EXXONMOBIL

Exxon Ventures (CIS) Inc. (EVCIS), an affiliate of ExxonMobil Corporation, was formed in 1992 to oversee exploration and production activities in the former Soviet Union. With headquarters in Houston, Texas, EVCIS and its affiliates also have offices in Almaty, Kazakhstan; Baku, Azerbaijan; and Moscow, Yuzhno-Sakhalinsk and Arkhangelsk, Russia. Affiliates of EVCIS have or are pursuing interests in Kazakhstan, Azerbaijan, and Russia. EVCIS activities in Azerbaijan are outlined below.

In July 1996, Exxon Azerbaijan Limited increased its stake from 5% to 8% in a project to develop the estimated 5 billion barrel "megastructure" in the Azerbaijan sector of the Caspian Sea. The company's original 5% interest was acquired from the State Oil Company of the Azerbaijan Republic (SOCAR) in April 1995. The additional 3% interest was acquired from Pennzoil Caspian Corporation. The megastructure includes the Azeri and Chirag fields, as well as the deep-water portion of the Gunashli field. The Azerbaijan International Operating Company (AIOC), owned by a consortium of 11 companies with interests in the Megastructure, is developing the project. First production from the development is expected in the second half of 1997.

In June 1996, Exxon Azerbaijan Limited signed a memorandum of understanding (MOU) with SOCAR granting the company exclusive rights to negotiate production sharing agreements covering tow offshore exploration blocks totaling 200,000 acres (800 sq. km.) in the Azerbaijan sector of the Caspian Sea.

In August 1997, Exxon Exploration and Production Azerbaijan Limited signed an agreement with SOCAR that defines exploration, development, and production sharing terms for the Nakhchivan prospective structure, an offshore exploration block in the Azerbaijan sector of the Caspian Sea. Nakhchivan represents Exxon's first sole operatorship in the Republic. Formerly referred to as D-3, the exploration block is located about 60 miles (100 km) south of Baku and 30 miles (50 km) south of the existing Bulla-Deniz gas condensate field. The block is located in water depths ranging from about 300 feet (100 meters) to 1,600 feet (500 meters) and covers about 100 sq. miles (280 sq. km.).

It is one of two blocks selected by Exxon after completing joint technical studies with SOCAR. The structures on Exxon's blocks are considered attractive; however, drilling is required to confirm the presence of hydrocarbons. Negotiations on an exploration, development, and production sharing agreement for a deeper water block, D-9/D-38, are ongoing.

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