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The Lamp - ExxonMobil

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An <strong>ExxonMobil</strong> publication<br />

<strong>The</strong> <strong>Lamp</strong><br />

at 90 years<br />

Everyday products make big difference<br />

Papua New Guinea LNG<br />

project plans move ahead<br />

PLUS<br />

African startups<br />

Summer science camps<br />

<strong>ExxonMobil</strong> MasterCard<br />

Viewpoint:<br />

OFC<br />

Tapping a powerful resource<br />

2008 – Number 3


Viewpoint<br />

1<br />

Tapping a powerful resource<br />

Now more than ever, it is<br />

important for Americans to<br />

use energy efficiently.<br />

Energy efficiency does not<br />

mean doing less; it means<br />

using energy more wisely<br />

and taking advantage of<br />

energy-saving technologies.<br />

All Americans have a role in<br />

improving energy efficiency<br />

Indexed<br />

105<br />

100<br />

Refining Energy Intensity<br />

Source: Solomon<br />

*2007 Estimated – Solomon survey<br />

only prepared in even years<br />

At <strong>ExxonMobil</strong>, we have systematically<br />

worked to improve efficiency at our facilities here<br />

in the United States and around the world.<br />

Many may not realize, but it takes a lot of<br />

energy to produce the world’s energy. So if<br />

<strong>ExxonMobil</strong> can find ways to reduce our energy<br />

costs, it can benefit our customers and our shareholders.<br />

It also benefits the environment; lowering<br />

energy usage reduces greenhouse-gas emissions.<br />

Last year, <strong>ExxonMobil</strong> achieved its best-ever<br />

energy-efficiency performance in our refining and<br />

chemicals businesses.<br />

Since 2004, we have invested more than<br />

$1.5 billion in activities that improve energy efficiency<br />

and reduce greenhouse-gas emissions.<br />

<strong>ExxonMobil</strong> is on track to improve energy<br />

efficiency in our refining and chemicals operations<br />

by at least 10 percent between 2002 and 2012.<br />

Over the past few years, we have improved the<br />

energy efficiency of these businesses at a rate two<br />

to three times faster than the industry average.<br />

95<br />

90<br />

'02<br />

'04<br />

'06<br />

Industry<br />

<strong>ExxonMobil</strong><br />

'07*<br />

Our industry leadership in<br />

the application of cogeneration<br />

technologies accounts for much of<br />

this success. With cogeneration,<br />

we can capture heat that would<br />

otherwise be lost when power is<br />

generated, and then reuse that<br />

heat for manufacturing and pro-<br />

duction. <strong>ExxonMobil</strong> has interests in about 100<br />

cogeneration facilities in more than 30 locations<br />

worldwide, with a combined power generation<br />

capacity of 4.5 gigawatts last year.<br />

Through efficiency actions taken in 2006<br />

and 2007, we reduced greenhouse-gas emissions<br />

by about 5 million metric tons in 2007,<br />

equivalent to removing about one million cars<br />

from roads in the United States. All Americans<br />

have a stake in finding ways to meet growing<br />

energy demands and reduce high prices. And<br />

each of us has a role.<br />

To help power the U.S. economy forward,<br />

<strong>ExxonMobil</strong> is tapping new resources, including<br />

energy efficiency. In the next few years, we<br />

plan on spending at least $500 million on additional<br />

initiatives to improve energy efficiency and<br />

reduce greenhouse-gas emissions. In our next<br />

installment in this series, we will suggest ways<br />

American consumers can become more energy<br />

efficient also.


