,204  
Africa
    2,180       2,266       2,527       2,654       2,742  
Asia Pacific/Middle East
    2,976       2,765       1,908       1,688       1,383  
Russia/Caspian
    1,632       1,766       1,798       1,922       1,822  
Total worldwide excluding year-end price/cost effects
    11,260       11,709       11,695       12,513       12,856  
 
Year-end price/cost effects
    (186 )     (141 )     (466 )     (862 )      
 
Total worldwide
    11,074       11,568       11,229       11,651       12,856  
 
Proportional interest in oil sands and non-consolidated reserves included above, excluding year-end price/cost effects
United States
    374       369       391       402       426  
Canada (oil sands)(2)
    694       718       738       757       781  
Europe
    25       12       11       17       20  
Asia Pacific/Middle East
    1,420       1,399       1,353       1,161       767  
Russia/Caspian
    850       909       923       981       973  
 
                                       
Net proved developed reserves included above
                                       
United States
    1,626       1,777       2,006       2,551       2,711  
Canada/South America
    1,376       1,620       1,344       1,218       1,433  
Europe
    526       568       665       778       821  
Africa
    1,202       1,279       1,218       1,117       1,107  
Asia Pacific/Middle East
    1,797       1,720       1,189       1,045       1,105  
Russia/Caspian
    602       652       629       634       546  
 
Total worldwide
    7,129       7,616       7,051       7,343       7,723  
 
 
Natural Gas, Including Non-Consolidated Reserves (billions of cubic feet at year end)
 
                                       
Net proved developed and undeveloped reserves
                                       
United States
    13,255       10,231       11,362       10,578       11,424  
Canada/South America
    1,547       1,952       2,354       2,748       2,986  
Europe
    18,539       18,847       20,575       21,916       23,849  
Africa
    1,006       986       841       771       583  
Asia Pacific/Middle East
    32,143       31,878       26,662       19,938       13,993  
Russia/Caspian
    2,282       2,103       2,173       1,989       1,934  
Total worldwide excluding year-end price/cost effects
    68,772       65,997       63,967       57,940       54,769  
 
Year-end price/cost effects
    (510 )     1,563       2,940       2,422        
 
Total worldwide
    68,262       67,560       66,907       60,362       54,769  
 
Proportional interest in non-consolidated reserves included above, excluding year-end price/cost effects
                                       
United States
    125       131       136       140       152  
Europe
    12,189       11,867       12,340       12,873       13,703  
Asia Pacific/Middle East
    21,596       20,800       18,697       13,339       6,055  
Russia/Caspian
    1,504       1,290       1,326       1,473       1,464  
 
                                       
Net proved developed reserves included
above
                                       
United States
    8,477       9,389       10,499       9,254       9,637  
Canada/South America
    1,303       1,628       1,840       1,926       2,290  
Europe
    14,743       15,331       16,558       16,881       14,966  
Africa
    773       823       376       279       155  
Asia Pacific/Middle East
    14,272       13,788       13,343       9,018       8,473  
Russia/Caspian
    1,152       1,258       1,062       841       713  
 
Total worldwide
    40,720       42,217       43,678       38,199       36,234  
 
 
(1)   See Frequently Used Terms on pages 94 through 97.
 
(2)   Includes proven reserves from Canadian oil sands operations in Canada and, therefore, is not directly comparable to data shown in Appendix A of ExxonMobil’s 2008 Proxy Statement, which due to financial reporting requirements treat Canadian oil sands as a mining operation.

 


Table of Contents

64  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
PROVED OIL AND GAS RESERVES REPLACEMENT (1)(2)(3)Units are million barrels of oil or billion cubic feet of gas unless specified otherwise
                                                 
                                            Average  
    2007     2006     2005     2004     2003     2003-2007  
 
Liquids (millions of barrels)
                                               
Revisions
    708       57       (333 )     97       375       181  
Improved recovery
    35       27       30       22       111       45  
Extensions/discoveries
    197       246       516       595       674       445  
Purchases
          746       113       10       1       174  
Sales
    (436 )     (86 )     (227 )     (132 )     (16 )     (179 )
 
Total additions before year-end price/cost effects
    504       990       99       592       1,145       666  
Remove prior year-end price/cost effects
    141       466       862           NA     NA  
Current year-end price/cost effects
  (186 )     (141 )     (466 )     (862 )   NA     NA  
Total additions
    459       1,315       495       (270 )   NA     NA  
Production
    953       976       917       935       912       939  
 
Reserves replacement ratio, excluding sales (percent)
    99       110       36       77       127       90  
Reserves replacement ratio, including sales (percent)
    53       101       11       63       126       71  
Reserves replacement ratio, including sales and year-end price/cost effects (percent)
    48       135       54           NA     NA  
 
 
                                               
Natural Gas (billions of cubic feet)
                                               
Revisions
    6,509       1,993       4,261       256       1,462       2,896  
Improved recovery
    4       12       9       37       25       18  
Extensions/discoveries
    323       3,808       5,667       7,282       1,719       3,760  
Purchases
    9       57       53       9       10       27  
Sales
    (320 )     (104 )     (229 )     (477 )     (120 )     (250 )
 
Total additions before year-end price/cost effects
    6,525       5,766       9,761       7,107       3,096       6,451  
Remove prior year-end price/cost effects
    (1,563 )     (2,940 )     (2,422 )         NA     NA  
Current year-end price/cost effects
    (510 )     1,563       2,940       2,422     NA     NA  
Total additions
    4,452       4,389       10,279       9,529     NA     NA  
Production
    3,750       3,736       3,734       3,936       4,045       3,840  
 
Reserves replacement ratio, excluding sales (percent)
    183       157       268       193       80       175  
Reserves replacement ratio, including sales (percent)
    174       154       261       181       77       168  
Reserves replacement ratio, including sales and year-end price/cost effects (percent)
    119       117       275       242     NA     NA  
 
