ExxonMobil Invests in Southeast Asia's Energy Needs as Third New Malaysian Project Comes Onstream

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Feb 5, 2002

Exxon Mobil Corporation (NYSE:XOM) announced today that oil production has commenced from the Larut field, the third new offshore Malaysia platform to come onstream in the past two months.

Production from the ExxonMobil-operated Larut field and the Satellite Fields Development (SFD) project, as well as the PETRONAS Carigali Sdn Bhd (PCSB)-operated Angsi facilities, will help maintain Malaysia's projected oil production requirements, and add to the country's ability to meet growing gas demand. Production from the three developments is expected to total more than 320 million barrels of oil and 1.5 trillion cubic feet of gas over the next 25 years. The total development costs for all three projects, including drilling costs, are estimated at US$1.7 billion.

Larut is the first field to be developed in block PM5, 125 miles offshore of Terengganu, Malaysia, in the South China Sea, and at its peak is expected to produce over 30,000 barrels of oil per day (kbd) and 35 million cubic feet of gas per day (mcfd). Expected peak production from the three new facilities is expected to total almost 140 kbd and 535 mcfd.

"ExxonMobil and Petroliam Nasional Berhad (PETRONAS), Malaysia's national oil company, have worked together to hold oil production levels steady by maximizing the output from existing fields and finding economic ways to develop the smaller, more technically challenging fields," said Mr. Terry Koonce, President, ExxonMobil Production Company.

He added that both Larut and SFD project had been considered economically marginal until the company developed innovative facility designs and project development plans that resulted in significant cost savings. "These types of developments are part of our commitment to use the company's technological expertise to extend the economic life of existing reserves by applying world-class practices and efficiencies."
One of the most satisfying aspects of the Larut development is that it was the safest project in ExxonMobil's history in Malaysia. Over 4.6 million workhours were completed over a four year period without a single employee or contractor Lost Time Injury. This is a remarkable achievement and a testimony to our focus on safety performance in all areas where the company operates.

ExxonMobil Exploration and Production Malaysia Inc. (EMEPMI), a subsidiary of Exxon Mobil Corporation, as operator, is developing Larut with co-venturer PCSB under a 50:50 Production Sharing Contract with PETRONAS. EMEPMI is also the operator for the SFD project, being developed on behalf of its joint venture with PCSB. Under the various Production Sharing Contracts, EMEPMI has a working interest of between 78 percent and 80 percent in the SFD fields, with the remaining interest being held by PCSB. Angsi, is being developed jointly by 50:50 co-venturers PCSB, as operator, and EMEPMI.

ExxonMobil is the largest oil producer in Malaysia, with current operated oil production of approximately 280 kbd, nearly 50 percent of the nation's total. ExxonMobil also produces 1.4 billion cubic feet per day of gas, which supplies around 70 percent of Peninsular Malaysia's gas requirements.

BACKGROUND ON NEW OFFSHORE MALAYSIA PROJECTS

LARUT
Operated by EMEPMI, Larut is an eight-legged steel jacket platform with a 36 well capacity. Oil and gas will flow from Larut into the existing Tapis oil and gas system via approximately 125 miles of new pipelines. The development requirements of the reservoir, and remoteness of the field, added a higher than usual complexity to its development.

To ensure the viability of this project, ExxonMobil worked closely with co-venturer PCSB to identify cost and schedule enhancements, including coordinated procurement of some of the Larut facilities with those of the Angsi development. The fabrication and installation of Larut was completed on schedule and within budget, despite tight design and construction deadlines.

ANGSI
Operated by PCSB, the Angsi complex is the largest integrated oil and gas facility in Malaysia, and was completed ahead of schedule and under budget. It consists of a central processing platform connected by a bridge to a 52 well drilling platform and a second satellite platform with a 32 well capacity. First production from the Angsi field, located 100 miles offshore of Terengganu, Malaysia in the South China Sea, was achieved on December 22, 2001.

Over 190 miles of pipelines were installed as part of the development of the Angsi complex, including connections to existing production facilities at Guntong D, Seligi A, Tapis and a new 105 mile-long pipeline to shore. Angsi serves as a new hub for transporting gas to shore, thereby enhancing supply reliability and security for Malaysia. An additional phase of development, to further maximize resource recovery in the Angsi field area, is currently under evaluation.

SATELLITE FIELDS DEVELOPMENT (SFD)
Operated by EMEPMI, Seligi H, the first of five platforms to be installed under the SFD project began production on December 11, 2001, ahead of schedule and under budget. This project, the first of its kind in Malaysia, represents a significant step forward in the development of small oil and gas fields. With smaller reserves, the new approach was the enabling factor in making production from these fields economic. By simultaneously constructing these satellite platforms, sequentially installing them, and then using the same drilling rig, the company was able to capitalize on time efficiencies and economies of scale.
Seligi H was installed 150 miles offshore Terengganu, Malaysia, in the South China Sea in August 2001 following construction in Johor, Malaysia with four other satellite platforms: Raya B, Lawang A, Serudon A and Irong Barat B. After completion of ten wells on Seligi H, the jack-up drilling rig will move progressively to the other platforms and drill a total of 31 wells. Production will be brought onstream in stages between the second quarter of 2002 and early 2003.


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