Rex W. Tillerson<br />

Chairman and CEO<br />

Mark W. Albers<br />

Senior Vice President<br />

Michael J. Dolan<br />

Senior Vice President<br />

Donald D. Humphreys<br />

Senior Vice President<br />

Kenneth P. Cohen<br />

Vice President-Public Affairs<br />

David S. Rosenthal<br />

Vice President-Investor Relations and Secretary<br />

Bob Davis<br />

Editor<br />

Patrick Gabriel<br />

GCG<br />

Art Director<br />

Len Shelton<br />

Photography Coordinator<br />

Cynthia Solomon<br />

Production Coordinator<br />

Frances Bruscino<br />

Distribution Coordinator<br />

Please address all <strong>Lamp</strong> correspondence,<br />

including requests to reproduce any portion<br />

of the magazine, to the editor at Exxon Mobil<br />

Corporation, 5959 Las Colinas Blvd., Irving,<br />

TX 75039-2298.<br />

In this issue<br />

5 17 7<br />

1<br />

Viewpoint<br />

Tapping a powerful resource<br />

3<br />

Safer and sounder<br />

Innovations in marine seismic surveys<br />

5<br />

Papua New Guinea project<br />

Gas agreement is signed<br />

7<br />

Career inspiration<br />

from a crawl space<br />

Senior Vice President Mike Dolan<br />

discusses issues affecting consumers<br />

Upfront<br />

Last year, Exxon Mobil Corporation<br />

commemorated its 125-year<br />

anniversary. 2008 brings another<br />

milestone: 90 years of continuous<br />

publication of <strong>The</strong> <strong>Lamp</strong>. Our<br />

cover story on page 11 describes<br />

the genesis of this venerable<br />

magazine, and how the news<br />

and achievements of <strong>ExxonMobil</strong><br />

are reaching more than 1 million<br />

shareholders and other readers<br />

every quarter.<br />

Our company’s success is indisputably<br />

due to the quality of our<br />

employees, our steadfast objective<br />

to provide reliable energy for a<br />

changing world and our commitment<br />

to technological innovation.<br />

This focus on technology – from<br />

breakthroughs in exploration, drilling,<br />

project development and pro-<br />

11<br />

<strong>The</strong> <strong>Lamp</strong>’s 90th year<br />

Enduring publication has wide appeal<br />

13<br />

West Africa update<br />

More new energy from<br />

Nigeria and Angola<br />

17<br />

Camps for kids<br />

Unique approach to math<br />

and science education<br />

19<br />

Taking a different track<br />

Meet Edward E. Whitacre Jr.,<br />

<strong>ExxonMobil</strong>’s newest director<br />

21<br />

Bringing new gas<br />

resources to market<br />

Innovative technology<br />

could tap new supplies<br />

24<br />

Helping protect<br />

tomorrow, today<br />

Sustainable products span<br />

roadways and supermarkets<br />

90 years of <strong>The</strong> <strong>Lamp</strong><br />

<strong>The</strong> magazine begun by<br />

Standard Oil (New Jersey)<br />

President Walter Teagle in 1918<br />

has conveyed the news of the<br />

corporation for nine decades.<br />

Cover photo by Doug Mangold<br />

duction activities, improvements<br />

in refining and chemical plant<br />

processes, to the manufacturing<br />

of more fuel-efficient and environmentally<br />

beneficial products – can<br />

be found throughout <strong>ExxonMobil</strong>.<br />

Several articles in this issue illustrate<br />

this dedicated drive.<br />

For example, technology is<br />

improving the way seismic surveys<br />

are conducted at sea, benefiting<br />

the environment. “Safer<br />

and sounder” on page 3 tells<br />

how it’s being done.<br />

Another technology breakthrough<br />

could open new naturalgas<br />

resources around the world,<br />

bringing more energy supplies to<br />

consumers while cutting the cost<br />

of carbon capture and storage.<br />

See page 21.<br />

Technical advances at<br />

<strong>ExxonMobil</strong> are helping reduce<br />

energy and raw material use, lower<br />

transportation costs, make everyday<br />

items more recyclable and<br />

boost fuel efficiency for vehicles<br />

(page 24).<br />

Plus, this issue includes a profile<br />

and interview with Mike Dolan,<br />

the corporation’s new senior vice<br />

president, who discusses key<br />

issues affecting <strong>ExxonMobil</strong>’s<br />

refining and chemicals businesses.<br />

We hope you enjoy this issue<br />

of <strong>The</strong> <strong>Lamp</strong>.<br />

Bob Davis<br />

Editor<br />

27<br />

Panorama<br />

Business highlights<br />

from around the world<br />

30<br />

<strong>ExxonMobil</strong> quarterly<br />

financial summary<br />

2<br />

11


3<br />

Safer and sounder<br />

Innovations in marine seismic<br />

surveys benefit the environment.<br />

Exploring for the oil and gas<br />

needed to meet the world’s rising<br />

energy demands requires a<br />

broad array of scientific expertise<br />

and technology. <strong>The</strong>se elements<br />

are essential to a sophisticated<br />

process for finding and<br />

developing energy resources.<br />

<strong>ExxonMobil</strong> is constantly finetuning<br />

every aspect of that<br />

process to improve efficiency,<br />

quality of information and environmental<br />

soundness.<br />

One such improvement is in<br />

the way <strong>ExxonMobil</strong> explores<br />

areas beneath the earth’s surface,<br />

searching for formations<br />

that may contain oil and gas.<br />

Before the first well is drilled, a<br />

team of geoscientists conducts<br />

extensive studies, looking for<br />

Story by Bill Corporon Photos courtesy of WesternGeco<br />

geologic prospects that could<br />

yield commercial quantities of<br />

hydrocarbons.<br />

When a promising area is<br />

identified, the next step is to<br />

conduct a seismic survey, a process<br />

invented by <strong>ExxonMobil</strong> in<br />

the 1960s. This entails sending<br />

sound waves into the earth, then<br />

measuring the returning signals.<br />

Variations in the signals that are<br />

reflected back from geologic layers<br />

help scientists visualize the<br />

subsurface rock formations.<br />

For example, sophisticated<br />

three-dimensional (3-D) seismic<br />

imaging generates massive<br />

amounts of data that produce<br />

multidimensional representations<br />

of subsurface formations.<br />

Scientists then construct a<br />

detailed virtual “image.” This<br />

helps them identify areas where<br />

commercial quantities of oil and<br />

natural gas may have accumulated.<br />

<strong>The</strong>ir analysis guides the<br />

decision to drill an exploratory<br />

well and where to position it.<br />

On land and sea<br />

Seismic surveys are conducted<br />

both on land and at sea. <strong>The</strong><br />

principles are the same for both<br />

operating environments.<br />

However, marine surveys<br />

require generating sound waves<br />

through significant water depths<br />

and then into the earth’s surface.<br />

<strong>The</strong>se sound waves are<br />

reflected back from subsurface<br />

rock layers and recorded on<br />

“streamers” that are towed


ehind a marine seismic vessel<br />

at a consistent depth.<br />

“Streamers” are long tubes<br />

containing hydrophones that<br />

convert pressure differences into<br />

electrical signals, and a fluid to<br />

maintain buoyancy. A typical<br />

streamer is 3 to 4 inches in<br />

diameter and covered with a<br />

polymer skin about one-tenth of<br />

an inch thick. <strong>The</strong>y are typically<br />

as long as 9,000 to 30,000 feet.<br />

<strong>The</strong> seismic vessel may tow<br />

one streamer or up to 10 to 12<br />

streamers, depending on the<br />

kind of seismic work being done.<br />

<strong>ExxonMobil</strong> Exploration<br />

Company Technical Vice President<br />

Rick Weber points out that this<br />

raises some unique issues.<br />

“Acquiring seismic data at<br />

sea presents its own set of challenges,”<br />

says Weber. “<strong>The</strong> equipment<br />

can encounter commercial<br />

fishing gear, debris and, of<br />

course, ocean currents. In addition,<br />

sharks have been known to<br />

mistake the streamers for lunch.”<br />

Above: Dennison Refamonte (left)<br />

and Edmarques Costa of WesternGeco<br />

prepare to deploy solid streamers for<br />

the seismic survey in the Canadian<br />

Beaufort Sea. <strong>The</strong> new streamers provide<br />

environmental benefits compared<br />

to fluid-filled types.<br />

At left: WesternGeco’s Western Patriot<br />

en route to the Canadian Beaufort Sea,<br />

where the vessel conducted a 3-D<br />

marine seismic survey covering some<br />

1,000 square miles this summer.<br />

To ensure accurate readings,<br />

the streamers must be flexible,<br />

buoyant and maintained at a<br />

consistent water depth, usually<br />

about 15 to 30 feet. Traditionally,<br />

this has been achieved by filling<br />

the streamers with fluid, usually<br />

a form of light diesel fuel. <strong>The</strong><br />

fluid helps provide the necessary<br />

buoyancy and provides coupling<br />

for the hydrophones.<br />

Innovations<br />

While fluid streamers have been<br />

effective, <strong>ExxonMobil</strong> has sought<br />

to make wider use of other<br />

options. <strong>The</strong> company needed<br />

streamers that provided the same<br />

buoyancy, flexibility and hydrophone<br />

sensitivity as fluid-filled<br />

devices, but with increased resistance<br />

to tears and other damage<br />

that might cause fluid leaks.<br />

<strong>ExxonMobil</strong>’s marine seismic<br />

work is carried out by contractors<br />

with world-class experience<br />

and global operations.<br />

<strong>ExxonMobil</strong>’s senior manage-<br />

When a marine seismic survey<br />

is conducted, sound waves are<br />

recorded on “streamers” towed<br />

behind the vessel to provide 3-D<br />

images of the subsurface rock.<br />

Illustration by Pat Gabriel<br />

ment has met with the company’s<br />

key contractors to discuss the<br />

wider use of two alternatives to<br />

fluid-filled streamers.<br />

One is a “solid streamer.” It’s<br />

filled with high-density polyurethane<br />

foam and a small quantity<br />

of light diesel around the hydrophones.<br />

<strong>The</strong> other is filled with gel. <strong>The</strong><br />

gel consists of a nonhazardous,<br />

petroleum-based synthetic urethane<br />

polymer.<br />

<strong>The</strong> company’s contractors<br />

share <strong>ExxonMobil</strong>’s goal to minimize<br />

the environmental impact of<br />

seismic surveys by using solid and<br />

gel streamers. Many had already<br />

been making the conversion.<br />

For example, the French company<br />

CGGVeritas, which has the<br />

industry’s largest fleet of 20 seismic<br />

vessels, has converted 12 vessels<br />

to solid streamers. <strong>The</strong>y plan to<br />

convert approximately 90 percent<br />

of their entire fleet by 2010.<br />

Norway-based PGS plans to<br />

have 17 vessels in its fleet by<br />

2009, and all will be equipped with<br />

solid and gel streamers.<br />

WesternGeco, the surface seismic<br />

company of Schlumberger,<br />

has acquired two large 3-D projects<br />

for <strong>ExxonMobil</strong> this year in<br />

New Zealand and in the Canadian<br />

Beaufort Sea using solid streamers.<br />

“<strong>The</strong> cooperation we’ve received<br />

from our contractors has been<br />

essential and gratifying,” says Rick<br />

Weber. “And it’s paying off. Today<br />

about 45 percent of our seismic<br />

fleet uses solid or gel streamers.<br />

We expect that to rise to 70 percent<br />

in 2009. This shows what we<br />

can accomplish when all the parties<br />

work together to achieve an<br />

important goal with tangible environmental<br />

benefits.” the <strong>Lamp</strong><br />

4


5<br />

Papua New Guinea<br />

LNG project plans move ahead<br />

A proposed project in the South-<br />

ern Highlands and Western<br />

Provinces of PNG could bring<br />

new supplies of liquefied natural<br />

gas (LNG) to world markets by<br />

the next decade.<br />

<strong>The</strong> initial development envisions<br />

the construction of the<br />

960-million-cubic-feet-a-day<br />

gas-conditioning plant and a gas<br />

pipeline to a liquefaction plant to<br />

be built on the Gulf of Papua near<br />

Port Moresby, the nation’s capital.<br />

<strong>The</strong> LNG plant would produce 6<br />

million metric tons a year of LNG<br />

for shipment to international markets.<br />

<strong>The</strong> gas is to be transported<br />

to the plant by a 440-mile pipeline<br />

(250 miles subsea). Liquids<br />

recovered at the existing Hides<br />

gas plant would be combined<br />

with crude oil from the oil operations<br />

and transported through<br />

the existing oil export system to<br />

the Kumul platform, an offshore<br />

tanker loading facility.<br />

Earlier this year <strong>ExxonMobil</strong><br />

and the project joint venturers<br />

signed commercial agreements<br />

naming <strong>ExxonMobil</strong> affiliate Esso<br />

Highlands as operator and sole<br />

marketing representative for the<br />

joint venture. <strong>The</strong>y also signed<br />

a gas agreement with the PNG<br />

State establishing the legal and<br />

fiscal framework for this significant<br />

development.<br />

“<strong>ExxonMobil</strong> is pleased to have<br />

Story by Bob Davis<br />

Important new energy supplies could be produced from the remote<br />

highlands of Papua New Guinea (PNG) under a plan currently being<br />

developed by <strong>ExxonMobil</strong> and its joint-venture participants.<br />

completed these key agreements<br />

and to move this project to its<br />

next stage,” says Peter Graham,<br />

venture manager, <strong>ExxonMobil</strong><br />

Development Company.<br />

Engineering and design<br />

That next stage involves what<br />

are called front-end engineering<br />

and design (FEED) activities. This<br />

includes engineering and design,<br />

execution planning, project<br />

financing, gas marketing, and all<br />

of the regulatory and permitting<br />

work, including community and<br />

landowner consultation.<br />

“We are expecting a final<br />

funding decision late next year,”<br />

says Graham. “We look forward<br />

to working with the PNG government<br />

and our joint-venture<br />

participants to maximize the<br />

value of the resource and provide<br />

long-term, sustainable benefits<br />

to the community.”<br />

Those benefits are expected<br />

to be substantial. An analysis<br />

by economists at ACIL Tasman<br />

suggested the project could<br />

transform the economy of PNG,<br />

potentially doubling its gross<br />

national product, boosting<br />

government revenue, providing<br />

royalty payments to landowners<br />

and creating jobs during both<br />

the construction and operational<br />

phases. With projected total<br />

direct cash flows of more than<br />

Photo by Isaac Tauno<br />

Sam Koyama, <strong>ExxonMobil</strong>’s land and<br />

community affairs manager, addresses<br />

a community meeting at Boera village<br />

near the proposed site of the gas<br />

liquefaction plant. Community and<br />

landowner consultation is an important<br />

part of project activities.


A young Huli boy in ceremonial dress continues the culture<br />

and traditions of his tribe, the predominant landowners from<br />

the Hides gas-field area. PNG is one of the most culturally<br />

diverse countries in the world, and the PNG LNG project area<br />

alone encompasses 13 distinct language groups.<br />

$30 billion to the PNG government<br />

and landowners during<br />

the 30-year life of the project,<br />

the development would be the<br />

largest private-sector investment<br />

ever undertaken in Papua<br />

New Guinea.<br />

National content initiatives<br />

<strong>The</strong> project would involve<br />

a national content plan that<br />

includes work force training for<br />

project construction and ongoing<br />

operations; purchasing local<br />

goods and services where possible;<br />

building local supplier proficiency,<br />

including an improved<br />

safety focus; and assisting the<br />

development of the project area<br />

communities through contributions<br />

to health, education and<br />

agriculture projects.<br />

Current participating interests<br />

in the PNG LNG project are<br />

<strong>ExxonMobil</strong> (Esso Highlands<br />

Limited as oper-<br />

ator) 41.5 percent,<br />

Oil Search<br />

34.0 percent,<br />

Photo by Anna Schulze<br />

To learn more<br />

pnglng.com<br />

Santos 17.7 percent, AGL 3.6<br />

percent, Nippon Oil 1.8 percent,<br />

Mineral Resources Development<br />

Company 1.2 percent and Eda<br />

Oil 0.2 percent. <strong>The</strong> PNG State<br />

will join as an equity participant<br />

at financial close. the <strong>Lamp</strong><br />

Papua New Guinea at a glance<br />

Geography: 178,711 square miles, about the size of California;<br />

terrain is mostly mountains with coastal lowlands and foothills.<br />

Climate: Tropical, with two distinct monsoon seasons (Dec.-<br />

March and May-Oct.).<br />

Population (2007): 6.7 million, with an average annual growth<br />

rate of 1.8 percent.<br />

People: <strong>The</strong> indigenous population is one of the most ethnically<br />

diverse in the world, attributable to the isolation created by the<br />

mountainous terrain. More than 700 unrelated live languages are<br />

spoken, but the official languages are English, Melanesian Pidgin<br />

and Hiri Motu. <strong>The</strong> highland regions of the country are home to<br />

40 percent of the population.<br />

Government: Constitutional parliamentary democracy.<br />

Natural resources: Gold, copper ore, crude oil, natural gas, lumber,<br />

fish, cocoa, coffee, tea, palm oil, copra oil and rubber.<br />

Juha wellheads<br />

elevation – 3,117 feet<br />

Rich gas line<br />

Juha<br />

production facility<br />

250 mcfd<br />

Kutubu<br />

oil facility<br />

(existing)<br />

Australia<br />

•Wewak<br />

Kopi<br />

•<br />

Oil export<br />

platform<br />

(existing)<br />

Subsea<br />

gas line<br />

250 miles<br />

Hides wellheads<br />

elevation – 5,577 to 9,186 feet<br />

Liquid line<br />

Papua New Guinea<br />

•Lae<br />

LNG plant<br />

•<br />

Port Moresby<br />

Liquids line<br />

Gas line<br />

Hides gasconditioning<br />

plant<br />

960 mcfd Angore<br />

wellheads<br />

Liquids line to Kutubu<br />

Gas line to Kopi<br />

Illustration by Pat Gabriel<br />

6


Can crowding into dark crawl<br />

spaces in attics and under<br />

houses to pull electrical wiring be<br />

inspirational? New <strong>ExxonMobil</strong><br />

Senior Vice President Mike Dolan<br />

believes it can.<br />

“My dad was a plant maintenance<br />

electrician,” says Dolan.<br />

“On weekends while I was in<br />

high school, he took on various<br />

electrical jobs around our<br />

hometown of North Attleboro,<br />

Massachusetts, and I went along<br />

to help. If someone had to crawl<br />

under a house to pull wire, that<br />

would be me. If someone had<br />

to crawl into an attic to pull wire,<br />

that would be me.<br />

“I’m not sure how many crawl<br />

spaces I managed to squeeze<br />

into over four or five years. But<br />

by the time I was ready for college,<br />

I had learned a great deal<br />

about how things work from a<br />

mechanical perspective, and I<br />

thought about pursuing a career<br />

in engineering.”<br />

Dolan initially wanted to<br />

become an electrical engineer<br />

because of the knowledge he had<br />

developed in assisting his dad.<br />

“But that was toward the end<br />

of the Vietnam War,” he recalls,<br />

“and a lot of electrical engineers<br />

in defense-related jobs were<br />

being laid off. After I checked<br />

with a few people, I was told<br />

chemical engineers never<br />

get laid off. Even if they were<br />

7<br />

Career inspiration<br />

from a crawl space<br />

Profile by Mike Long Photography by Jim Reisch<br />

stretching the truth, I didn’t need<br />

a lot of convincing.”<br />

An indirect path to Mobil<br />

Dolan graduated from Worcester<br />

Polytechnic Institute (WPI) in<br />

Worcester, Massachusetts, in<br />

1975 with a degree in chemical<br />

engineering, and accepted a job<br />

with the global engineering firm<br />

of UOP.<br />

“I gained a lot of experience<br />

with technology that happened<br />

to be of interest to Mobil. After a<br />

five-year ‘delay,’ Mobil hired me<br />

in 1980 to work at its Paulsboro,<br />

New Jersey, research lab to help<br />

advance new processing technology,<br />

including the startup of new<br />

fluid catalytic-cracking units.”<br />

From Australia<br />

to Saudi Arabia<br />

Dolan worked in refining for<br />

13 years in both engineering<br />

and management. He cites his<br />

two years as a member of the<br />

leadership team at the Adelaide<br />

Refinery in Australia as probably<br />

the most satisfying.<br />

“It was an outstanding opportunity<br />

early in my career. I learned<br />

how to manage and lead people<br />

in a very different, unionized environment<br />

and also had to look<br />

beyond the refinery itself. As a<br />

key contributor to the local economy,<br />

the refinery was the ‘big fish<br />

in a little pond’ and received a lot<br />

New Senior Vice President Mike Dolan has seen a lot of the<br />

world in his 33-year career. And every step of the way, some<br />

sage advice that his dad had for him early in life has continued<br />

to serve him, his family and fellow employees quite well.<br />

of community interest.”<br />

Dolan spent most of the next<br />

15 years in petrochemicals, initially<br />

leading the aromatics, olefins<br />

and polyethylene businesses<br />

before being promoted to vice<br />

president and general manager<br />

for the Americas for Mobil<br />

Chemical. After the merger, he<br />

moved to Brussels as <strong>ExxonMobil</strong><br />

Chemical’s regional director for<br />

the Middle East and Africa.<br />

In 2001, after <strong>ExxonMobil</strong><br />

accepted an invitation to bid on<br />

a major natural gas development<br />

package in Saudi Arabia,<br />

Dolan moved to the capital city<br />

of Riyadh as executive vice president<br />

of <strong>ExxonMobil</strong> Saudi Arabia.<br />

“It was primarily an upstream<br />

venture but also offered new<br />

petrochemical-manufacturing<br />

opportunities. While I brought my<br />

chemical and downstream expertise<br />

to the project team, I learned a lot<br />

about the upstream. Of course, after<br />

September 11, we had much to do<br />

in terms of keeping ahead of the<br />

changes that were occurring.”<br />

After a brief return to refining in<br />

2003 as deputy to the president<br />

of <strong>ExxonMobil</strong> Refining & Supply,<br />

Dolan was named president of<br />

<strong>ExxonMobil</strong> Chemical Company<br />

in 2004.<br />

Dad was right<br />

His promotion to the Exxon Mobil<br />

Corporation Management Commit-<br />

tee as a senior vice president in April<br />

2008 proved a happy surprise.<br />

“Looking back, my career goals<br />

Global recognition for historic WPI<br />

Mike Dolan is proud to call the second-oldest engineering<br />

school in the United States his alma mater.<br />

Founded in 1865, Worcester Polytechnic Institute (WPI) in<br />

Worcester, Massachusetts, began as a free institute to teach<br />

New England farm boys the sciences needed to support the<br />

region’s growing industrialization.<br />

Dolan, who serves as a WPI trustee, notes the school has<br />

become globally recognized for its project-focused curriculum<br />

in which students work in teams off campus to solve real-world<br />

problems. About half of these projects are outside the United<br />

States. WPI sends more engineering and science students overseas<br />

than any other U.S. university.


were simple. I just wanted to be<br />

an engineer, see the world and<br />

do the best job I could do. If I had<br />

had a career plan, advancing this<br />

far would not have seemed to be<br />

a reasonable expectation.”<br />

Dolan attributes his successful<br />

career partly to having never said<br />

“no” to new opportunities.<br />

He also cites Mike Ramage,<br />

retired president of <strong>ExxonMobil</strong><br />

Research and Engineering, and<br />

Ray McGowan, retired executive<br />

vice president of <strong>ExxonMobil</strong><br />

Chemical, as excellent management<br />

role models.<br />

“<strong>The</strong>y brought a lot of energy to<br />

their work and cared deeply about<br />

their employees. Both trusted me<br />

with tremendous assignments at a<br />

fairly young age.”<br />

But there are two other mentors<br />

whose influence has been significant<br />

from the day he drew his first<br />

breath.<br />

“My mom and dad gave their<br />

children their love and support<br />

and instilled in us the value of hard<br />

work. And even when I was crawling<br />

under houses back in Attleboro,<br />

my dad taught me every day that<br />

if you come to work to work, are<br />

considerate of those around you<br />

and strive to make a contribution<br />

wherever you can, then things will<br />

go well. He was right.” the <strong>Lamp</strong><br />

Senior Vice President Mike<br />

Dolan stewards <strong>ExxonMobil</strong>’s<br />

refining, supply and chemical<br />

businesses as well as company<br />

interests in China, Japan,<br />

Singapore, France, Belgium, the<br />

Netherlands and Luxembourg.<br />

8


9<br />

<strong>The</strong> outlook for<br />

refining and chemicals<br />

What key challenges are<br />

facing <strong>ExxonMobil</strong> and the<br />

global refining industry?<br />

Challenges are nothing new to<br />

the refining business – we have<br />

been working for decades to<br />

provide reliable, affordable energy<br />

to consumers around the world.<br />

<strong>The</strong> primary challenge facing<br />

the industry is economically<br />

meeting the growing demand<br />

for energy. And, it’s not just that<br />

demand is increasing, but the<br />

product needs are changing as<br />

well. Gasoline demand in mature<br />

markets such as North America,<br />

Japan and Europe is decreasing,<br />

while global demand for diesel is<br />

strong. What this means for refiners<br />

is that we need to find ways<br />

of using our equipment and supply<br />

systems to meet the shifting<br />

demand as efficiently as possible.<br />

Interview by Mike Long Photography by Jim Reisch<br />

As the <strong>ExxonMobil</strong> Management Committee’s newest<br />

member, Senior Vice President Mike Dolan has stewardship<br />

responsibilities for a wide range of businesses and departments<br />

as well as in several countries. Key among them are<br />

<strong>ExxonMobil</strong> Refining & Supply Company and <strong>ExxonMobil</strong><br />