 
                                               
Oil-Equivalent (millions of barrels)
                                               
Revisions
    1,793       390       377       140       619       664  
Improved recovery
    35       29       31       28       116       48  
Extensions/discoveries
    251       881       1,461       1,809       961       1,072  
Purchases
    2       755       122       11       2       178  
Sales
    (490 )     (104 )     (265 )     (211 )     (36 )     (221 )
 
Total additions before year-end price/cost effects
    1,591       1,951       1,726       1,777       1,662       1,741  
Remove prior year-end price/cost effects
    (119 )     (24 )     458           NA     NA  
Current year-end price/cost effects
    (271 )     119       24       (459 )   NA     NA  
Total additions
    1,201       2,046       2,208       1,318     NA     NA  
Production
    1,578       1,598       1,539       1,591       1,587       1,579  
 
Reserves replacement ratio, excluding sales (percent)
    132       129       129       125       107       124  
Reserves replacement ratio, including sales (percent)
    101       122       112       112       105       110  
Reserves replacement ratio, including sales and year-end price/cost effects (percent)
    76       128       143       83     NA     NA  
 
2007 Reserves Changes by Region
                                                                                                                 
    Crude Oil and Natural Gas Liquids (millions of barrels)   Natural Gas (billions of cubic feet)
            Canada/                     Asia Pacific/                             Canada/                     Asia Pacific/              
    United     South                     Middle     Russia/             United     South                     Middle     Russia/        
    States     America     Europe     Africa     East     Caspian     Total     States     America     Europe     Africa     East     Caspian     Total  
 
Revisions
    165       78       95       37       399       (66 )     708       3,473     144     1,184       (22 )     1,492       238     6,509  
Improved recovery
    18       5       8       4                   35       3       1                               4  
Extensions/discoveries
    2       40       19       135       1             197       207       8       27       81                   323  
Purchases
                                              9                                     9  
Sales
    (9 )     (426 )     (1 )                       (436 )     (19 )     (231 )     (70 )                       (320 )
 
Total additions before year-end price/cost effects
    176       (303 )     121       176       400       (66 )     504       3,673       (78 )     1,141       59       1,492       238       6,525  
Remove 2006 year-end price/cost effects
    (98 )     (128 )     (11 )     177       66       135       141       (1,949 )     (32 )     (793 )           1,111       100       (1,563 )
2007 year-end price/cost effects
    13       69       3       (122 )     (38 )     (111 )     (186 )     43       13       313             (776 )     (103 )     (510 ) 
Total additions
    91       (362 )     113       231     428     (42 )     459       1,767       (97 )     661       59       1,827     235     4,452  
Production
    141     118       175       262       189       68       953       649     327       1,449     39       1,227       59     3,750  
Net change
    (50 )     (480 )     (62 )     (31 )     239       (110 )     (494 )     1,118       (424 )     (788 )     20       600       176     702  
 
Reserves replacement ratio, excluding sales (percent)
    131       104       70       67       212             99       569       47       84       151       122       403       183  
Reserves replacement ratio, including sales (percent)
    125             69       67       212             53       566             79       151       122       403       174  
Reserves replacement ratio, including sales and year-end price/cost effects (percent)
    65             65       88       226             48       272             46       151       149       398       119  
 
See footnotes on page 65.

 


Table of Contents

EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  65
PROVED OIL AND GAS RESERVES REPLACEMENT (1)(2)(3)Units are million barrels of oil or billion cubic feet of gas unless specified otherwise
                                                 
                                            Average  
    2007     2006     2005     2004     2003     2003-2007  
 
Non-U.S.
                                               
E&P costs (millions of dollars)
    11,227       12,111       10,442       8,683       9,032       10,299  
 
Oil reserves additions
    368       1,417       794       (246 )     1,063       679  
Oil production
    812       827       747       737       695       764  
 
Gas reserves additions
    2,685       5,319       8,145       7,626       2,900       5,335  
Gas production
    3,101       3,018       2,959       3,077       3,034       3,038  
 
Oil-equivalent reserves additions, excluding sales
    1,281       2,172       1,918       1,974       1,554       1,780  
Oil-equivalent reserves additions, including sales
    803       2,118       1,766       1,900       1,547       1,627  
Oil-equivalent reserves additions, including sales and price/cost effects
    815       2,303       2,151       1,025     NA     NA  
Oil-equivalent production
    1,329       1,330       1,240       1,250       1,201       1,270  
 
Reserves replacement ratio, excluding sales (percent)
    96       163       155       158       129       140  
Reserves replacement ratio, including sales (percent)
    60       159       142       152       129       128  
Reserves replacement ratio, including sales and year-end price/cost effects (percent)
    61       173       173       82     NA     NA  
Reserves replacement costs(4) (dollars per barrel)
    8.76       5.58       5.44       4.40       5.81       5.79  
 
 
                                               
United States
                                               
E&P costs (millions of dollars)
    2,299       2,274       1,992       1,828       2,050       2,089  
 
Oil reserves additions
    91       (102 )     (299 )     (24 )     82       (50 )
Oil production
    141       149       170       198       217       175  
 
Gas reserves additions
    1,767       (930 )     2,134       1,903       196       1,014  
Gas production
    649       718       775       859       1,011       802  
 
Oil-equivalent reserves additions, excluding sales
    800       (117 )     73       14       144       183  
Oil-equivalent reserves additions, including sales
    788       (167 )     (40 )     (123 )     115       114  
Oil-equivalent reserves additions, including sales and year-end price/cost effects
    386       (257 )     57       293     NA     NA  
Oil-equivalent production
    249       268       299       341       386       309  
 
Reserves replacement ratio, excluding sales (percent)
    321             24       4       37       59  
Reserves replacement ratio, including sales (percent)
    316                         30       37  
Reserves replacement ratio, including sales and year-end price/cost effects (percent)
  155             19       86     NA     NA  
Reserves replacement costs(4) (dollars per barrel)
    2.87             27.29       130.57       14.24       11.43  
 
