Upstream Technology

LEADERSHIP POSITION

The combined technologies and experience of Exxon and Mobil significantly strengthen the company's proprietary technology portfolio and its leadership position in the development and application of world-class geoscience and engineering technology. ExxonMobil's annual investment of almost $200 million in upstream research has developed technologies that provide a competitive advantage in identifying, acquiring, commercializing, and efficiently managing oil and gas resources. In addition, a major component of the research program is aimed at developing new breakthrough technologies with potential to significantly enhance the corporation's financial performance. Examples of this technology advantage follow.

Basin Models

ExxonMobil's capacity to understand and model sedimentary basins is unsurpassed. The company's advanced analytical capabilities allow geoscientists to accurately characterize the type and volumes of hydrocarbons generated, and predict migration pathways and the locations of oil and gas traps. Industry-leading analytical geochemistry and modeling capabilities allow for the rapid development of a three-dimensional framework, which increases exploration success and lowers finding costs.

Three-Dimensional Seismic

The combined strength of ExxonMobil's seismic acquisition, processing, and interpretation technologies is unparalleled, resulting in accurate depictions of the subsurface that can be viewed and interpreted using proprietary three-dimensional capabilities. These capabilities increase exploration success while lowering finding costs. They also allow more rapid and accurate well design and placement for efficient and economic development of the company's hydrocarbon resources. New technology is being developed that directly detects the location of hydrocarbons in the earth.

In 1999, the Society of Exploration Geophysicists (SEG) honored Exxon Mobil Corporation with its Distinguished Achievement Award for the invention and development of three-dimensional seismic exploration. The SEG recognized three-dimensional seismic exploration as the most important geophysical innovation in the last 30 years. Invention of this technology dates back to research started in 1963.

Drilling Technology

Competitive leadership in drilling technology translates into substantial cost savings. For example, application of proprietary wellbore-integrity, hole-cleaning, and stuck-pipe avoidance technologies enabled ExxonMobil to drill horizontal wells at record water depths in the Gulf of Mexico Diana field with no hole problems. These capabilities have developed from ExxonMobil's long-standing commitment to drilling fundamentals and an emphasis on maximizing the value of drilling operations.

Reservoir Characterization — Reservoir Management Technologies

Reservoir characterization is critical in establishing the framework for commercial development of hydrocarbon resources. Both Exxon and Mobil had long traditions of expertise in reservoir characterization technologies, and now ExxonMobil sets the standard for industry. The company's ongoing research provides a leading-edge understanding of reservoir depositional systems such as those found in deepwater environments. ExxonMobil's ability to integrate seismic data with knowledge of depositional processes tied to log, core, and outcrop analogs sets us apart from other companies. Benefits include an improved ability to identify new play concepts, reduced time to commercialization, reduced uncertainty in estimates of recovery efficiency, and improved insight into well placement and depletion strategies, which is especially critical in deepwater areas such as offshore West Africa.

In the area of recovery optimization, ExxonMobil leads the industry with a combination of proprietary technology, expert practitioners, and experience. Technologies in areas ranging from geoscience interpretation to mathematical simulations of reservoir production performance have been developed and improved over many years. Operation of more than 28 thousand wells in six hundred fields, and participation in over a thousand fields operated by others, converts this technical leadership into added value and allows continuous improvement.

Reservoir management technologies and practices have enabled ExxonMobil to produce millions of additional oil-equivalent barrels each year. For example, in the mature Ubit field in Nigeria, use of advanced geoscience and reservoir management tools has led to production increases from 40 thousand barrels per day in the early 1990's to over 130 thousand barrels per day in 1999.

Materials Design

Leadership in materials design and selection technologies enable ExxonMobil to utilize the most cost-effective materials in projects worldwide. A state-of-the-art testing facility is used to identify optimum tubular connection designs to ensure mechanical integrity and sealability for wellbore service at high pressures and extreme temperatures. A unique large-scale testing facility is used to evaluate a wide range of materials for exposure to a field's specific corrosive environment. By combining this corrosion mitigation knowledge with a thorough understanding of the corrosive resistance of each type of steel, engineers can select the best downhole tubular and flowline steel for the job, often at substantial savings relative to materials used by competitors.

Gas Commercialization Technologies

ExxonMobil is the industry leader in gas commercialization technology and the leading gas producer among the major oil companies, including an interest in about a quarter of the world's current liquefied natural gas (LNG) capacity. ExxonMobil LNG, gas-to-liquids, high-strength steel, and power generation technologies will enable the company to profitably commercialize remote gas resources and profitably increase gas production and sales. ExxonMobil is also developing breakthrough technology targeted at dramatically lowering the cost of moving gas to markets.