Offshore West Africa
Offshore West Africa is a core area where we already have discoveries. It offers prolific reservoirs and multiple opportunities to invest in this oil-rich region. Our strategy here is to explore and develop our portfolio for medium- to long-term growth.

Nigeria
In 1998, we acquired a 20% non-operated interest in Block OPL-222, which covers 448,000 acres approximately 50 miles offshore in water depths ranging from 600 to 3,500 feet. In 1998, we discovered the Ukot field and encountered three oil-bearing intervals. This was followed up by a successful appraisal well in 2003. In 2002, the Usan field was discovered and seven more successful wells confirmed that significant hydrocarbons exist on the block. In 2008, we acquired an 18% non-operated interest in Block OPL-223, covering 230,000 acres, which provides us with future exploration potential on the adjacent block.

The Nigerian government approved converting OPL-222 into two OMLs (Oil Mining Lease) that will allow the joint venture partners to develop the Usan and Ukot discoveries. OML-138 consists of 50% of the original acreage and includes the Usan discovery. OML-139 consists of the remaining OPL-222 acreage and includes the Ukot discovery.

Appraisal of the Usan field is complete and development of the field is progressing. Major contracts for construction of the FPSO and subsea facilities were awarded during 2008. The project will have the ability to process an average of 180,000 bbls/d of oil during the initial production plateau period through a new FPSO with a two million barrel storage capacity. We expect our share of development and construction costs will be approximately US$2 billion with first production in 2012. In 2009, we plan to progress with the Usan development program. This will include completing detailed engineering, procurement of remaining equipment, fabrication of the FPSO, and initiation of development drilling. At year-end 2008, proved reserves of 28 mmboe before royalties (25 after royalties) comprise approximately 3% of our total proved oil and gas and Syncrude reserves.