 
                                               
Worldwide
                                               
E&P costs (millions of dollars)
    13,526       14,385       12,434       10,511       11,082       12,388  
 
Oil reserves additions
    459       1,315       495       (270 )     1,145       629  
Oil production
    953       976       917       935       912       939  
 
Gas reserves additions
    4,452       4,389       10,279       9,529       3,096       6,349  
Gas production
    3,750       3,736       3,734       3,936       4,045       3,840  
 
Oil-equivalent reserves additions, excluding sales
    2,081       2,055       1,991       1,988       1,698       1,963  
Oil-equivalent reserves additions, including sales
    1,591       1,951       1,726       1,777       1,662       1,741  
Oil-equivalent reserves additions, including sales and price/cost effects
    1,201       2,046       2,208       1,318     NA     NA  
Oil-equivalent production
    1,578       1,598       1,539       1,591       1,587       1,579  
 
Reserves replacement ratio, excluding sales (percent)
    132       129       129       125       107       124  
Reserves replacement ratio, including sales (percent)
    101       122       112       112       105       110  
Reserves replacement ratio, including sales and year-end price/cost effects (percent)
    76       128       143       83     NA     NA  
Reserves replacement costs(4)
(dollars per barrel)
    6.50       7.00       6.25       5.29       6.53       6.31  
 
 
(1)   The data shown above and on the preceding page include reserves, production, and costs from Canadian oil sands operations. This is a more complete summary of ExxonMobil’s exploration and production operations than the data in Appendix A of ExxonMobil’s 2008 Proxy Statement, which due to financial reporting requirements, treat Canadian oil sands as a mining operation.
 
(2)   See Frequently Used Terms on pages 94 through 97.
 
(3)   The term “sales” includes the impact of expropriation of proved reserves in Venezuela (462 million oil-equivalent barrels) in 2007.
 
(4)   Calculation based on exploration and production costs divided by oil-equivalent reserves additions. All values exclude the impact of asset sales; i.e., reserves sold and proceeds received; and price/cost related effects associated with using December 31 prices and costs.

 


Table of Contents

66  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
OIL AND GAS EXPLORATION AND PRODUCTION EARNINGS
The revenue, cost, and earnings data are shown both on a total dollar and unit basis, and are inclusive of non-consolidated and Canadian oil sands operations. They are not directly comparable to the data in Appendix A of ExxonMobil’s 2008 Proxy Statement, which due to financial reporting requirements, treat Canadian oil sands as a mining operation. The data displayed here provide a more complete summary of ExxonMobil’s exploration and production operations.
                                                                                           
    Total Revenues and Costs, Including Non-Consolidated Interests and Oil Sands     Revenues and Costs per Unit of Sales or Production(1)    
                                    Asia                                              
            Canada /                     Pacific /                             Canada /                
    United     South                     Middle     Russia /             United     South     Outside          
    States     America     Europe     Africa     East     Caspian     Total     States     America     Americas     Worldwide    
       
2007   (millions of dollars)
  (dollars per unit of sales)
 
Revenue
                                                                                         
Crude oil and NGL
    8,997       6,569       11,986       17,834       13,153       4,477       63,016       62.86       55.27       69.32       66.58    
Natural gas
    3,176       1,704       9,911       21       5,117       46       19,975       5.93       5.77       5.82       5.83    
           
                                                            (dollars per barrel of net oil-equivalent production)
 
Total revenue
    12,173       8,273       21,897       17,855       18,270       4,523       82,991       52.42       49.40       55.55       54.40    
Less costs:
                                                                                         
Production costs excluding taxes
    2,275       2,206       3,243       1,180       1,046       383       10,333       9.80       13.17       5.20       6.77    
Depreciation and depletion
    1,493       1,256       2,657       2,101       861       540       8,908       6.43       7.50       5.47       5.85    
Exploration expenses
    282       273       170       470       226       81       1,502       1.21       1.63       0.84       0.98    
Taxes other than income
    1,347       126       2,528       1,599       4,045       86       9,731       5.80       0.75       7.33       6.38    
Related income tax
    2,429       1,190       8,190       7,263       7,437       1,034       27,543       10.46       7.11       21.25       18.05    
       
Results of producing activities
    4,347       3,222       5,109       5,242       4,655       2,399       24,974       18.72       19.24       15.46       16.37    
Other earnings(2)
    609       (504 )     944       277       (48 )     34       1,312       2.62       (3.01 )     1.07       0.86    
       
Total earnings, excluding power and coal
    4,956       2,718       6,053       5,519       4,607       2,433       26,286       21.34       16.23       16.53       17.23    
Power and coal
    (86 )                       297             211                                    
                                   
Total earnings
    4,870       2,718       6,053       5,519       4,904       2,433       26,497                                    
                                   
 
                                                                                         
2006   (millions of dollars)
  (dollars per unit of sales)
 
Revenue
                                                                                         
Crude oil and NGL
    8,417       6,405       11,069       17,253       11,027       2,569       56,740       55.63       50.42       60.90       58.70    
Natural gas
    3,689       1,984       11,333             4,225       38       21,269       6.22       5.81       6.31       6.24    
           
                                                            (dollars per barrel of net oil-equivalent production)
 
Total revenue
    12,106       8,389       22,402       17,253       15,252       2,607       78,009       48.41       45.07       51.80       50.44    
Less costs:
                                                                                         
Production costs excluding taxes
    2,367       2,075       2,669       965       892       233       9,201       9.46       11.15       4.29       5.95    
Depreciation and depletion
    1,264       1,123       2,354       2,096       747       373       7,957       5.06       6.03       5.02       5.14    
Exploration expenses
    247       172       169       330       157       116       1,191       0.99       0.92       0.70       0.77    
Taxes other than income
    833       146       2,885       1,612       5,048       66       10,590       3.33       0.79       8.66       6.85    
Related income tax
    2,711       1,258       8,667       6,878       4,687       596       24,797       10.84       6.76       18.76       16.03    
       