Chemical Company. In this interview, Dolan highlights<br />

issues impacting the refining and chemical businesses.<br />

At the same time, the crude<br />

we use to make our products is<br />

changing as new supplies enter<br />

the market. We continue to find<br />

innovative ways to refine these<br />

often difficult-to-process crudes<br />

to maximize our raw material<br />

flexibility.<br />

<strong>The</strong> industry is also facing<br />

ongoing changes to productquality<br />

specifications. New<br />

regulations often require major<br />

capital investments that ultimately<br />

increase the cost of producing<br />

fuels. Our challenge is to develop<br />

and implement economic ways to<br />

meet the new requirements more<br />

efficiently than our competition.<br />

What are the implications<br />

of these trends?<br />

<strong>The</strong> refining industry will need<br />

to adjust in order to meet both<br />

demand growth in Asia and the<br />

shifting demand in mature markets.<br />

At the same time, refiners<br />

must make significant capital<br />

investments in many markets to<br />

produce lower-emissions fuels.<br />

Add to this the expectation<br />

that refining margins will return<br />

to historically lower levels, and<br />

this could mean some refiners<br />

may have to make some tough<br />

economic decisions. However,<br />

given our competitive strengths,<br />

we expect not only to survive,<br />

but to do well.<br />

How is <strong>ExxonMobil</strong><br />

prepared for this highly<br />

competitive environment?<br />

<strong>ExxonMobil</strong> has been in the<br />

refining business for a long time.<br />

One of our great strengths is<br />

that our approach to the business<br />

has not changed, regardless<br />

of industry conditions.<br />

<strong>The</strong> clearest example is our<br />

consistent focus on operational<br />

excellence. Our organization<br />

works hard to continuously<br />

improve all aspects of our operations<br />

to keep our refineries running<br />

safely, reliably and at peak<br />

efficiency.<br />

Technology also plays a critical<br />

role in our competitive position,<br />

and we’ve demonstrated a consistent<br />

commitment to research<br />

and development. We can deploy<br />

our own internally developed<br />

technology when new challenges<br />

arise, and this is a capability that<br />

many of our competitors simply<br />

don’t have. New technologies<br />

have allowed us to diversify the<br />

kinds of crude we can use, optimize<br />

the yields of higher-value<br />

products and improve the energy<br />

efficiency of our refineries and<br />

chemical plants.


<strong>ExxonMobil</strong> Refining has also<br />

continued to invest in projects –<br />

not only to meet new regulatory<br />

requirements, but also to lower<br />

operating costs and enhance<br />

yields and capacity. Our extensive<br />

capital project management<br />

experience allows us to<br />

implement these projects more<br />

efficiently than others.<br />

Of course, none of this would<br />

be possible without our exceptionally<br />

talented work force. Our<br />

people create a real and sustainable<br />

source of competitive<br />

advantage.<br />

Please share your perspectives<br />

regarding higher<br />

gasoline prices and their<br />

impact on consumers.<br />

No one likes spending $70 or<br />

more to fill up his or her car.<br />

Through our own personal expe-<br />

riences and through those of our<br />

family members and friends, we<br />

understand that people are struggling<br />

to fit these additional costs<br />

into family budgets.<br />

Demand has grown along with<br />

the economic progress of many<br />

developing countries, especially in<br />

Asia. Progress is good, but it has<br />

contributed to the tightening of fuel<br />

supplies. While we have no control<br />

over the markets, <strong>ExxonMobil</strong> can<br />

do its part to address this problem<br />

by adding more supply. To do this,<br />

we need greater access to more<br />

prospective areas around the<br />

world, including acreage off the<br />

U.S. East, West and Gulf coasts.<br />

<strong>ExxonMobil</strong> has the industryleading<br />

technology to develop<br />

resources to their fullest potential<br />

and at the lowest cost. We also<br />

have technology that is superior<br />

to what was available 30 to 40<br />

years ago for developing these<br />

resources with utmost care<br />

for the environment. If allowed<br />

greater access, we could over<br />

time help bring supply and<br />

demand into better balance so<br />

that consumers could see an<br />

impact at the pump.<br />

What are the primary challenges<br />

facing <strong>ExxonMobil</strong>’s<br />

chemical business and how<br />

is the company responding?<br />

<strong>The</strong>re are three areas where<br />

we spend a lot of our research<br />

dollars in constant pursuit of<br />

improvements – advantaged<br />

feedstocks, process efficiency<br />

and product differentiation. All<br />

three areas present challenges,<br />

but the most important is feedstock.<br />

You are always looking<br />

for opportunities to increase<br />

production with lower-cost feeds.<br />

Successfully doing that will generate<br />

the most economic return.<br />

One area where we have done<br />

a great job is the integration of<br />

our world-scale refineries (sources<br />

of feedstock) and our world-scale<br />

chemical plants (users of feedstock)<br />

and determining how to<br />

upgrade each hydrocarbon molecule<br />

to obtain the highest value.<br />

No one does it better. We can<br />

take refinery streams that other<br />

companies may be unable to use<br />

and convert them into highervalue<br />

chemical products.<br />

We have done a great job at<br />

maximizing the use of refinery<br />

streams through new technology<br />

and molecule management. But,<br />

how do you get more advantaged<br />

feedstocks, especially in<br />

the growing Asian market, which<br />

is not feedstock rich? We think<br />

the answer may lie in developing<br />

new technology to generate feedstocks<br />

from lighter hydrocarbons,<br />

such as natural gas, to very heavy<br />

materials such as crude oil and<br />

even perhaps from coal. That<br />

continues to be a major focus in<br />

our research program.<br />

What message would<br />

you like to leave with<br />

shareholders regarding<br />

the future of <strong>ExxonMobil</strong>’s<br />

chemical business?<br />

<strong>ExxonMobil</strong> Chemical is one of<br />

the most profitable chemical companies<br />

in the world. Our return on<br />

capital employed is currently more<br />

than 10 percent higher than that<br />

of our closest competitor.<br />

We have experienced some<br />

very good margins, but the business<br />

is cyclical, and margins go<br />

up and down. We have gotten<br />

to where we are today because<br />

we have a long-term strategy and<br />

have stayed true to that strategy,<br />

making smart decisions decade<br />

after decade. Our chemical<br />

employees understand that they<br />

owe their success to the whole<br />

line of people who over the past<br />

40 years or so came to work and<br />

did the right things every day. That<br />

is a heritage we all take seriously.<br />

For many of the projects and<br />

initiatives we undertake today,<br />

we really won’t see the full benefit<br />

for five, 10 or even 15 years.<br />

But I think it is important to all of<br />

our people and to our shareholders<br />

that we are contributing to<br />

the long-term success just like<br />

those who came before us.<br />

the <strong>Lamp</strong><br />

10


2008 marks 90th year<br />

for <strong>The</strong> <strong>Lamp</strong> publication<br />

In 1918, the strains of growth<br />

and rapid change were being<br />

felt throughout Standard Oil<br />

Company (New Jersey).<br />

<strong>The</strong> company’s assets had<br />

nearly doubled to $700 million<br />

in six years, mainly due to an<br />

increased focus on building its<br />

oil-supply base in the United<br />

States and overseas. With the<br />

naming of Walter Teagle as president<br />

in 1917, the company’s<br />

expansion had accelerated.<br />

Meanwhile, as the “war to<br />

end all wars” raged on, Jersey<br />

Standard continued to run its production,<br />

refining and transportation<br />

operations at full throttle. <strong>The</strong><br />

effort eventually would provide<br />

one-fourth of the total petroleum<br />

requirements of the United States<br />

and its allies in World War I.<br />

Despite the heightened activity,<br />

Jersey Standard managed<br />

to achieve dramatic change on<br />

yet another front. <strong>The</strong> company<br />

and refinery employees in early<br />

1918 negotiated one of the<br />

most progressive benefits/laborrelations<br />

packages of that time.<br />

It included proposals recommended<br />

by industrial relations<br />

pioneer Clarence Hicks, who<br />

along with Teagle supported an<br />

eight-hour workday.<br />

11<br />

Story by Mike Long<br />

Today, <strong>The</strong> <strong>Lamp</strong> has a readership<br />

of more than 650,000 who look to<br />

the magazine for information about<br />

<strong>ExxonMobil</strong> and the energy industry.<br />

Lighting <strong>The</strong> <strong>Lamp</strong><br />

With change “busting out all<br />

over” at Jersey, the company<br />

recognized it needed a formal<br />

avenue for keeping employees<br />

informed. While president of<br />

Jersey’s Imperial Oil Limited<br />

affiliate in Canada, Teagle had<br />

launched the Imperial Oil Review<br />

in 1915. He valued how the<br />

magazine with its company news<br />

and information had helped build<br />

employee morale. After becoming<br />

president of Jersey, Teagle<br />

invited Imperial Oil Review Editor<br />

Victor Ross, a former Toronto<br />

Globe financial writer, to come<br />

to the company’s 26 Broadway<br />

headquarters in New York to<br />

help him “light <strong>The</strong> <strong>Lamp</strong>.”<br />

<strong>The</strong> editorship was soon<br />

turned over to Northrop Clarey,<br />

former financial editor of <strong>The</strong> New<br />

York Times. However, Teagle<br />

served as <strong>The</strong> <strong>Lamp</strong>’s ex officio<br />

editor-in-chief, generating article<br />

ideas, offering copy edits and dictating<br />

editorial topics.<br />

Volume 1, Number 1 of <strong>The</strong><br />

<strong>Lamp</strong>, published in May 1918,<br />

outlined Teagle’s original objective<br />

for the magazine, that it<br />

cultivate “a spirit of fellowship<br />

and cordial cooperation” among<br />

employees. But he also envi-<br />

Since its founding, more than 400 issues – and some<br />

12,000 pages of articles – have been published.<br />

sioned a much wider purpose,<br />

that its “rays will reach everyone<br />

interested directly or indirectly in<br />

the fortunes of the company,”<br />

allowing “no shadows of misconception<br />

nor suspicion to endure,”<br />

and that “it will prove to be a<br />

lighthouse in the uncharted seas<br />

of the future.”<br />

<strong>The</strong> public takes notice<br />

That wider purpose soon began<br />

to bear fruit. Investors, shareholders,<br />

government officials, teach-<br />

ers, librarians, newspaper editors<br />

and other nonemployees increasingly<br />

looked to the magazine as<br />

a reliable source of information<br />

about the company and the international<br />

petroleum industry.<br />

While the magazine continued<br />

to cover benefits issues and local<br />

news of direct interest to employees,<br />

stories titled “Why Gasoline<br />

Now Costs More” and “Increasing<br />

Crude Supply” (topics that lately<br />

have recaptured the public’s<br />

attention) had wide appeal, partic


ularly in light of the world’s growing<br />

love affair with the automobile.<br />

Others such as “Adventures in the<br />

Upper Amazon” and “Hunting for<br />

Oil in Arabia” stoked the U.S. public’s<br />

fascination about life in exotic,<br />

faraway lands. In fact, requests<br />

for copies reached such a point in<br />

the early 1920s that the company<br />

began accepting subscriptions for<br />

$1 a year.<br />

Another reason the magazine<br />

proved so popular was that it<br />

essentially served as Jersey’s<br />

only external communications<br />

channel. Teagle believed that<br />

almost anything worth knowing<br />

about the company could be<br />

found in <strong>The</strong> <strong>Lamp</strong>’s feature articles<br />

and management editorials.<br />

By the early 1940s, however,<br />

it had become clear that the<br />

company’s growth required a<br />

First issue, May 1918 June 1931 April 1943 Spring 2004<br />

Readers give <strong>The</strong> <strong>Lamp</strong> “excellent” feedback<br />

More than 400 issues and some 12,000 pages since its<br />

founding in 1918, <strong>The</strong> <strong>Lamp</strong> continues to enjoy widespread<br />

interest among its readers.<br />

A recent survey of shareholders revealed that 83<br />

percent of respondents rated the quality of <strong>The</strong> <strong>Lamp</strong><br />

either good or excellent and that nearly 70 percent of<br />

them read the magazine closely. Some 30 percent on<br />

average also passed their copy to at least two other<br />

people. With a circulation of about 650,000, it’s esti-<br />

more comprehensive public<br />

communications program. Jersey<br />

responded by organizing a public<br />

relations department in 1943.<br />

And with a growing number of<br />

local departmental and affiliate<br />

publications covering employee<br />

news, Jersey also officially redirected<br />

<strong>The</strong> <strong>Lamp</strong> exclusively to<br />

external audiences, especially<br />

shareholders. In addition, it<br />

stepped up efforts to add more<br />

opinion leaders in government,<br />

business and academia to the<br />

circulation list.<br />

From one century<br />

to the next<br />

During the seven decades<br />

that have followed, as Jersey<br />

Standard became Exxon and<br />

as Exxon became part of the<br />

new <strong>ExxonMobil</strong>, <strong>The</strong> <strong>Lamp</strong> has<br />

mated that printed copies of <strong>The</strong> <strong>Lamp</strong> reach more<br />

than 1 million people every quarter.<br />

In addition, tens of thousands of others access<br />

<strong>The</strong> <strong>Lamp</strong> via the company’s Web site, <strong>ExxonMobil</strong><br />

