Nexen Inc. - Sustainability - Community

Small Investments Pay Big Dividends in Yemen

Just over a third of Nexen’s community investment budget, about $2.4 million, was spent in our international business, including Yemen, Colombia, Nigeria and Equatorial Guinea. Some of these investments are large and high-profile, such as our Yemen scholarship program and the Ressib water and sanitation project. But sometimes it is the smaller, informal projects that deliver the most immediate benefits to neighbours in need.

We are expanding our Yemen operations in an area known as Block 51, adjacent to our original operations in Masila. This is dry, dusty territory where access to water is fundamental to community survival. In the village of Al-Hazem, the water well hadn’t produced for several months; five nearby villages also depended on this water source. In Wadi Adm, the community’s water well and pumping equipment were badly in need of repair. In the Bedouin community of Haradh, the villagers depend on a seasonal karef (pond) for their water. When the pond dries up, people have to travel 40 kilometres to the closest water source.

With a modest budget and a personal commitment from the Block 51 operations, drilling and community relations teams, the wells and pumping equipment at Al-Hazem and Wadi Adm were repaired and water supplies restored. In Haradh, we installed a 20,000-litre water tank, which we replenish regularly.

The Block 51 government and public relations team were awarded certificates of merit by the Yemen Ministry of Oil and Minerals, recognizing the excellent working relationships established among Nexen, the community and the Ministry.

In 1987, Nexen and its joint venture partners entered into a partnership with the Government of Yemen to develop the Masila Project (Block 14). Since first production in 1993, the Masila Block has been Nexen's most significant international project. Masila is also the largest oil project in Yemen, currently producing approximately 40 percent of the country's total oil output.

The relationship Nexen has with the Yemeni people, from the highest levels of government to residents in local communities, is critical to the company's success and sustainability in Yemen. Nexen has a firm commitment to playing a role in its development. Through partnering with the Government of Yemen and the Yemeni people, the company is investing in the country's human resource potential, its physical infrastructure and progress.

In 1997, Nexen celebrated ten years of operations in Yemen by developing a scholarship program directed in disciplines critical to the country's economic growth and development. It was originally envisioned that 20 Yemeni students would be given the opportunity to study at post-secondary institutions in Calgary, Canada. To date, Nexen and its partners have awarded scholarships to 90 deserving Yemeni students. The first group of ten students graduated in 2003 and by the end of 2007, the program will have 40 graduates. Ten additional scholarships will be granted in 2008, bringing our total award to 100.

Each scholarship underwrites the completion of a four-year post-secondary degree program and includes the provision of tuition, books, accommodation, meals, health care insurance, monthly living allowance, and annual travel to Yemen. The value of each scholarship is approximately $145,000 (Canadian dollars) over a four-year period and each student is given the tools, resources and grounding for personal success in the program. It is Nexen's belief that the scholarships are amongst the most lucrative and comprehensive offered anywhere in the world today.

Impact of Program

The Yemen Scholarship Program is building a legacy of personal achievement, creating access to higher education and cross-cultural experiences, and contributing to enhanced governmental and institutional expertise that will ultimately be of benefit to the Yemeni people.

Applications

Applications are now being accepted for an additional ten scholarships that will be awarded in January 2008. Scholarship recipients will begin their studies in Canada in September 2008 or 2009 (start date is dependent on whether or not a student requires English upgrading). For more details on qualifying criteria and to apply for a scholarship, please view the documents attached below.

For more details on qualifying criteria, please read the attached announcement. Please complete and submit your application as outlined in the announcement.