Results of producing activities
    4,684       3,615       5,658       5,372       3,721       1,223       24,273       18.73       19.42       14.39       15.70    
Other earnings(2)
    503       112       891       122       39       3       1,670       2.01       0.60       0.95       1.08    
       
Total earnings, excluding power and coal
    5,187       3,727       6,549       5,494       3,760       1,226       25,943       20.74       20.02       15.34       16.78    
Power and coal
    (19 )                       306             287                                    
                                   
Total earnings
    5,168       3,727       6,549       5,494       4,066       1,226       26,230                                    
       
 
(1)   The per unit data is divided into two sections: (a) revenue per unit of sales from ExxonMobil’s own production; and, (b) operating costs and earnings per unit of net oil-equivalent production. Units for crude oil and natural gas liquids (NGL) are barrels, while units for natural gas are thousands of cubic feet. The volumes of crude oil and natural gas liquids production and net natural gas production available for sale used in this calculation are shown on pages 60 and 61. The volumes of natural gas were converted to oil-equivalent barrels based on a conversion factor of 6 thousand cubic feet per barrel.
 
(2)   Includes earnings related to transportation operations, LNG liquefaction and transportation operations, sale of third-party purchases, technical services agreements, other nonoperating activities, and adjustments for minority interests.

 


Table of Contents

EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  67
Oil and Gas Exploration and Production Earnings (continued)
                                                                                           
    Total Revenues and Costs, Including Non-Consolidated Interests and Oil Sands     Revenues and Costs per Unit of Sales or Production(1)    
                                    Asia                                              
            Canada /                     Pacific /                             Canada /                
    United     South                     Middle     Russia /             United     South     Outside          
    States     America     Europe     Africa     East     Caspian     Total     States     America     Americas     Worldwide    
       
2005   (millions of dollars)
  (dollars per unit of sales)
 
Revenue
                                                                                         
Crude oil and NGL
    8,081       5,907       9,841       12,333       6,396       1,819       44,377       46.29       41.34       51.00       48.59    
Natural gas
    4,633       2,530       9,095             3,165       21       19,444       7.30       6.90       5.17       5.76    
           
                                                            (dollars per barrel of net oil-equivalent production)
 
Total revenue
    12,714       8,437       18,936       12,333       9,561       1,840       63,821       45.41       41.08       42.74       43.02    
Less costs:
                                                                                         
Production costs excluding taxes
    1,786       1,887       2,461       840       624       209       7,807       6.38       9.19       4.14       5.26    
Depreciation and depletion
    1,291       1,095       2,362       1,319       716       199       6,982       4.61       5.33       4.60       4.71    
Exploration expenses
    158       150       77       310       122       164       981       0.56       0.73       0.67       0.66    
Taxes other than income
    761       64       2,113       1,158       2,501       57       6,654       2.72       0.31       5.84       4.49    
Related income tax
    3,138       1,815       7,130       5,143       2,596       411       20,233       11.21       8.84       15.31       13.64    
       
Results of producing activities
    5,580       3,426       4,793       3,563       3,002       800       21,164       19.93       16.68       12.18       14.26    
Other earnings(2)
    633       (131 )     2,101       166       6       109       2,884       2.26       (0.64 )     2.39       1.95    
       
Total earnings, excluding power and coal
    6,213       3,295       6,894       3,729       3,008       909       24,048       22.19       16.04       14.57       16.21    
Power and coal
    (13 )                       314             301                                    
                                   
Total earnings
    6,200       3,295       6,894       3,729       3,322       909       24,349                                    
                                   
 
                                                                                         
2004   (millions of dollars)
  (dollars per unit of sales)
 
Revenue
                                                                                         
Crude oil and NGL
    7,119       4,610       7,647       7,301       5,071       1,061       32,809       34.92       31.33       35.76       34.88    
Natural gas
    3,943       1,900       7,642             2,629       18       16,132       5.53       4.86       4.10       4.47    
           
                                                            (dollars per barrel of net oil-equivalent production)  
Total revenue
    11,062       6,510       15,289       7,301       7,700       1,079       48,941       34.28       30.33       31.20       31.72    
Less costs:
                                                                                         
Production costs excluding taxes
    1,787       1,526       2,209       719       695       180       7,116       5.54       7.11       3.78       4.61    
Depreciation and depletion
    1,454       1,080       2,296       839       740       98       6,507       4.50       5.03       3.95       4.22    
Exploration expenses
    202       180       137       321       104       189       1,133       0.63       0.84       0.75       0.73    
Taxes other than income
    571       55       1,747       722       1,702       42       4,839       1.77       0.25       4.19       3.14    
Related income tax
    2,546       1,244       4,971       2,789       1,949       201       13,700       7.89       5.80       9.86       8.88    
       
Results of producing activities
    4,502       2,425       3,929       1,911       2,510       369       15,646       13.95       11.30       8.67       10.14    
Other earnings(2)
    458       (320 )     459       201       (85 )     13       726       1.42       (1.49 )     0.58       0.47    
       
Total earnings, excluding power and coal
    4,960       2,105       4,388       2,112       2,425       382       16,372       15.37       9.81       9.26       10.61    
Power and coal
    (12 )                       315             303                                    
                                   
Total earnings
    4,948       2,105       4,388       2,112       2,740       382       16,675                                    
                                   
 
                                                                                         
2003   (millions of dollars)
  (dollars per unit of sales)
 
Revenue
                                                                                         
Crude oil and NGL
    5,785       3,633       5,683       4,499       4,014       755       24,369       26.00       24.34       27.67       26.72    
Natural gas
    4,152       1,625       6,720             2,342       16       14,855       5.07       4.27       3.64       4.02    
           