.com, where each issue is posted and back copies<br />

are archived. It is interesting to note that despite the<br />

popularity of the Web, 75 percent of those participating<br />

in the recent survey indicated they wanted to continue<br />

receiving printed copies of <strong>The</strong> <strong>Lamp</strong> by mail.<br />

tracked the company’s progress<br />

for hundreds of thousands of<br />

readers and provided a window<br />

on the world around the company’s<br />

operations.<br />

From one generation to the<br />

next, <strong>The</strong> <strong>Lamp</strong> has put a face on<br />

one of the world’s largest enterprises.<br />

It has done so by telling<br />

the stories of employees whose<br />

talents and imagination have<br />

continued to improve the quality<br />

of life for people around the world<br />

and whose commitment to corporate<br />

citizenship has consistently<br />

remained a top priority.<br />

From one century to the next,<br />

<strong>The</strong> <strong>Lamp</strong> has served as an<br />

important stage for the company<br />

to speak out on issues affecting<br />

public and governmental policy,<br />

many that have often dealt with<br />

energy supply and demand.<br />

Today, 90 years since the magazine’s<br />

founding, that stage is as<br />

critical as it has ever been.<br />

“<strong>The</strong> world again finds itself<br />

in significant transition regarding<br />

the use and availability<br />

of energy,” says Ken Cohen,<br />

<strong>ExxonMobil</strong> Public Affairs vice<br />

president. “And, just as the company<br />

has faced these challenges<br />

in the past, our people recognize<br />

and understand today’s critical<br />

energy issues<br />

and are working<br />

hard to find<br />

solutions. In<br />

To learn more<br />

exxonmobil.com/history<br />

honoring Walter Teagle’s admonition<br />

of 90 years ago, <strong>The</strong> <strong>Lamp</strong><br />

remains an important outlet to<br />

communicate these efforts to our<br />

shareholders and employees as<br />

well as to opinion leaders and<br />

other stakeholders.” the <strong>Lamp</strong><br />

12


West Africa update<br />

<strong>ExxonMobil</strong> is adding to the<br />

world’s energy supply – not only<br />

by finding new reservoirs, but also<br />

by making existing ones more<br />

productive, while at the same<br />

time reducing greenhouse-gas<br />

emissions. That’s happening<br />

now in the East Area fields of the<br />

Nigeria joint-venture concession.<br />

<strong>The</strong> Nigerian National Petroleum<br />

Corporation and an Exxon<br />

Mobil Corporation affiliate, Mobil<br />

Producing Nigeria (MPN), have<br />

completed a two-stage development<br />

to enhance production from<br />

aging fields, reduce flaring and<br />

recover high-value natural gas<br />

liquids from the gas stream.<br />

<strong>The</strong> latest development,<br />

called the Natural Gas Liquids II<br />

(NGL II) project, follows the 2006<br />

Additional Oil Recovery project<br />

13<br />

and completes East Area’s fiveyear,<br />

$3.5 billion investments.<br />

Recently completed work on<br />

the NGL II project includes the<br />

installation of an offshore gasprocessing<br />

complex, more than<br />

125 miles of new pipelines and<br />

the expansion of Nigeria’s Bonny<br />

River Terminal. <strong>The</strong> new facilities<br />

can process up to 950 million<br />

cubic feet of natural gas a day,<br />

yielding up to 50,000 barrels a<br />

day of natural gas liquids.<br />

“This project is aligned closely<br />

with Nigeria’s goals of growing<br />

reserves, increasing production<br />

and reducing flared gas,”<br />

says Al Hirshberg, <strong>ExxonMobil</strong><br />

Development Company vice<br />

president for established areas.<br />

“<strong>The</strong> work on the NGL II project<br />

includes more than 12 million<br />

Story by Richard Cunningham Photography by Michael Kotlen<br />

Fifth major<br />

<strong>ExxonMobil</strong> startup<br />

in 2008 commercializes Nigerian<br />

natural gas liquids<br />

Project is also boosting oil production<br />

and cutting carbon emissions.<br />

hours completed by Nigerian<br />

workers and local contractors<br />

with an outstanding safety performance.<br />

We are proud of our<br />

accomplishments with this significant<br />

project and the contributions<br />

it has made to Nigeria.”<br />

<strong>The</strong> NGL II project continues<br />

MPN’s tradition of strengthening<br />

and expanding the capabilities<br />

of Nigerian companies. Besides<br />

using a significant in-country<br />

labor force, the project provided<br />

an opportunity for Nigerian<br />

companies to furnish in-country<br />

fabrication, logistics support and<br />

other services. <strong>The</strong>se companies<br />

were involved in construction of<br />

the Bonny River Terminal expansion,<br />

installation of pipelines and<br />

fabrication of components for<br />

the offshore complex.<br />

A marine-transport vessel<br />

installs a new offshore platform<br />

at the East Area NGL II project.<br />

<strong>The</strong> development also includes<br />

more than 125 miles of new<br />

pipelines and an expansion of<br />

Nigeria’s Bonny River Terminal.<br />

A key part of NGL II development’s<br />

strategy included the use<br />

of funding from Nigerian banks.<br />

Approximately $220 million of<br />

the total project financing was<br />

completely arranged through<br />

Nigerian banks. This represents<br />

the first time a major oil and<br />

gas joint venture in Nigeria has<br />

completed a financing package<br />

exclusively through Nigerian<br />

financial institutions.<br />

Although a sizeable part of the<br />

total budget was spent in Nigeria,<br />

construction was on a global


scale, with 10 major engineering<br />

or fabrication sites in North<br />

America, Europe, Africa and Asia.<br />

“<strong>The</strong> sun never set on this project,”<br />

says Shuaibu Otori, MPN<br />

development manager. “During<br />

construction, activities were<br />

taking place around the world<br />

because of what we were doing<br />

here. Concurrently, the project<br />

provided excellent training and<br />

development opportunities for<br />

Nigerians involved in the project.”<br />

<strong>The</strong> long view<br />

<strong>The</strong> section known as East Area<br />

includes six shallow-water fields<br />

in the ancient Niger River delta.<br />

When the fields were developed<br />

in the 1970s, there was no market<br />

for the associated natural gas.<br />

“Over time, we learned more<br />

about the reservoirs and ways<br />

to maximize the value of the<br />

gas,” says Al Short, joint-venture<br />

operations manager. “That was<br />

the beginning of the East Area<br />

gas project.”<br />

<strong>The</strong> project gathers natural<br />

gas from most of the jointventure<br />

area, which includes<br />

hundreds of wells encompassing<br />

more than 600 square miles of<br />

open water. <strong>The</strong> natural gas liquids<br />

– propane, butane and pentanes<br />

– are extracted from the<br />

rich gas stream and transported<br />

onshore by pipeline for fractionation<br />

and storage prior to loading<br />

onto tankers for sale. <strong>The</strong> residue<br />

gas is reinjected to maintain<br />

pressure in the reservoirs and<br />

enhance oil production.<br />

In some cases, wells that had<br />

stopped producing oil are coming<br />

back on stream. <strong>The</strong> gas<br />

that is now injected is preserved<br />

and can eventually be recovered<br />

and sold. Long term, the project<br />

is expected to add 530 million<br />

gross barrels of oil and 275 million<br />

<strong>The</strong> NGL II project required expansion to the existing onshore fractionation<br />

terminal built on Bonny Island in the mid-1990s. <strong>The</strong> expansion more than<br />

doubles the onshore processing capacity of liquids arriving from offshore,<br />

and provides additional storage of fractionated products until they can be<br />

transferred into cargo tankers. <strong>The</strong> new system at the Bonny River Terminal<br />

is connected to the offshore gas-processing complex by a 90-mile pipeline.<br />

gross barrels of natural gas liquids<br />

to Nigeria’s petroleum reserves<br />

and reduce routine gas flaring.<br />

“We are already making a big<br />

difference by dramatically reducing<br />

the amount of gas being<br />

flared,” Short says.<br />

Future capacity<br />

East Area development planners<br />

see the potential for even<br />

more production from new wells<br />

to be drilled in the years ahead.<br />

<strong>The</strong> new infrastructure now in<br />

place gives MPN the capacity to<br />

develop another 500 million barrels<br />

of oil.<br />

“That is in addition to the 530<br />

million barrels of oil reserves that<br />

we estimate now,” says Ray<br />

Steinmetz, Nigeria joint-venture<br />

project executive for <strong>ExxonMobil</strong><br />

Development Company. “We<br />

think we can also recover another<br />

300 million barrels of natural gas<br />

liquids from future projects.”<br />

For at least another year, the<br />

work will continue to link East<br />

Area’s satellite offshore platforms<br />

to the central gas-processing<br />

system. <strong>The</strong> project so far has<br />

Niger Delta<br />

Oso<br />

Kpono<br />

Ekpe<br />

EkpeWW<br />

Adua<br />

Yoho<br />

Usari<br />

Enang<br />

Ata<br />

Edop<br />

Asabo<br />

Asasa<br />

0 Mi 10<br />

0 Km 16<br />

Qua Iboe<br />

Terminal<br />

Inanga Idoho Isobo<br />

Inim<br />

Eku<br />

Etim<br />

had an outstanding safety record,<br />

and all those involved intend to<br />

keep it that way.<br />

<strong>The</strong> challenge is to complete<br />

all of the renovation and construction<br />

work without affecting<br />

operations. “It’s a bit like remodeling<br />

your home while you are<br />

still living there,” Steinmetz says.<br />

“Now the end is in sight. As we<br />

Iyak<br />

Miem<br />

Ubit<br />

Utue<br />

Producing fields<br />

Gas fields<br />

Undeveloped fields<br />

upgrade the<br />

remaining<br />

platforms,<br />

we plan to<br />

LOCATION<br />

<br />

<br />

<br />

<br />

<br />

AFRICA<br />

To learn more<br />

exxonmobil.com/ngl<br />

maximize the value from the new<br />

gas-processing complex, and<br />

we are proud of the reduced flaring<br />

we have achieved, with its<br />

positive impact on the environment.”<br />

the <strong>Lamp</strong><br />

14


West Africa update<br />

15<br />

Angolan project<br />

brings gains in oil production, use of<br />

local resources and worker safety<br />

<strong>The</strong> successful startup of two more fields in <strong>ExxonMobil</strong>’s Kizomba C<br />

development off the West African coast has brought on vital additions of<br />

oil for a world whose energy needs are growing. <strong>The</strong> path to this accomplishment<br />

includes maximizing local content and a coordinated effort to<br />

improve worker safety among each of the project’s major contractors.<br />

Ninety miles off the coast<br />

of Angola, Kizomba C is<br />

<strong>ExxonMobil</strong>’s largest subsea oil<br />

project. It comprises three fields:<br />

Mondo, which came on stream<br />

in January 2008, and Saxi and<br />

Batuque, which began production<br />

this summer. It’s designed to<br />

develop 600 million barrels of oil.<br />

<strong>The</strong> development includes<br />

two floating production, storage<br />

and offloading (FPSO) vessels<br />

and 36 subsea wells.<br />

<strong>ExxonMobil</strong>, operator with a<br />

40 percent interest, was awarded<br />

Block 15, where Kizomba C is<br />

located, in 1994. <strong>The</strong> first discovery<br />

occurred in 1998. Sonangol,<br />

the Angolan national oil company,<br />

is concessionaire, and other participants<br />

include BP Exploration<br />

(Angola) Limited 26.67 percent,<br />

ENI Angola Exploration B.V. 20<br />

percent and Statoil Angola Block<br />

15 A.S. 13.33 percent.<br />

<strong>The</strong> twin FPSO vessels are the<br />

fourth and fifth production hubs<br />

Story by Bill Corporon<br />

on Block 15, where production<br />

reached a total of 700,000 barrels<br />

a day in August 2008.<br />

Startup of the Saxi and<br />

Batuque fields in Angola’s prolific<br />

Block 15 follows other <strong>ExxonMobil</strong><br />

projects that began producing<br />

in 2008, including Kizomba C<br />

Mondo (Angola), Volve (Norway),<br />

Starling (UK), ACG Phase 3<br />

(Azerbaijan) and East Area Natural<br />

Gas Liquids II (Nigeria).<br />

Maximizing local resources<br />

In developing Kizomba C,<br />

<strong>ExxonMobil</strong> has spent nearly<br />

$1.5 billion on Angolan goods<br />

and services as part of the<br />

company’s national content program.<br />

<strong>The</strong>se purchases include<br />

contracts for in-country services<br />

and training and development of<br />

Angolan personnel.<br />

For example, four local<br />

companies were selected to<br />

provide in-country fabrication<br />

expertise for such components<br />

as manifolds, mooring systems<br />

and FPSO turret structures.<br />

<strong>The</strong>se and other elements were<br />

transported from Angola to the<br />

Keppel Shipyard Limited facility<br />

in Singapore for assembly and<br />

integration into the FPSOs.<br />

In addition to purchasing equipment<br />

and fabrication services from<br />

Angolan companies, <strong>ExxonMobil</strong><br />

continued a longstanding practice<br />

of hiring and training Angolan<br />

engineers and other personnel –<br />

a practice established by the<br />

company long before production<br />

began from Kizomba C.<br />

A notable example was a new<br />

training initiative for the Kizomba<br />

C project that leveraged its contractors<br />

to provide training of<br />

Angolans in fabrication and operations-type<br />

assignments. During<br />

a two-year period, 75 employees<br />

from Angolan companies were<br />

given the opportunity to develop<br />

new skills. Many traveled to the<br />

Keppel Shipyard, where they<br />

Photo by Keith Wood<br />

Kizomba C involves the development of<br />

600 million barrels of oil from three fields<br />

using 36 subsea wells and two floating<br />

production, storage and offloading vessels,<br />

one of which is pictured above.<br />

received hands-on training in<br />

fabrication and project management<br />

skills. This included experiences<br />

in safety planning, welding,<br />

scheduling and contracting.<br />

Another 50 Angolans were<br />

trained to support and operate<br />

the FPSOs through courses<br />

provided in the United Kingdom<br />

and other European countries as<br />

well as South Africa.<br />

In turn, they brought their new<br />

skills home to Angola and, by<br />

sharing them with colleagues,<br />

helped spread knowledge and<br />

technology in the indigenous<br />

work force.<br />

“<strong>ExxonMobil</strong> is committed<br />

to developing national content<br />

and local companies wherever<br />

we operate in the world,” says<br />

Mike Flynn, vice president for


deepwater projects, <strong>ExxonMobil</strong><br />

Development Company. “Kizomba<br />

C is an excellent example, with its<br />

large scale and significant equipment<br />

and personnel needs. It<br />

demonstrates how <strong>ExxonMobil</strong><br />

integrates our unique project management<br />

capabilities to develop<br />

Angolan businesses and suppliers<br />

and deliver exceptional value.”<br />

Partnering for safety<br />

improvement<br />

<strong>The</strong> story of Kizomba C goes<br />

beyond hardware and impressive<br />

statistics. It also involves the<br />

story of a concerted, integrated<br />

and vigorous effort to ensure the<br />

safety of all workers on the project,<br />

regardless of location.<br />

This approach leverages<br />

<strong>ExxonMobil</strong>’s widely recognized<br />

and highly focused approach to<br />

safety in all jobs and operations.<br />

An example of the success of<br />

this initiative is evidenced in the<br />

impact made at Keppel Shipyard<br />

in Singapore. Keppel, a subcontractor<br />

of SBM (the contractor for<br />

the FPSOs), was contacted early<br />

on to participate in this endeavor,<br />

beginning with a comprehensive<br />

evaluation to determine worker<br />

safety awareness and attitudes at<br />

the shipyard.<br />

Keppel, with its own strong<br />

interest in worker safety, was<br />

eager to make a step-change<br />

improvement in its safety performance<br />

and readily accepted the<br />

offer to partner with <strong>ExxonMobil</strong>.<br />

“This initiative went beyond<br />

traditional safety reminders,<br />

safety requirements and emphasis<br />

on safe practices, as important<br />

as those are,” says Ken<br />

Larson, Kizomba C project manager.<br />

“It focused on the underlying<br />

safety culture and on finding<br />

new opportunities from a leadership<br />

perspective to improve<br />

safety performance.”<br />

<strong>The</strong> first step was to perform<br />

a “gap analysis” to assess the<br />

entire safety culture from senior<br />

management down to the people<br />

doing the work.<br />

Next, Larson says, was a<br />

Workers at the Keppel Shipyard in Singapore embarked on new safety<br />

programs that resulted in a significant reduction of on-the-job incidents.<br />

review of the overall safety management<br />

system and processes<br />

employed in the yard.<br />

“We made a key discovery,”<br />

he says. “We found out that<br />

while management had a strong<br />

commitment to safety, it was not<br />

visible or completely understood<br />

at the worker level.”<br />

<strong>The</strong> challenge was magnified<br />

since Keppel’s Singapore shipyard<br />

employs 16,000 workers<br />

from different countries and different<br />

cultures.<br />

Part of the improvement effort<br />

involved a specially tailored safety<br />

training and coaching program for<br />

managers, supervisors and fore-<br />

persons representing contractors<br />

and major subcontractors.<br />

Other highlights:<br />

All Keppel managers conducted<br />

regular site safety<br />

walkthroughs. <strong>The</strong>y observed<br />

employees at work, provided<br />

feedback and recorded their<br />

findings. <strong>The</strong> data were used in<br />

feedback sessions with workers.<br />

Photo courtesy of Keppel Shipyard Limited<br />

More than 2,600 supervisors<br />

and forepersons were trained to<br />

identify safe and at-risk behavior<br />

by workers. Individuals demonstrating<br />

safe behaviors received<br />

positive feedback on the spot.<br />

A safety video was developed<br />

for use with employees working<br />

on the FPSOs. A key element<br />

of the video was to encourage<br />

workers to look beyond<br />

the conventional view of safety<br />

awareness. <strong>The</strong>y were reminded<br />

that their families and loved ones<br />

have a stake in their well-being.<br />

<strong>The</strong> effort at Keppel will continue<br />

in a program called “Safety<br />

Excellence 2010,” which will<br />

recruit other companies to join<br />

the safety improvement program.<br />

Thanks to the safety initiatives<br />

undertaken by Keppel and<br />

<strong>ExxonMobil</strong>, the safety record for<br />

Keppel’s construction and assembly<br />

work for Kizomba C reached<br />

record levels.<br />

<strong>The</strong> lost-time incident rate<br />

during the course of the project<br />

was reduced to 0.24 incidents<br />

per million work hours at Keppel.<br />

That’s about 10 times better<br />

than industry averages.<br />

“Numbers are important,” says<br />

Larson, “but<br />

they aren’t the To learn more<br />

exxonmobil.com/angola<br />

whole story.<br />

This achievement<br />

means more people go<br />

home to their families at the end<br />

of every day with no injuries, in<br />

line with our goal of ‘Nobody<br />

Gets Hurt.’ In addition, it gives<br />

us valuable experience that we<br />

can leverage at other <strong>ExxonMobil</strong><br />

projects around the world.” It<br />

also resulted in exemplary performance<br />

that was a key factor<br />

in the on-time, under-budget<br />

startup of the Mondo and Saxi-<br />

Batuque projects. the <strong>Lamp</strong><br />

16


Camps for kids<br />

who like to think<br />

Have you ever asked a child,<br />

“How did you spend your summer<br />

vacation?”<br />

Fifty middle-school students<br />

in Virginia can say they built<br />

remote-controlled solar-powered<br />

robots. A similar group in Oregon<br />

will tell you that, with help from a<br />

NASA astronaut, they planned a<br />

two-year mission to Mars.<br />

In all, some 1,200 boys<br />

and girls – equal numbers of<br />

each – attended one of the<br />

25 <strong>ExxonMobil</strong> Bernard Harris<br />

Summer Science Camps in 23<br />

U.S. cities in 2008. <strong>The</strong> goal of<br />

the program is to reach good<br />

students from grades 6 through<br />

8 and excite them about math,<br />

science and technology.<br />

<strong>The</strong>re are always more applicants<br />

than the free camps can<br />

accept. With support from the<br />

<strong>ExxonMobil</strong> Foundation, however,<br />

the program reaches 15<br />

times more students than it did<br />

just three years ago.<br />

“Our target for 2009 is 30<br />

camps,” says Truman Bell,<br />

<strong>ExxonMobil</strong>’s senior program<br />

officer for Education and<br />

Diversity. “We have a very good<br />

template that Dr. Harris has<br />

developed. <strong>The</strong> two-week resi-<br />

17<br />

17<br />

<strong>ExxonMobil</strong> Bernard Harris Summer Science Camps give bright<br />

but disadvantaged U.S. middle-school students the chance to<br />

experience the world of science and technology for themselves.<br />

dential camps, which are hosted<br />

by universities around the country,<br />

are a great outreach program<br />

for the schools as well. For<br />

many kids, it is their first time on<br />

a college campus.”<br />

<strong>The</strong> camp programs are<br />

based on national science<br />

and math standards. <strong>The</strong>re’s a<br />

strong emphasis on applied science<br />

and hands-on activity.<br />

To take full advantage of a<br />

university’s expertise, individual<br />

camp directors have some latitude<br />

in the way they teach the<br />

classes.<br />

<strong>The</strong> University of Oklahoma,<br />

for example, is strong in the<br />

earth sciences, so the camp it<br />

sponsors teaches a range of<br />

math, biology and chemistry, all<br />

related to geoscience.<br />

At <strong>The</strong> University of Central<br />

Florida, the 2008 camp focused<br />

on forensic science. For two<br />

weeks, the students learned<br />

about the math, science and<br />

technology of a criminal investigation.<br />

On the final day, campers<br />

conducted a mock trial,<br />

each taking the role of someone<br />

involved in the case.<br />

“Campers come to the universities<br />

and live in dormitory rooms<br />

Story by Richard Cunningham Photography by Marc Chartrand<br />

during the week,” Bell explains.<br />

“That exposes them to a college<br />

atmosphere. Some of the teachers<br />

are college professors. <strong>The</strong><br />

programs are intense, designed<br />

for top students who are already<br />

motivated to learn. By the end<br />

of camp, we want them to leave<br />

with a new appreciation for the<br />

real world of math and science.”<br />

It’s OK to be smart<br />

<strong>The</strong>re is a consistent theme<br />

at every camp – it is OK to be<br />

smart. Dr. Bernard Harris, cofounder<br />

of the program, visits<br />

many of the camps to meet the<br />

students and press home the<br />

message.<br />

“It’s OK to be a geek, because<br />

geeks rule the world,” he told a<br />

group of New Jersey campers in<br />

July. “Each of you was born into<br />

this world with infinite possibilities.<br />

You are the only one to decide<br />

your special talents and skills.”<br />

<strong>The</strong> Harris Foundation, which<br />

organizes the camps, empowers<br />

students, especially minorities<br />

and those who are economically<br />

and/or socially disadvantaged,<br />

through math and science education.<br />

Whenever Harris speaks,<br />

he relates to young people by<br />

Dr. Bernard Harris,<br />

physician and former<br />

astronaut, is the inspiration<br />

behind a rigorous program<br />

that fosters math and<br />

science skills in middleschool<br />

children. This past<br />

summer, more than 1,200<br />

students attended one of<br />

25 camps held in 23 cities<br />

across the United States.