                                                            (dollars per barrel of net oil-equivalent production)  
Total revenue
    9,937       5,258       12,403       4,499       6,356       771       39,224       27.67       24.66       24.99       25.57    
Less costs:
                                                                                         
Production costs excluding taxes
    1,780       1,451       1,951       564       640       150       6,536       4.96       6.81       3.44       4.26    
Depreciation and depletion
    1,574       883       1,997       459       797       92       5,802       4.37       4.14       3.48       3.78    
Exploration expenses
    257       146       166       217       152       95       1,033       0.72       0.69       0.65       0.67    
Taxes other than income
    554       45       1,594       528       1,154       41       3,916       1.54       0.21       3.45       2.55    
Related income tax
    2,017       847       3,420       1,496       1,664       138       9,582       5.62       3.97       6.99       6.25    
       
Results of producing activities
    3,755       1,886       3,275       1,235       1,949       255       12,355       10.46       8.84       6.98       8.06    
Other earnings(2)
    149       (252 )     1,977       14       (62 )     9       1,835       0.41       (1.18 )     2.02       1.19    
       
Total earnings, excluding power and coal
    3,904       1,634       5,252       1,249       1,887       264       14,190       10.87       7.66       9.00       9.25    
Power and coal
    1                         311             312                                    
                                   
Total earnings
    3,905       1,634       5,252       1,249       2,198       264       14,502                                    
                                   
See footnotes on page 66.

 


Table of Contents

(GRAPHIC)
ExxonMobil has a large refining presence in Europe, including this high-conversion refinery in Rotterdam, the Netherlands, which is part of an integrated refining and chemical complex.
                                         
DOWNSTREAM STATISTICAL RECAP   2007     2006     2005     2004     2003  
 
Earnings (millions of dollars)
    9,573       8,454       7,992       5,706       3,516  
Refinery throughput (thousands of barrels per day)
    5,571       5,603       5,723       5,713       5,510  
Petroleum product sales(1) (thousands of barrels per day)
    7,099       7,247       7,519       7,511       7,270  
Average capital employed(2) (millions of dollars)
    25,314       23,628       24,680       27,173       26,965  
Return on average capital employed(2) (percent)
    37.8       35.8       32.4       21.0       13.0  
Capital expenditures (millions of dollars)
    3,303       2,729       2,495       2,405       2,781  
 
(1)   Petroleum product sales data are reported net of purchases/sales contracts with the same counterparty.
 
(2)   See Frequently Used Terms on pages 94 through 97.

 


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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  69
Refining & Supply, Fuels Marketing, and Lubricants & Specialties
DOWNSTREAM STRATEGIES
ExxonMobil’s Downstream is a large, diversified, and profitable business, with marketing presence and refining complexes around the world. Fundamental Downstream business strategies position the company to deliver long-term growth in shareholder value that is superior to competition regardless of market conditions:
§   Maintain best-in-class operations, in all respects
§   Provide quality, valued products and services to our customers
§   Lead industry in efficiency and effectiveness
§   Capitalize on integration with other ExxonMobil businesses
§   Selectively invest for resilient, advantaged returns
§   Maximize value from leading-edge technology
Execution of these strategies combined with overall operations excellence continues to deliver superior results, such as return on average capital employed. Our financial objectives in the Downstream can be summarized into three broad areas — margin enhancement, cost efficiency, and capital discipline.
(GRAPH)
 
(1)   Royal Dutch Shell, BP, and Chevron values are estimated on a consistent basis with ExxonMobil, based on public information.
2007 Results and Highlights
Continued leadership in safety, reliability, efficiency, scale, and technology contributed to our best-ever financial performance and superior operating results.
Earnings were a record $9.6 billion, up 13 percent from 2006.
More than $2 billion of pretax operating cost efficiencies and margin enhancements were achieved. We have delivered an average of $2 billion in pretax improvements per year since 2003 through improvements derived from our scale, integration, collaboration via our global functional organization, and industry-leading proprietary technology.
Downstream capital expenditures were $3.3 billion in 2007, up more than 20 percent versus 2006, reflecting new investments in China and additional environmental expenditures.
Return on average capital employed was 38 percent, up from 36 percent in 2006.
Refinery throughput was 5.6 million barrels per day, in line with 2006 as volume growth was offset
by divestments.
Petroleum product sales continued to be strong at 7.1 million barrels per day.
DOWNSTREAM COMPETITIVE ADVANTAGES
Portfolio Quality We are the world’s largest global refiner, manufacturer of lube basestocks, and supplier/marketer of petroleum products. Our large, world-class facilities are located in major markets around the world.
Global Integration Over 75 percent of our refining capacity is integrated with our lubes and/or chemical businesses. Our global functional organization delivers efficient development and deployment of best practices and new technology.
Discipline and Consistency Systematic processes and corresponding efficient execution have established us as an industry leader in operations excellence and cost effectiveness.
Value Maximization Proprietary Molecule Management technology allows us to optimize raw materials, maximize premium products, and highgrade product placement.
Long-Term Perspective We maintain a disciplined capital approach focused on profitable and resilient investments that build on our advantages.

 


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70  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
Refining & Supply
ExxonMobil Refining & Supply encompasses a global network of reliable and efficient manufacturing plants, transportation systems, and distribution centers that provide a range of fuels, lubricants, and other high-value products and feedstocks to our customers around the world. Our global supply organization optimizes our network — the supply of raw materials to our refineries, products supplied to our customers, and placement of equity crude production. Our proven business model is founded on continuous operations improvement, leveraging our global scale and integration to improve margins and deliver cost efficiencies, and a disciplined capital investment program to meet growing demand for high-quality products through selective investments that yield a competitive advantage.
Largest Global Refiner
     
Refinery Interests
  38
Distillation Capacity (barrels per day)
  6.3 million
Lube Basestock Capacity (barrels per day)
  142 thousand
Crude Oil and Product Tanker Interests (>1kDWT)
  18
Major Petroleum Products Terminals  
  230
PURSUING OPERATIONS EXCELLENCE
Our goal is flawless operations. Safety — both personnel and operations safety — remains a top priority. We strive to achieve an incident-free workplace where Nobody Gets Hurt. Our Operations Integrity Management System (OIMS) framework establishes common worldwide expectations for mitigating operating risks that are inherent in our business. To meet these expectations, we continue to focus on underlying behaviors — reinforcing personal accountability, identifying and reducing risks, and ensuring compliance to our standards — while enhancing our facilities, systems, and competencies.
We also strive to improve all aspects of our operations, including reliability, security, environmental performance, and business controls. We rely on the commitment of our people, global management systems, extensive technical networks, and business planning processes to continually improve performance. Our processes and efficient execution have established ExxonMobil as an industry leader in operations excellence.
(PICTURE)
Safety of our personnel and operations continues to be a top priority for ExxonMobil. Close monitoring of facilities and operations by ExxonMobil engineers and technicians is critical to stable operations.
(BAR CHART)
 
(1)   Royal Dutch Shell and BP values calculated on a consistent basis with ExxonMobil, based on public information.
 
(2)   Conversion capacity includes catalytic cracking, hydrocracking, and coking.
(BAR CHART)
 
(1)   Royal Dutch Shell, BP, and Industry values calculated on a consistent basis with ExxonMobil, based on public information.

 


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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  71
LEVERAGING GLOBAL SCALE AND INTEGRATION
ExxonMobil is the world’s largest global refining company, with the most distillation, conversion, and lube basestock production capacity. We have a strong presence in mature markets around the world as well as a significant presence in the high-growth Asia Pacific region. On average, our refineries are over 60 percent larger and are more integrated with chemical and lubes operations than the industry average. This scale and integration provide us greater flexibility to optimize operations and to produce higher-value products with lower feedstock and operating costs. We use an integrated approach when developing new business opportunities, such as our refining, petrochemicals, and fuels marketing venture in Fujian, China, and when supporting Upstream ventures, such as Syncrude in Canada.
Combined with our scale and integration, our global functional organization, established networks, and research programs ensure rapid and efficient development and deployment of best practices and technology. We use Integrated Business Teams, which combine refining, logistics, and marketing expertise, to optimize specific businesses and capture maximum shareholder value.
These structural advantages are difficult for competitors to duplicate. We continue to leverage these advantages to generate more than $1 billion pretax each year in refining “self-help” margin improvements and operating efficiencies, which underpin our leading financial performance.
(PICTURE)
A new furnace stack is installed at ExxonMobil’s refinery in Baytown, Texas, part of a project to increase capacity at a fraction of grassroots cost.
New Technology for Plant Operators
We continue to deploy state-of-the-art process control technology and tools at our refineries. Over a 10-year period we will invest over $700 million in this area to enhance operations safety and reliability, and increase margins. Not only are we installing the best process control systems, we are also implementing our Plant Automation Venture, which focuses on improving operator effectiveness. Nearly 600 Plant Automation project elements will be implemented over the next several years.
ENHANCING CONSOLE OPERATIONS
Advanced technologies for console operators manage and automate selected procedures, providing consistency and speed of execution. They also effectively and efficiently analyze, manage, and steward operational performance. New real-time advisory tools and event detection systems, which use ExxonMobil proprietary technology, provide operators early alerts of process deviations and provide expert guidance to quickly return to normal operations.
IMPROVED FIELD PERFORMANCE
We also provide our field operators with state-of-the-art technology, such as mobile computers which guide them through a more disciplined and consistent set of equipment checks. With these tools, equipment repair costs are lowered, energy efficiency improves, and workforce productivity increases. This technology has been implemented at 17 of our manufacturing plants, with rollout to the remaining sites planned by year-end 2009.
(PICTURE)
New state-of-the-art process control technology enhances operations safety and reliability, and increases margins.
INCREASING MARGIN
We improve margin by focusing on three key areas: economically growing production, reducing raw material costs, and improving yields of high-value products.

 


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72  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
Production Growth We strive to increase production by maximizing the utilization of our existing refining capacity. We focus on improving operations safety and reliability, eliminating constraints, optimizing planned maintenance and intervals between downtimes, and expanding market outlets. These improvements are driven by the disciplined application of our global management systems including our proprietary Global Reliability System and Molecule Management technology.
We also economically increase the capacity of our refineries through low-cost debottlenecks that are resilient even in low-margin environments. For example, we are expanding the capacity of our plant in Baytown, Texas, the largest refinery in the United States. Since 1995, we have effectively added the equivalent capacity of a new industry-average-size refinery to our portfolio every three years, at a fraction of grassroots cost.
Raw Materials We continue to find new, innovative methods to reduce raw material costs. For example, we have expanded the application of advanced molecular fingerprinting and modeling technologies that improve our understanding of the behavior and characteristics of materials moving through our refineries. This technology enables us to more precisely select and blend crudes with properties that will maximize margins through our operating facilities.
ExxonMobil is an industry leader in utilizing challenged crudes that are typically discounted in the marketplace because they have properties that make them difficult to process. Since 2003, we have increased our processing of acidic, high nitrogen content, and other challenged crudes by 48 percent.
Product Yield In addition to improving raw material selection, our Molecule Management technology also enables us to optimize the yields and blending of high-value products on a real-time basis. The approach is built on ExxonMobil’s proprietary technology and petroleum knowledge base, enabled by years of worldwide experience. Overall, our Molecule Management technology is currently delivering approximately $850 million per year in pretax benefits. We are in the process of extending optimization technologies into our transportation systems.
(BAR CHART)
(PICTURE)
A new 125-megawatt cogeneration facility at ExxonMobil’s Antwerp, Belgium, refinery is planned to start up in 2008, increasing energy efficiency of the plant.
IMPROVING OPERATING EFFICIENCY
Worldwide cash operating costs at our refineries are substantially below the industry average, as confirmed by external benchmarking. Our worldwide company average unit cash operating costs have been within the first quartile of individual refineries since 2004. We have continued to widen our operating expense advantage.
We achieve industry-leading unit cost performance by leveraging our scale and integration as well as our leading-edge technology to capture efficiencies. We have been successful in developing energy and cost efficiencies that offset much of the inflationary pressures and expenses related to operating facility improvements, new process units, and production growth.
Energy Initiatives Improved energy efficiency is a key contributor to our cost performance and we continue to outpace industry in this area. ExxonMobil’s proprietary Global Energy Management System (GEMS) focuses on opportunities that reduce the energy consumed at our refineries and chemical plants. Over $1.5 billion of annual pretax savings have been identified since 2000, equal to 15 to 20 percent of the energy consumed at our refining and chemical facilities. As of year-end 2007, we have captured nearly 60 percent of these savings.