drawing on his own experience.<br />

“I grew up poor, not having the<br />

same opportunities as others,”<br />

he explains. “I was raised by a<br />

single mom. When she wanted<br />

a fresh start, she took a job with<br />

the Bureau of Indian Affairs. I<br />

grew up in Arizona and New<br />

Mexico, in the Navajo Nation,<br />

where my mother taught school.”<br />

As a child with few early role<br />

models, Harris found his own<br />

strengths.<br />

“I believe we all have power<br />

inside,” he says. “We are all born<br />

multitalented, with the belief that<br />

nothing is impossible, but then<br />

the environment of our family and<br />

community takes over. It begins<br />

to tell us ‘no’ in different ways.<br />

This can confine and restrict us.<br />

We may end up, as many young<br />

people have today, struggling<br />

and not believing in ourselves.”<br />

<strong>The</strong> best feedback<br />

For all who attend, science<br />

camp is more than a one-time<br />

event. <strong>The</strong>re is a Saturday acad-<br />

emy or other programs during<br />

the academic year as follow-up<br />

for each camp, and many of the<br />

students keep in touch with the<br />

new friends they’ve made.<br />

“We want to know if we’re<br />

having an impact,” Harris says.<br />

“We want to know how we can<br />

improve the camps.”<br />

Camp organizers also track<br />

student progress through grades<br />

and state performance tests.<br />

Probably the best feedback,<br />

however, comes from the families<br />

and students themselves.<br />

“We often hear from former<br />

campers and their families,”<br />

Harris says. “Many say our<br />

program is the reason they<br />

are in math and science. One<br />

dad told me recently that his<br />

daughter came home from one<br />

of our earlier camps so excited<br />

that she became an educator.<br />

Now she’s in her second year of<br />

teaching at a math and science<br />

magnet school in Houston. That<br />

kind of story makes me feel<br />

very good.” the <strong>Lamp</strong><br />

<strong>The</strong> sky is the limit<br />

Bernard Harris is a medical<br />

doctor who trains like an athlete,<br />

thinks like a businessman<br />

and radiates the confidence<br />

of someone who has flown<br />

in space. He’s also head of<br />

what is now the <strong>ExxonMobil</strong><br />

Bernard Harris Summer<br />

Bernard A. Harris Jr., M.D. Science Camp program.<br />

Harris retired from the U.S.<br />

space program in 1996 as a veteran of two shuttle missions<br />

and a historic walk in space. Today his Houston-based venturecapital<br />

firm invests in companies that specialize in telemedicine.<br />

With a staff that schedules his appointments by the minute,<br />

Harris still found time to visit 20 of the 25 science camps held<br />

in 2008, easily spending more time traveling than when he<br />

logged more than 7 million miles in space.<br />

“I’ve been an active person and a multitasker all my life,”<br />

Harris says. “It helps when you are passionate about what you<br />

are doing. If we do our job right on the venture-capital side, a<br />

company takes off. When we do our job right with a kid, the<br />

kid takes off. After that, the sky is the limit.”<br />

To learn more<br />

exxonmobil.com/<br />

mathandscience<br />

18


Taking a different track<br />

19<br />

Story by Bill Corporon Photography by Ed Lallo<br />

“I had a lot of good bosses during<br />

my career,” says Edward E.<br />

Whitacre Jr. “Why they kept promoting<br />

me was a mystery, but I<br />

guess they saw something.”<br />

What his supervisors saw in<br />

Whitacre, <strong>ExxonMobil</strong>’s newest<br />

board member, were talent,<br />

leadership and persistence.<br />

Whitacre is a native of Ennis,<br />

Texas, a town of about 20,000<br />

that lies some 40 miles south of<br />

Dallas.<br />

“It was a typical small town<br />

when I was growing up,”<br />

Whitacre says. “<strong>The</strong>re was<br />

one school, everyone knew<br />

each other, and life revolved<br />

around the railroad. People just<br />

assumed that when they finished<br />

high school, they’d go to<br />

work for the Southern Pacific.”<br />

Whitacre’s parents had higher<br />

expectations for their son.<br />

“My father was a locomotive<br />

engineer for 50 years,” he says.<br />

“He never finished high school.<br />

He told me he did not want me<br />

working for the railroad. Both my<br />

parents were insistent that I get<br />

a college degree.”<br />

Whitacre enrolled at Texas<br />

Tech University in Lubbock<br />

and graduated with a degree<br />

in industrial engineering. “I<br />

picked Tech because it had a<br />

Born and raised in a railroad<br />

town, <strong>ExxonMobil</strong>’s newest<br />

director rose to the top of<br />

one of America’s premier<br />

communications companies.<br />

good engineering school, I liked<br />

Lubbock, and the tuition was<br />

only $75,” he says.<br />

Rising through the ranks<br />

In 1963, Whitacre went to work<br />

for Southwestern Bell Telephone<br />

Company as a facility engineer.<br />

His job was to “make sure the<br />

equipment was in place to serve<br />

the customer, whether the customer<br />

was a house, an apartment<br />

or an office building.”<br />

He moved on to a series<br />

of positions in the company’s<br />

operational departments in<br />

Texas, Arkansas and Kansas. He<br />

headed the company’s Kansas<br />

division for three years before<br />

moving on to corporate headquarters<br />

in St. Louis.<br />

“We moved 19 times,” he<br />

says. “That’s why traveling is not<br />

high on my retirement to-do list.”<br />

Whitacre held a number of key<br />

leadership positions, including<br />

group president, vice president of<br />

revenues and public affairs, vice<br />

chairman and chief financial officer,<br />

and president and chief operating<br />

officer. He became chairman and<br />

chief executive officer in 1990.<br />

In 1995, Southwestern Bell<br />

became SBC Communications.<br />

In succeeding years, it acquired<br />

three of the seven “Baby Bells”<br />

that emerged from the breakup<br />

of AT&T in 1984. <strong>The</strong> longdistance<br />

service resulting from<br />

the split was called AT&T. SBC<br />

acquired that company in 2005,<br />

then took the AT&T name for the<br />

entire organization.<br />

With the name change,<br />

Whitacre became chairman and<br />

CEO of AT&T, the nation’s largest<br />

provider of wireless, broadband<br />

and traditional phone services.<br />

Whitacre retired in 2007<br />

after a 44-year career and 17<br />

years at the helm of AT&T and<br />

its predecessor companies. At<br />

the time, the Associated Press


described him as “an outspoken<br />

Texan known for blunt remarks<br />

on industry topics.”<br />

“That’s a bit of an exaggeration,”<br />

says Whitacre, “but you do<br />

have to let people know what<br />

you’re thinking.”<br />

Family and community<br />

Whitacre and his wife, Linda,<br />

make their home in San Antonio,<br />

Texas. <strong>The</strong>y have two daughters<br />

– one is a lawyer in Dallas,<br />

the other an elementary school<br />

teacher in San Antonio – and<br />

four grandchildren.<br />

Whitacre is a member of the<br />

Boy Scouts Advisory Council<br />

and a trustee on the Advisory<br />

Board of the San Antonio United<br />

Way group. He’s a member of<br />

the Business Council and serves<br />

on the boards of the Institute<br />

for International Economics,<br />

Anheuser-Busch Companies<br />

and Burlington Northern Santa<br />

Fe Corporation.<br />

Whitacre has chaired the<br />

Texas Tech board of regents and<br />

counts himself a loyal alumnus.<br />

“I still have pretty close ties<br />

there,” he says.<br />

To relax, Whitacre turns to<br />

golf. He also reads several<br />

newspapers each day and usually<br />

has a book nearby.<br />

He enjoys hunting and fishing.<br />

<strong>The</strong> hunting trips include<br />

his chocolate Labrador retriever,<br />

Lucille, who “loves to hunt and<br />

take naps.”<br />

Coming to <strong>ExxonMobil</strong><br />

Whitacre says that while his<br />

knowledge of the petroleum<br />

industry is limited, he feels he<br />

brings some useful experience<br />

to the job of director.<br />

“I believe I understand what<br />

makes big organizations tick,”<br />

he says. “<strong>ExxonMobil</strong> is a huge<br />

company, and that parallels my<br />

own corporate experience.”<br />

Whitacre describes <strong>ExxonMobil</strong><br />

as a “very disciplined company.”<br />

“<strong>The</strong>y’re engineering-oriented<br />

and very careful about capital<br />

investment. <strong>The</strong>y have a very<br />

thoughtful planning process, and<br />

they execute their plans well.”<br />

Whitacre is especially impressed<br />

by the <strong>ExxonMobil</strong> culture.<br />

“People are proud of their<br />

company,” he says, “and you<br />

won’t find that everywhere. <strong>The</strong><br />

company treats its employees very<br />

well, and that pays off.” the <strong>Lamp</strong><br />

20


21<br />

Innovative technology<br />

could commercialize<br />

challenging gas resources<br />

Story by Kevin Gault Photography by Janice Rubin<br />

Process may make carbon capture and<br />

storage more affordable while significantly<br />

reducing greenhouse gas emissions.<br />

Brilliant ideas sometimes strike<br />

the mind with the force of a<br />

lightning bolt. But the idea that<br />

an <strong>ExxonMobil</strong> scientist had for<br />

a revolutionary natural-gas processing<br />

technology drifted into<br />

his thoughts like gently falling<br />

snowflakes.<br />

Reminiscing about his college<br />

days at the Massachusetts<br />

Institute of Technology during a<br />

wintertime walk by the Charles<br />

River, Jaime Valencia recalls, “In<br />

the coldest winters in Boston,<br />

there were times when the river<br />

would freeze completely and<br />

snow would accumulate on top<br />

Simplified CFZ process<br />

Production<br />

wells<br />

Refrigerant<br />

lowers temperature<br />

to about -50°F<br />

Inlet dehydration<br />

and refrigeration<br />

Gas from fields<br />

Methane / CO 2 / H 2 S<br />

Feed gas<br />

of it. More often though, the<br />

river was only partially frozen,<br />

and the snow that landed on the<br />

water simply melted and flowed<br />

downstream. That observation<br />

became a key element in the<br />

development of a novel idea<br />

Robby Denton [co-inventor of<br />

the technology] and I were pursuing,”<br />

says Valencia, gas and<br />

facilities technology division,<br />

<strong>ExxonMobil</strong> Upstream Research<br />

Company.<br />

<strong>The</strong> idea led to the CFZ technology<br />

that is being brought<br />

to commercial readiness at a<br />

new demonstration plant near<br />

Conventional<br />

distillation<br />

CFZ section<br />

Conventional<br />

distillation<br />

Liquid CO 2 and H 2 S<br />

CO 2 and other<br />

gases sequestered<br />

and injected into<br />

dedicated wells<br />

LaBarge, Wyoming, beginning<br />

next year.<br />

Simpler process,<br />

lower costs<br />

“<strong>The</strong> idea of snow falling into a<br />

flowing river helped crystallize the<br />

design of the CFZ process for<br />

Robby and me,” Valencia says.<br />

“<strong>The</strong> technology simplifies the<br />

process for separating carbon<br />

dioxide [CO 2 ] and other impurities<br />

from natural gas, lowering costs.<br />

Just as important, it facilitates<br />

carbon capture and storage.”<br />

“Today we have a large<br />

resource base, which includes<br />

Methane<br />

to sales<br />

Injection<br />

wells<br />

Compared to current<br />

technologies, the<br />

CFZ process saves<br />

money onshore by<br />

reducing equipment,<br />

such as vessels<br />

and pumps, and for<br />

offshore applications<br />

by additionally<br />

reducing space,<br />

weight and size of<br />

platforms or ships.<br />

Illustration by Pat Gabriel


some challenging gas reservoirs<br />

where CFZ technology could be<br />

used,” says Randy Howard, project<br />

executive, CFZ commercialization,<br />

<strong>ExxonMobil</strong> Development<br />

Company. “As much as one-third<br />

of world gas reserves have a<br />

high level of CO 2 . If CFZ is commercialized,<br />

it could help us bring<br />

important new energy supplies to<br />

consumers.”<br />

This is possible because the<br />

CFZ technology reduces capital<br />

costs, as the process involves<br />

fewer steps and less equipment.<br />

For offshore applications, this<br />

also means less size and weight.<br />

<strong>The</strong> innovative, single-step<br />

separation process, invented<br />

and patented by <strong>ExxonMobil</strong> in<br />

the 1980s, was proven at a pilot<br />

plant in Texas, and has now led<br />

to the May 2008 announcement<br />

by <strong>ExxonMobil</strong> that it has committed<br />

more than $100 million to<br />

build a commercial demonstration<br />

plant near LaBarge. <strong>The</strong><br />

plant, located at the company’s<br />

Shute Creek Treating Facility, will<br />

advance CFZ to the commercialapplication<br />

stage.<br />

“<strong>The</strong> goal of the plant is to<br />

demonstrate that we can meet<br />

or exceed the specifications for<br />

sales gas over a wide range of<br />

field compositions, while captur-<br />

Part of the CFZ technology team (from left): Jaime Valencia,<br />

Jeff Daly, Beverly Mentzer, Kay Ogundeyi and Randy Howard.<br />

ing design data that will allow<br />

us to scale CFZ facilities up to<br />

world-class-size applications,”<br />

Howard says. “As is customary<br />

at <strong>ExxonMobil</strong>, the first priority<br />

will be the safety of all the people<br />

involved, from plant design<br />

through operation.”<br />

Construction of the plant<br />

began this summer, and startup<br />

is scheduled for late 2009. <strong>The</strong><br />

testing of CFZ will take place<br />

over a one- to two-year period.<br />

During that time, the plant will<br />

process about 14 million cubic<br />

feet of gas per day of various<br />

gas compositions to confirm<br />

how the CFZ technology will<br />

work on the world’s challenging<br />

gas resources.<br />

Over the last several years,<br />

various patented improvements<br />

to the process were developed<br />

by the original inventors as well<br />

as by company researchers Don<br />

Victory and Gene Thomas, both<br />

of whom played key roles in the<br />

pilot plant project.<br />

Business and<br />

environmental benefits<br />

CFZ lowers the cost of carbon<br />

capture and storage because<br />

the process separates CO 2 ,<br />

and other contaminants, as a<br />

high-pressure liquid stream that<br />

22


23<br />

A look at the technology<br />

Typically, the natural-gas industry uses<br />

distillation processes to separate hydrocarbon<br />

natural-gas components such as<br />

methane, ethane, propane and butane.<br />

In doing so, very cold temperatures are<br />

used to condition the gas for sale. If<br />

appreciable amounts of carbon dioxide<br />

(CO 2 ) are present it will freeze, forming<br />

solids inside a processing tower which<br />

normally handles only liquids and gases.<br />

Existing commercial technologies<br />

avoid the troublesome solidification of<br />

CO 2 by using entirely different separation<br />

processes that involve multiple steps.<br />

<strong>The</strong>y also require chemical agents that<br />

must be subsequently recovered. <strong>The</strong>se<br />

alternate technologies primarily are aimed<br />

at removing low impurity levels of contaminants,<br />

and the processing costs rise<br />

considerably when high concentrations<br />

of undesirable components are present.<br />

<strong>The</strong> CFZ demonstration plant is designed to process 14 million<br />