 


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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  73
ExxonMobil continues to make significant investments in cogeneration facilities with several start-ups planned over the next few years. Cogeneration requires substantially less energy than separate conventional steam and power generation. While improving efficiency, our GEMS improvements and cogeneration of electricity also reduce greenhouse gas emissions.
Cost Efficiencies In addition to energy efficiency improvement, we reduce costs through economies of scale. We use common support organizations at our integrated sites and our global training initiative improves overall workforce productivity.
Our global procurement organization also increases our competitive advantage. By utilizing our purchasing scale, market intelligence, and global best practices, our manufacturing sites are supplied with materials and services at costs lower than industry.
MAINTAINING CAPITAL DISCIPLINE
Refining & Supply capital expenditures are focused on selective and resilient investments that yield competitive advantage. These investments meet product quality requirements, reduce environmental impact, further upgrade safety systems, lower operating costs, and produce higher-value products and chemical feedstocks using lower-cost raw materials. We also implement projects that enhance refinery capacity and yield at much less than grassroots cost, generating an attractive return, even at bottom-of-cycle market conditions.
In 2007 we completed construction and successfully started up several projects that produce lower-sulfur motor fuels, including gasoline projects in Japan and diesel projects in North America and Europe, with additional start-ups planned for 2008. Our 2007 investments included new facilities to reduce diesel sulfur at our refinery in Baton Rouge, Louisiana.
(PICTURE)
New facilities to reduce diesel sulfur were installed at our refinery in Baton Rouge, Louisiana, in 2007.
ExxonMobil’s proprietary SCANfining technology, which was most recently applied at our refinery in Wakayama, Japan, provides a competitive edge by producing lower-sulfur gasoline with less octane loss and a minimum of new investment.
ExxonMobil’s proprietary Capital Project System, EMCAPS, continues to provide industry-leading performance in project development and execution. Over the last five years, our project cost effectiveness averaged 5 to 10 percent better than the refining industry, as confirmed by external benchmarking.
(GRAPH)
 
(1)   Solomon data available for even years only.
 
(2)   Only even-year data plotted for 2002-2006.
(GRAPH)

 


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74  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
Fuels Marketing
ExxonMobil Fuels Marketing creates long-term value by selling high-quality products and services daily to millions of customers across the globe. Our respected Exxon, Esso, Mobil, and On the Run brands serve customers “on the move” at more than 32,000 retail service stations. ExxonMobil’s fuel products and services are also provided through our three business-to-business segments — Industrial and Wholesale, Aviation, and Marine — to nearly 1 million customers worldwide.
Fuels Marketing provides a secure and ratable outlet for our refineries and continues to be well-positioned to successfully compete in a dynamic and competitive marketplace. We focus on key business fundamentals: superior safety and environmental performance, self-help improvements from global scale and integration, disciplined portfolio restructuring and capital management, and customer focused marketing initiatives.
Diverse Customer Base Provides Global Outlet
         
Service Stations
    32,000
Industrial and Wholesale Customers
  1 million
Aviation Operations
  630 airports
Marine Operations
  180 ports
INTEGRATION AND OPERATING EFFICIENCIES
We continue to leverage integration with our refining business across the four Fuels Marketing business lines. Downstream cross-functional teams focus on optimizing product placement across the broad spectrum of customer segments to capture the highest value for our refined molecules. Highgrading sales to higher-value channels increased fuels margins by more than $100 million in 2007.
Self-help improvements continue to reduce operating expenses through the global application of innovative technologies, centralization of support activities, and automation of work processes. The combined impact of our efficiency initiatives offset inflation and reduced operating expenses by over $150 million in 2007 and 5 percent since 2003. Similarly, productivity improvements have enabled a workforce reduction of 25 percent over the past four years.
(GRAPH)
DISCIPLINED CAPITAL MANAGEMENT
The Fuels Marketing capital management strategy combines selective investments and disciplined asset highgrading to optimize the profitability of our business. Investments are prioritized through a rigorous, disciplined, and globally consistent market-planning process using sophisticated tools and demographic models.
(PICTURE)
Customers find convenience, quality, and value at our popular On the Run stores.
(PICTURE)
ExxonMobil Aviation supplies aviation fuel at approximately 630 airports worldwide.

 


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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  75
(GRAPHIC)
(GRAPHIC)
Our investment decisions are complemented by equally selective divestments that highgrade our asset base and optimize overall financial returns. In addition, our portfolio restructuring activities have further enhanced integration with our refining assets. This disciplined and consistent approach has improved our capital efficiency by over 45 percent since 2003.
NONFUELS MARGIN GROWTH
Further increasing nonfuels margin continues to be one of our key priorities to optimize retail site profitability. Drawing on our worldwide retailing experience and extensive consumer and market research, Fuels Marketing offers innovative market-specific retail formats and products to fully meet our customers’ needs and expectations by delivering convenience, quality, and value.
In certain markets, we use strategic alliances with leading food and grocery marketers to complement our fuels brand and to enhance the convenience store offering by leveraging the strength of our partners’ brand value, expertise, and distribution network. Examples include our alliances with Tesco in the United Kingdom and Thailand, Doutor and 7-Eleven in Japan, NTUC Fairprice in Singapore, and Tim Hortons in Canada.
Nonfuels margin growth from convenience products, car washes, alliances, rents, and card payment programs has increased site productivity nearly 30 percent since 2003, increasing the resiliency of our retail business and improving returns.
(GRAPHIC)
ExxonMobil’s network of more than 32,000 service stations, like this site in Charlotte, North Carolina, provides high-quality products and services to customers “on the move.”

 


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76  EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW
Lubricants & Specialties
ExxonMobil is the world’s No. 1 supplier of lube basestocks and a leading marketer of finished lubricants, asphalt, and specialty products. Our three global brands, Mobil, Exxon, and Esso, identify ExxonMobil products that are sold around the world. At the forefront of these brands is Mobil 1, the world’s leading synthetic motor oil. Major original equipment manufacturers trust us to deliver technically superior products that protect their customers’ engines and industrial equipment, enabling peak performance. Our dedicated global organization and strong distributor network focus on the reliable supply of high-quality lubricants and providing technical application expertise to customers around the globe.
Global Lubricants Leadership Position
         
Lube Basestock Refineries
  12    
Average Capacity Per Lube Refinery
  2 times industry    
Blend Plants
  37    
Lube Basestock Market Share
  18 percent    
Finished Lubricant Market Share
  12 percent    
We produce high-quality basestocks through interests in 12 lube refineries, supplying volumes twice as large as our next competitor. Our finished lubricants are manufactured through a network of over 35 blend plants.
TECHNOLOGY LEADERSHIP
ExxonMobil’s Mobil, Exxon, and Esso lubricants continue to meet customer needs for automotive, industrial, commercial transportation, aviation, and marine applications around the world. Customers rely on our products because of their quality, reliability, technology leadership, close association with leading original equipment manufacturers, and their demonstrated ability to withstand the severest performance tests, including those of motorsports racing such as NASCAR, American Le Mans, Porsche SuperCup, and Formula 1. Additionally, our products are backed by a variety of technical services designed to provide customers with worry-free operations.
We continue to introduce new and innovative high-quality products, building on our reputation as a technology leader. We have expanded our U.S. Mobil 1 product offering with two advanced fuel economy products, providing consumers with the benefits of outstanding engine protection and improved gasoline mileage. In China and Russia, two of our key growth markets, our passenger vehicle product lines have been enhanced to meet the diverse needs of the expanding consumer base. In Russia, this includes a new Mobil 1 10W60 product specifically designed to meet the needs of older vehicles.
(GRAPHIC)
Mobil 1 Advanced Fuel Economy meets the needs of fuel efficiency conscious consumers.
STRATEGIC GLOBAL ALLIANCES
Globally respected brands and industry-leading technology enable ExxonMobil to build enduring and successful strategic global alliances with automotive and industrial equipment manufacturers. We enjoy strong relationships with global partners such as Toyota, Caterpillar, Chrysler, General Motors, Peugeot, and Porsche, where we collaborate on developing innovative new lubricants. This approach leads to long-standing technology partnerships, such as our 10-year relationship with Porsche. Porsche recommends Mobil 1 motor oil exclusively, and every new Porsche automobile rolls off the assembly line filled with Mobil 1 motor oil. Motorsports sponsorships, like those in Formula 1 with the McLaren Mercedes team, and NASCAR and IRL with Penske Racing, provide ideal environments for developing and demonstrating our high-performance lubricants. Race-proven Mobil 1, the Official Motor Oil of NASCAR, is used by more than 60 percent of the teams in the top three NASCAR circuits.
(GRAPHIC)
Over 60 percent of the teams in the top three NASCAR circuits use Mobil 1 oil, the Official Motor Oil of NASCAR.

 


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EXXON MOBIL CORPORATION § 2007 FINANCIAL & OPERATING REVIEW  77
(GRAPHIC)
ExxonMobil and Porsche celebrated 10 years of partnership. Porsche recommends Mobil 1 motor oil exclusively and every new Porsche automobile rolls off the assembly line filled with Mobil 1 oil.
WORLD-CLASS BRANDS
ExxonMobil continues to grow its presence in the premium segments of the finished lubes business.
Mobil 1, our flagship engine oil, is recommended for more than 50 percent of new luxury vehicles sold in the North American market. No other motor oil holds as many engine specification approvals. The growing list of automotive manufacturers recommending Mobil 1 oil for their high-performance vehicles includes the makers of Aston Martin, Bentley, Cadillac, Chrysler, Corvette, Dodge, Mercedes Benz, Porsche, Saab, Acura, and Nissan. Mobil 1 oil enjoys more manufacturer recommendations than any other oil brand.
We are also leaders in the industrial lubricants sector, where we market the Mobil Industrial Lubricants brand. Our primary focus is on delivering solutions to lubrication challenges, which help improve our customers’ productivity.
In 2007 we introduced Pegasus 1005 oil, formulated to extend the life and improve the productivity of natural gas engines through excellent wear protection, reduced deposits, long oil life, and superb catalyst compatibility. Our Mobilgear SHC XMP series of gear oils is the benchmark in the wind power sector offering outstanding all-around performance, and is used by several leading wind turbine manufacturers globally.
We also closely monitor our customers’ satisfaction levels. Our 2007 survey results show that we continue to exceed business-to-business industry benchmarks for customer loyalty and satisfaction.
GROWTH IN PROFITABLE EMERGING MARKETS
As economies around the world develop and industrialize, they bring increased demand for high-quality industrial and automotive lubricants. Our strong global brands, proprietary technology, and low-cost, efficient, and reliable supply chain capability enable us to take advantage of these growth opportuniti