cubic feet of natural gas per day – some 25 times the capacity of<br />

the original pilot plant built in the 1980s in Texas. A world-scale<br />

commercial facility could process about 1 billion cubic feet per<br />

day, some 70 times that of the demonstration unit.<br />

For example, some of the most challenging<br />

natural-gas fields in the world have a<br />

hydrocarbon content of only 20 to 40 percent,<br />

with the rest being contaminants.<br />

Rather than avoiding the solidification<br />

of CO 2 , Valencia and Denton’s concept<br />

involved the freezing and remelting of<br />

CO 2 under carefully controlled conditions<br />

in a specially designed section of a<br />

conventional distillation tower. That section,<br />

an open chamber with an “unfrozen<br />

flowing river” at its bottom, came to be<br />

known as the controlled freeze zone. Not<br />

only did it allow the single-step separation<br />

of CO 2 from methane, but it provided<br />

the added benefit of discharging CO 2 as<br />

a liquid, which could then be pumped<br />

and injected underground, making carbon<br />

capture and storage more efficient<br />

and affordable in reducing greenhousegas<br />

emissions.<br />

can be reinjected underground.<br />

Conventional processes require<br />

expensive recompression of the<br />

CO2 for reinjection. <strong>The</strong> CFZ<br />

technology has additional benefits:<br />

there’s no need to use<br />

chemical agents in the process,<br />

and it also eliminates sulfur production<br />

from hydrogen sulfide<br />

often found in gas streams.<br />

An extensive team of scientists,<br />

engineers and designers from<br />

three <strong>ExxonMobil</strong> companies and<br />

the engineering and construction<br />

contractor, URS, is working<br />

on the project. <strong>The</strong> team is led<br />

by Jeff Daly, CFZ commercial<br />

demonstration plant project manager,<br />

<strong>ExxonMobil</strong> Development<br />

Company, in close cooperation<br />

with Tim Mullen, Shute Creek<br />

Treating Facility senior plant<br />

superintendent, <strong>ExxonMobil</strong><br />

Production Company.<br />

<strong>ExxonMobil</strong> has researched<br />

and developed carbon-management<br />

technologies for more<br />

than 30 years. In addition to its<br />

research programs, the company<br />

has supported carbon-capture<br />

and storage research conducted<br />

by the International Energy<br />

Agency, MIT,<br />

Georgia Tech To learn more<br />

University, the exxonmobil.com/cfz<br />

University of<br />

Texas and Stanford University.<br />

<strong>The</strong> CFZ technology could<br />

bring additional needed energy<br />

supplies to world markets<br />

from challenging natural-gas<br />

resources while benefiting the<br />

environment. Its genesis was<br />

more than two decades ago<br />

when an innovative <strong>ExxonMobil</strong><br />

scientist recalled snowflakes falling<br />

onto a river. the <strong>Lamp</strong>


Helping protect tomorrow,<br />

Imagine an automotive tire made<br />

with a new lightweight impermeable<br />

material that could potentially help<br />

save more than a billion gallons of<br />

fuel every year, the equivalent of<br />

taking a million cars off U.S. roads.<br />

Imagine a new lighter, thinner<br />

plastic used to shrink-wrap shipping<br />

pallets, cover greenhouses<br />

and produce heavy-duty bags.<br />

And imagine manufacturing it<br />

using fewer resources than existing<br />

materials and saving enough<br />

energy to power more than<br />

900,000 U.S. homes.<br />

Imagine a new film technology for<br />

lithium-ion batteries that could help<br />

usher in a new generation of hybrid<br />

and electric vehicles.<br />

Chemicals make all this happen.<br />

<strong>The</strong>y enable many forms of energy<br />

savings and foster a higher standard<br />

of living. Because every society<br />

wants the benefits that chemical<br />

products can deliver, demand<br />

is increasing, and chemical companies<br />

understand they have a<br />

responsibility to present and future<br />

generations.<br />

<strong>ExxonMobil</strong> Chemical is committed<br />

to the principles of sustainable<br />

development, which is defined as<br />

meeting the needs of the present<br />

without compromising the ability<br />

of future generations to meet their<br />

own needs. It balances economic<br />

growth, social development and<br />

environmental protection. That balance<br />

is reflected in how <strong>ExxonMobil</strong><br />

Chemical operates its business and<br />

promotes its products.<br />

Key to turning these principles<br />

<strong>ExxonMobil</strong> Chemical Company’s sustainability<br />

efforts are found on the road and in the stores.<br />

into action is the company’s application<br />

of efficiency improvements<br />

and technology advances throughout<br />

its operations and product<br />

offerings. For example, last year<br />

<strong>ExxonMobil</strong> spent more than $1 billion<br />

in research, development and<br />

technology applications to improve<br />

manufacturing processes, lower<br />

energy use and emissions, increase<br />

product yields, and develop new<br />

and better products for customers.<br />

“<strong>The</strong> demand for chemicals is<br />

expected to continue to grow,”<br />

says Bob Davis, vice president<br />

of technology for <strong>ExxonMobil</strong><br />

Chemical. “As demand grows, we<br />

keep improving the technology to<br />

process different feedstocks, to<br />

reduce energy consumption and<br />

emissions, and to increase product<br />

output.”<br />

During the last five years, the<br />

energy consumed per unit of output<br />

across <strong>ExxonMobil</strong> Chemical<br />

has decreased by approximately<br />

10 percent.<br />

Sustainability from<br />

greenhouses to stores<br />

“Consumers are demanding<br />

products packaged in a way that<br />

is environmentally responsible<br />

without sacrificing strength and<br />

durability,” says Dave McConville,<br />

polyethylene global market development<br />

manager. “<strong>ExxonMobil</strong><br />

Chemical provides the raw materials<br />

to meet this demand with innovative<br />

products and technologies<br />

that are leading to thinner films for<br />

everything from food packaging to<br />

greenhouse covers to heavy-duty<br />

fertilizer bags.”<br />

today<br />

A typical light vehicle<br />

(above) contains more<br />

than $2,000 worth of<br />

chemical products that<br />

help improve fuel economy<br />

and performance.<br />

<strong>ExxonMobil</strong> Chemical<br />

provides the raw materials<br />

that make food packaging<br />

(right, below) strong and<br />

durable while sealing in<br />

freshness for a wide range<br />

of everyday products.<br />

Story by Amanda Coyne Photography by Ed Lallo<br />

24


Tom Upton, global manager, product<br />

research, studies a polymer sample in<br />

his Baytown, Texas, laboratory.<br />

<strong>ExxonMobil</strong> Chemical’s new<br />

Enable Mpe products are recyclable<br />

and help make strong but<br />

significantly thinner films that<br />

use fewer raw materials and<br />

less energy than conventional<br />

films. Energy efficiencies are<br />

seen across the entire life cycle,<br />

from manufacturing, to product<br />

transportation, to prolonged<br />

shelf life and finally to recycle<br />

and disposal.<br />

“<strong>The</strong>se new products reduce<br />

the amount of film needed by<br />

about 20 percent, improve film<br />

performance and, at the same<br />

time, reduce energy consumption<br />

because they can be processed<br />

at lower temperatures,”<br />

says Margaret Mattix, global<br />

marketing vice president. “In<br />

fact, these products can have<br />

significant greenhouse-gas<br />

reductions, equivalent to sav-<br />

25<br />

ing enough energy to power<br />

900,000 homes.”<br />

<strong>ExxonMobil</strong> products are also<br />

used to keep people warm.<br />

Many believe that cotton is a<br />

better choice for fabric because<br />

it’s a natural fiber and renewable;<br />

however, cotton requires large<br />

amounts of water compared to<br />

other crops such as rice, wheat<br />

and corn. Cotton’s supply growth<br />

will be challenged by competition<br />

for land and water as world population<br />

increases and economies<br />

continue to develop.<br />

Polyester production uses<br />

only about 0.1 percent of the<br />

water used to grow cotton. Not<br />

only is it more sustainable, but<br />

it is preferred by the consumer.<br />

“Polyester has become a popular<br />

choice over cotton because<br />

of its lower cost and superior<br />

performance,” says T.J. Wojnar,<br />

senior vice president for Basic<br />

Chemicals, Intermediates and<br />

Synthetics. “<strong>The</strong> developing<br />

world – notably China, where<br />

demand for consumer goods<br />

is growing – has shown a clear<br />

preference for clothing made<br />

from polyester, thanks to its lower<br />

cost and wide range of product<br />

choices.”<br />

<strong>ExxonMobil</strong> Chemical has<br />

recently developed a proprietary<br />

catalyst to improve the<br />

overall manufacturing process<br />

for polyester, making it more<br />

efficient and cost effective. <strong>The</strong><br />

innovation, now being licensed<br />

by <strong>ExxonMobil</strong> under the name<br />

PxMax, significantly lowers the<br />

cost of producing xylene, the<br />

primary ingredient to manufacture<br />

polyester. <strong>The</strong> process<br />

also generates less waste and<br />

requires less energy than previ-<br />

ous methods, which, in turn,<br />

lowers CO 2 emissions from the<br />

eight <strong>ExxonMobil</strong> and licensee<br />

plants where PxMax technology<br />

is being used.<br />

From the auto world<br />

One of the company’s most<br />

exciting new technologies is in<br />

the design of the battery separator<br />

film within lithium-ion batteries<br />

for hybrid and electric vehicles.<br />

“<strong>The</strong> challenge given to us by our<br />

customers was clear – enhance<br />

battery performance by improving<br />

safety, reliability and power<br />

density,” says Jim Harris, senior<br />

vice president of Polymers. “We<br />

responded with an innovative<br />

polymer film that combines our<br />

advanced manufacturing process<br />

with our proprietary polymer<br />

technology.” Powering hybrid and<br />

electric vehicles with lithium-ion


atteries will improve energy<br />

efficiency and reduce emissions.<br />

“We have committed some of our<br />

brightest minds to help make the<br />

next generation of lower-emission,<br />

fuel-efficient vehicles a reality,”<br />

says Harris.<br />

Another innovation for<br />

<strong>ExxonMobil</strong> Chemical is a new<br />

blend of synthetic rubber and<br />

nylon that enables tires to retain<br />

air pressure longer. This superior<br />

air retention technology makes<br />

tire innerliners as thin and light as<br />

a plastic bag – about 80 percent<br />

lighter than traditional innerliners<br />

but with superior air retention.<br />

According to the U.S. Depart-<br />

ment of Energy, American drivers<br />

waste more than a billion gallons<br />

of gasoline every year just from<br />

underinflated tires. “This breakthrough<br />

not only means that tires<br />

stay properly inflated longer but<br />

also makes them lighter, which<br />

has significant potential to reduce<br />

vehicle fuel use,” Harris says.<br />

<strong>The</strong> average light vehicle produced<br />

in the United States contains<br />

more than $2,000 worth of<br />

chemical products. A large and<br />

growing portion of that chemistry<br />

is in plastic and composite components,<br />

mostly replacing steel.<br />

<strong>ExxonMobil</strong> Chemical works<br />

closely with leading automakers<br />

and suppliers worldwide to help<br />

reduce the weight of today’s<br />

automobiles. This improves<br />

fuel efficiency, and helps lower<br />

greenhouse-gas emissions and<br />

manufacturing costs.<br />

Product life cycles<br />

In its chemical operations, <strong>ExxonMobil</strong> applies a sciencebased<br />

approach to its sustainability efforts. One tool the<br />

company promotes is called Life Cycle Assessment. As<br />

opposed to looking at one aspect of a chemical’s use,<br />

this method follows a product from raw material extraction<br />

and manufacturing through distribution, recycling and<br />

disposal. It measures the total energy and other resources<br />

consumed by a product, while analyzing the emissions<br />

and waste generated.<br />

“<strong>The</strong> chemicals business is all about transforming<br />

hydrocarbon molecules to improve the quality of<br />

our lives,” says Steve Pryor, president of <strong>ExxonMobil</strong><br />

Chemical Company. “<strong>The</strong> chemical industry makes everyday<br />

life better by providing raw materials for more than<br />

70,000 products that help keep us safe, healthy, warm,<br />

cool, on time, in motion and connected.”<br />

Pryor says, “<strong>The</strong> value to society is measured not only<br />

by the performance of our products, but also by the<br />

environmental footprint associated with their manufacture<br />

and use. At <strong>ExxonMobil</strong>, we are committed to reducing<br />

our environmental footprint through increasing our own<br />

energy efficiency, advancing current technologies and<br />

developing breakthrough technologies. We also help<br />

manufacture many products that play a fundamental role<br />

in ensuring that society is more energy-efficient and environmentally<br />

responsible.”<br />

Andy Winesett, senior physicist, tests the tensile strength of a polymer<br />

sample. <strong>The</strong> rate at which it stretches and the force required to<br />

break it are important measures of polymer performance.<br />

“Today’s plastics have reduced<br />

the weight of the average automobile<br />

by about 10 percent,<br />

and the Department of Energy<br />

estimates this weight reduction<br />

leads to about a 6.6 percent<br />

improvement in fuel economy,”<br />

says Harris. “<strong>The</strong> lightweighting<br />

features of our products enable<br />

auto manufacturers to improve<br />

a car’s performance while maintaining<br />

affordability and reducing<br />

fuel consumption.”<br />

Sustainability from within<br />

Energy efficiency, a key pillar of<br />

the Chemical Company’s sustainability<br />

efforts, is core to the company’s<br />

operations. For example,<br />

the company’s cogeneration<br />

plants, operating at more than 30<br />

<strong>ExxonMobil</strong> sites throughout the<br />

world, generate enough energy<br />

to power more than 2 million<br />

households and provide a significant<br />

greenhouse-gas reduction.<br />

Another example of efficiency<br />

contribution can be found at<br />

<strong>ExxonMobil</strong> Chemical’s Baton<br />

Rouge plant. More than 60<br />

years ago, the company began<br />

operating the world’s first steam<br />

cracker there. Many regard<br />

steam cracking as the engine<br />

of most chemical complexes.<br />

Today, that same unit consumes<br />

less than half the energy per ton<br />

of olefin produced than it did<br />

when it started up in 1941.<br />

“Our product innovations<br />

and internal efficiencies, applied<br />

throughout the company, lead<br />

to better products, less energy<br />

usage and reduced environmental<br />

impact,” says <strong>ExxonMobil</strong><br />

Chemical Company President<br />

Steve Pryor.<br />

“<strong>The</strong>se<br />

efforts demonstrate<br />

our<br />

To learn more<br />

exxonmobilchemical.com/<br />

sustainability<br />

ability to not only provide better<br />

products for our customers, but<br />

also enable <strong>ExxonMobil</strong> to operate<br />

more efficiently over the long<br />

term.” the <strong>Lamp</strong><br />

26


Panorama<br />

27<br />

Around the world with <strong>ExxonMobil</strong> Torrance refinery adds massive clean-air facilities<br />

New <strong>ExxonMobil</strong> MasterCard<br />

features unlimited gasoline rebates<br />

<strong>ExxonMobil</strong> and Citi Cards have launched a new <strong>ExxonMobil</strong><br />

MasterCard that offers rebates on gasoline purchased at<br />

U.S. Exxon and Mobil retail locations.<br />

Cardholders<br />

earn rebates of 15<br />

cents per gallon,<br />

and there is no limit<br />

on the amount of<br />

rebates that can be<br />

earned. However,<br />

those opening a<br />

new <strong>ExxonMobil</strong><br />

MasterCard account<br />

during the promotion period that ends December 31, 2008,<br />

will earn rebates of 30 cents per gallon for the first 60 days.<br />

“Most cards offer percentage rebates off the total price,”<br />

says Ben Soraci, <strong>ExxonMobil</strong> U.S. Retail Sales director. “Our<br />

card has the competitive advantage of offering a cents-pergallon<br />

rebate that allows consumers to easily calculate their<br />

savings.”<br />

In addition, <strong>ExxonMobil</strong> MasterCard customers earn<br />

annual rebates of up to 2 percent on the first $10,000 in<br />

other eligible purchases and a 1 percent rebate on other<br />

eligible purchases of more than $10,000.<br />

<strong>The</strong> rebates will be automatically credited on monthly<br />

cardholder statements in $10 increments toward future<br />

Exxon and Mobil gasoline purchases made with the card.<br />

Other card features include:<br />

No annual fee<br />

0 percent APR on purchases, plus no-interest balance<br />

transfers for the first six months<br />

Ability to link to Speedpass<br />

For more information, visit exxonmobilcard.com.<br />

One of the largest single environmental<br />

upgrades in the<br />

79-year history of <strong>ExxonMobil</strong>’s<br />

refinery in Torrance, California, is<br />

nearing completion.<br />

<strong>The</strong> project involves installation<br />

of two electrostatic precipitators<br />

(ESPs) at the refinery’s fluid catalytic-cracking<br />

plant. Estimated<br />

to cost more than $300 million,<br />

the ESPs will put the refinery in<br />

compliance with a new statemandated<br />

clean-air regulation<br />

requiring substantial cuts in<br />

particulate-matter emissions.<br />

About the size of a 12-story<br />

building, each ESP was assembled<br />

at a remote site within the<br />

refinery. <strong>The</strong> project elected to<br />

follow unconventional modular<br />

construction due to facility congestion<br />

around the cat cracker.<br />

“We determined we did<br />

not have adequate space to<br />

safely follow a standard ‘stickbuild’<br />

approach,” says Donald<br />

Runaldue, ESP project executive.<br />

“Instead, we elected to prefabricate<br />

at a safer location inside the<br />

refinery, then lift each module and<br />

transport it to the cat cracker for<br />

installation.”<br />

Rob Sturgis, ESP senior project<br />

manager, adds that the module<br />

approach allowed the project<br />

to install piling, foundations and<br />

structural steel in parallel with ESP<br />

assembly, shortening the construction<br />

span significantly. “This<br />

was particularly helpful since we<br />

were faced with a very tight construction<br />

schedule,” says Sturgis.<br />

Gene Weber, ESP technical<br />

manager, notes the dimensions<br />

of the ESPs and various components<br />

are impressive.<br />

“<strong>The</strong> ESP-1 module weighed<br />

1,200 tons, while the fully<br />

assembled ESP-2 weighed<br />

almost 1,600 tons,” says Weber.<br />

“Fully erected, the completed<br />

units measure 125 feet tall, 174<br />

feet long and 85 feet wide. One<br />

bypass duct has a diameter of<br />

13 feet – wide enough to drive a<br />

car through. Some of the major<br />

valves have diameters of 11 feet<br />

or more.”<br />

Startup is planned for January<br />

2009.<br />

<strong>The</strong> huge ESP-1 (above and left) shown being moved to its<br />

installation site inside the Torrance Refinery stood 12 stories<br />

tall and had a transport weight of 1,200 tons.


Pictured are (top row, from left) Hugh Helferty, EMRE<br />

Products Research and Technology manager who accepted<br />

the American Chemistry Society award on behalf of the<br />

company, and honorees Ernie Lewis, Stephen McCarthy<br />

and Kenneth Lloyd Riley, and (bottom row, from left) Michael<br />

Kerby, Sabato Miseo and Stuart Soled.<br />

EMRE scientists named<br />

2008 Heroes of Chemistry<br />

<strong>The</strong> American Chemical Society has recognized six<br />

<strong>ExxonMobil</strong> Research and Engineering Company<br />

(EMRE) scientists as its 2008 Heroes of Chemistry<br />

for their work in producing cleaner diesel fuel.<br />

<strong>The</strong> honorees are Michael Kerby, Ernie Lewis,<br />

Stephen McCarthy, Sabato Miseo, Kenneth Lloyd<br />

Riley and Stuart Soled.<br />

In collaboration with Albemarle Corporation, the<br />

EMRE scientists developed and commercialized the<br />

Nebula catalyst that significantly lowers sulfur content<br />

in diesel fuel. <strong>The</strong> cleaner-burning fuel enables<br />

advanced vehicle-emissions systems for reduced<br />

emissions and improved air quality. <strong>The</strong> scientists<br />

were honored at the 236th National Meeting of the<br />

American Chemical Society, the world’s largest scientific<br />

society.<br />

“Heroes of Chemistry strives for greater recognition<br />

of scientists like these who, like chemistry itself, often<br />

wear a cloak of invisibility so far as public awareness<br />

is concerned,” said Bruce E. Bursten, president of<br />

the American Chemical Society and dean of the<br />

College of Arts and Sciences at the University of<br />

Tennessee, Knoxville. “<strong>The</strong>ir dedication and scientific<br />

contributions save lives and make life healthier and<br />

happier for billions of people around the world.”<br />

Western Colorado gift supports regional<br />

air-ambulance expansion<br />

A project to expand a critical-care<br />

transport program serving western<br />

Colorado and eastern Utah has<br />

received a $500,000 boost from<br />

<strong>ExxonMobil</strong>.<br />

<strong>The</strong> contribution will support the<br />

Century Project at St. Mary’s Hospital<br />

and Regional Medical Center in<br />

Grand Junction, Colorado. <strong>The</strong> project<br />

will expand the capabilities of the<br />

CareFlight program, including moving<br />

its landing pad, hangar, fueling system<br />

and crew quarters to the rooftop<br />

of a new 12-story patient-care addition.<br />

An elevator will deliver patients,<br />

personnel and equipment from the<br />

rooftop directly to new state-of-the-art<br />

trauma and surgical services below.<br />

“<strong>ExxonMobil</strong> is pleased to support<br />

the Century Project and the<br />

significant enhancements it provides<br />

for CareFlight’s air-ambulance service,”<br />

says James Branch, project<br />

executive of <strong>ExxonMobil</strong>’s Piceance<br />

Project. “CareFlight is a vital resource<br />

Joel Schaefer, St. Mary’s trauma program medical director,<br />

and CareFlight crew members accept an <strong>ExxonMobil</strong> contribution<br />

of $500,000 from James Branch (third from left),<br />

project executive for <strong>ExxonMobil</strong>’s Piceance Project.<br />

for the residents of the West Slope<br />

of Colorado, and our contribution will<br />

help St. Mary’s Hospital continue to<br />

offer the highest quality medical care<br />

to the region.”<br />

<strong>The</strong> Piceance Project is developing<br />

natural gas reserves in western<br />

Colorado’s Piceance Basin. Phase 1<br />

production startup is expected in<br />

early 2009.<br />

<strong>The</strong> CareFlight program’s Bell 412<br />

EP twin-engine helicopter, capable of<br />

carrying four patients and four medical<br />

professionals, can access remote<br />

locations and varied terrains.<br />

“CareFlight is an integral part of our<br />

Level Two trauma center, which is the<br />

only major trauma center between<br />

Denver and Salt Lake City,” explains<br />

Joel Schaefer, medical director of the<br />

St. Mary’s trauma program. “Medical<br />

professionals can begin treating<br />

trauma victims on the scene and provide<br />

critical care during transport to<br />

St. Mary’s.”<br />

28


Panorama<br />

Historic LNG terminal installed offshore Italy<br />

<strong>The</strong> world’s first offshore liquefied<br />

natural gas (LNG) terminal<br />

has been installed off the northeast<br />

coast of Italy.<br />

<strong>The</strong> Adriatic LNG terminal is<br />

designed to store and regasify<br />

LNG to deliver 775 million<br />

cubic feet of natural gas a day<br />

when it reaches full operational<br />

capacity in 2009. It will be<br />

capable of supplying about<br />

10 percent of Italy’s natural<br />

gas requirements.<br />

Built in Algeciras, Spain,<br />

the terminal was towed some<br />

1,700 miles to its final destination<br />

about 10 miles offshore<br />

Porto Levante, Italy, in the<br />

Adriatic Sea. <strong>The</strong> tow began<br />

August 30 and was completed<br />

29<br />

<strong>The</strong> gravity-based Adriatic LNG terminal was<br />

towed some 1,700 miles from Spain to Italy.<br />

September 15.<br />

After its arrival, the gravitybased<br />

structure was lowered to<br />

the seabed in 95 feet of water.<br />

It will be connected by pipeline<br />

to Italy’s natural gas grid.<br />

<strong>The</strong> Adriatic LNG project<br />

operator is Terminale GNL<br />

Adriatico Srl – owned by<br />

<strong>ExxonMobil</strong> Italiana Gas 45<br />

percent, Qatar Terminal Limited<br />

(a Qatar Petroleum 100-percent<br />

owned subsidiary) 45 percent<br />

and Edison SpA 10 percent.<br />

LNG supplied by tanker to<br />

the terminal will be manufactured<br />

from natural gas produced<br />

from the North field in<br />

Qatar. <strong>The</strong> field has resources<br />

of more than 900 trillion cubic<br />

feet of natural gas, making it<br />

the largest nonassociated natural<br />

gas field in the world.<br />

“Italy represents just one of<br />

many nations around the world<br />

that Qatar now has the ability<br />

to deliver natural gas to in<br />

the form of LNG,” says Saad<br />

Al-Kaabi, director oil and gas<br />

ventures for Qatar Petroleum<br />

and chairman of Terminale GNL<br />

Adriatico. “Qatar Petroleum<br />

and <strong>ExxonMobil</strong>’s long-term<br />

partnership was able to successfully<br />

build this excellent<br />

facility through the application<br />

of industry-leading expertise<br />

and innovative technologies.”<br />

<strong>The</strong> <strong>Lamp</strong> is published for <strong>ExxonMobil</strong><br />

shareholders. Others may receive it on<br />

request. It is produced by the Public Affairs<br />

Department, Exxon Mobil Corporation.<br />

Exxon Mobil Corporation has numerous<br />

affiliates, many with names that include<br />

<strong>ExxonMobil</strong>, Exxon, Esso and Mobil. For<br />

convenience and simplicity in this publication,<br />

those terms and the terms corporation,<br />

company, our, we and its are sometimes<br />

used as abbreviated references to specific<br />

affiliates or affiliate groups. Similarly,<br />

<strong>ExxonMobil</strong> has business relationships<br />

with thousands of customers, suppliers,<br />

governments and others. For convenience<br />

and simplicity, words like venture, joint<br />

venture, partnership, co-venturer and partner<br />

are used to indicate business relationships<br />

involving common activities and interests,<br />

and those words may or may not indicate<br />

precise legal relationships.<br />

Trademark ownership: <strong>The</strong> terms Exxon,<br />

Mobil, PxMax, Enable Mpe, Speedpass<br />

and Taking on the world’s toughest<br />

energy challenges are trademarks, service<br />

marks or certification marks of Exxon<br />

Mobil Corporation or its affiliates. CFZ is a<br />

proprietary process name of Exxon Mobil<br />

Corporation or its affiliates. <strong>The</strong> following<br />

term is a trademark of the entity indicated:<br />

MasterCard is a registered trademark of<br />

MasterCard World.<br />

Forward-Looking Statements: Outlooks,<br />

projections, estimates, targets and business<br />

plans in this publication are forwardlooking<br />

statements. Actual future results,<br />

including demand growth and supply mix;<br />

<strong>ExxonMobil</strong>’s own production growth and<br />

mix; resource recoveries; project plans,<br />

timing, costs and capacities; capital<br />

expenditures; revenue enhancements and<br />

cost efficiencies; margins; and the impact<br />

of technology could differ materially due<br />

to a number of factors. <strong>The</strong>se include<br />

changes in long-term oil or gas prices<br />

or other market conditions affecting the<br />

oil, gas and petrochemical industries;<br />

reservoir performance; timely completion<br />

of development projects; war and other<br />

political or security disturbances; changes in<br />

law or government regulation; the outcome<br />

of commercial negotiations; the actions<br />

of competitors; unexpected technological<br />

developments; the occurrence and duration<br />

of economic recessions; unforeseen<br />

technical difficulties; and other factors<br />

discussed here and under the heading<br />

“Factors Affecting Future Results” in item 1<br />

of our most recent Form 10-K and on our<br />

Web site at exxonmobil.com.<br />

Frequently Used Terms: References to<br />

resources, the resource base, recoverable<br />

resources, barrels and similar terms include<br />

quantities of oil and gas that are not yet<br />

classified as proved reserves, but that we<br />

believe will likely be moved into the proved<br />

reserves category and produced in the future.<br />

Discussions of reserves in this publication<br />

generally exclude the effects of year-end<br />

price/cost revisions and include reserves<br />

attributable to equity companies and our<br />

Syncrude operations. For definitions of,<br />

and information regarding, reserves, return<br />

on average capital employed, normalized<br />

earnings and other terms that may be used in<br />

this publication, including information required<br />

by SEC Regulation G, see the “Frequently<br />

Used Terms” posted on our Web site. <strong>The</strong><br />

most recent Financial and Operating Review<br />

on our Web site also shows <strong>ExxonMobil</strong>’s net<br />

interest in specific projects.


Second-quarter earnings<br />

<strong>ExxonMobil</strong>’s record second-quarter net<br />

income was $11,680 million, with earnings<br />

per share up 21 percent from the<br />

second quarter of 2007. Record crude<br />

oil and natural gas realizations were<br />

partly offset by lower refining and chemical<br />

margins, lower production volumes<br />

and higher operating costs. Net income<br />

for the first half of 2008, also a record,<br />

was up 16 percent versus 2007.<br />

<strong>ExxonMobil</strong> spent $7 billion on<br />

capital and exploration projects in the<br />

second quarter and $12.5 billion for<br />

the first half of 2008.<br />

On an oil-equivalent basis, production<br />

decreased 8 percent from<br />

the 2007 second quarter. Excluding<br />

impacts related to the Venezuela<br />

expropriation, the Nigeria labor strike<br />

and lower entitlement volumes (which<br />

include price and spend impacts and<br />

production sharing contract net interest<br />

reductions), production was down<br />

about 3 percent.<br />

Upstream earnings were $10,012<br />

million, up $4,059 million from the second<br />

quarter of 2007 on record crude<br />

oil and natural gas realizations.<br />

Downstream earnings of $1,558<br />

million were down $1,835 million from<br />

the second quarter of 2007 as a result<br />

of significantly lower worldwide refining<br />

margins. Petroleum product sales of<br />

6,775 kbd were lower, reflecting asset<br />

sales and lower demand.<br />

Chemical earnings of $687 million<br />

were $326 million lower than the second<br />

quarter of 2007. Lower margins<br />

were partly offset by favorable foreign<br />

exchange and tax effects. Prime product<br />

sales of 6,718 kt (thousands of metric<br />

tons) in the second quarter of 2008<br />

were 179 kt lower than the prior year.<br />

During the second quarter, the<br />

corporation distributed a total of<br />

$10.1 billion to shareholders through<br />

dividends of $2.1 billion and share purchases<br />

to reduce shares outstanding<br />

of $8 billion.<br />

<strong>ExxonMobil</strong> quarterly financial summary<br />

Second Quarter First Half<br />

Millions of dollars, except per-share amounts 2008 2007 2008 2007<br />

Functional earnings<br />

Upstream $ 10,012 $ 5,953 $ 18,797 $ 11,994<br />

Downstream 1,558 3,393 2,724 5,305<br />

Chemical 687 1,013 1,715 2,249<br />

Corporate and financing (577) (99) (666) (8)<br />

Net income (U.S. GAAP) $ 11,680 $ 10,260 $ 22,570 $ 19,540<br />

Net income per common share<br />

– assuming dilution $ 2.22 $ 1.83 $ 4.25 $ 3.45<br />

Special items $ ($290) $ 0 $ ($290) $ 0<br />

Earnings excluding special items $ 11,970 $ 10,260 $ 22,860 $ 19,540<br />

Other financial data<br />

Total revenues and other income $ 138,072 $ 98,350 $ 254,926 $ 185,573<br />

Income and other taxes $ 32,361 $ 26,143 $ 61,702 $ 50,619<br />

Capital and exploration expenditures $ 6,970 $ 5,039 $ 12,461 $ 9,261<br />

Dividends on common stock $ 2,098 $ 1,961 $ 3,977 $ 3,786<br />

Dividends per common share $ 0.40 $ 0.35 $ 0.75 $ 0.67<br />

Thousands of barrels daily, except for natural gas and chemical<br />

Operating data<br />

Net production of crude oil and<br />

natural gas liquids 2,393 2,668 2,431 2,707<br />

Natural gas production available<br />

for sale (millions of cubic feet daily) 8,448 8,733 9,333 9,419<br />

Oil-equivalent production<br />

(6 million cubic feet = 1 thousand barrels) 3,801 4,123 3,986 4,277<br />

Refinery throughput 5,472 5,279 5,499 5,491<br />

Petroleum product sales 6,775 6,974 6,798 7,085<br />

Chemical prime product sales<br />

(thousands of metric tons) 6,718 6,897 13,296 13,702<br />

30


U.S. energy resources —<br />

part of the solution.<br />

One way to respond to high prices at the pump is to responsibly develop new energy supplies<br />

from a variety of different sources and locations — including right here in the United States.<br />

It is estimated that there is enough oil and natural gas offshore and in non-wilderness lands in<br />

the United States — but currently ruled off-limits for production by the federal government — to<br />

fuel 50 million cars and heat nearly 100 million homes for the next 25 years.<br />

To make these resources available for exploration and production, Congress must act.<br />

<strong>The</strong> energy industry has developed proven offshore technologies that can safely make<br />

huge resources available to consumers while protecting the environment.<br />

Some claim energy companies are letting lands they lease for oil and<br />

gas development “lay idle.” Not so. Our industry has every incentive —<br />

especially when prices are high — to explore and produce from the limited<br />

areas where we can lease today.<br />

If leased acreage is promising, <strong>ExxonMobil</strong> is actively producing or<br />

evaluating it. <strong>The</strong> problem is that industry does not have access to some of<br />

the most promising acreage, so we are attempting to find new supplies from<br />

the limited offerings of the last 10 years.<br />

Drilling is only part of the solution to the energy challenges Americans face. Improved<br />

efficiency and developing other economic energy sources will also be required.<br />

By pursuing an integrated set of solutions, Americans can achieve a prosperous, secure<br />

and responsible energy future.<br />

© 2008 by Exxon Mobil Corporation<br />

9 Printed on recycled paper<br />

exxonmobil.com

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