Colombia

In 2000, we made a discovery at Guando on our 20% non-operated Boqueron Block and production from Guando began in 2001. Boqueron is in the Upper Magdalena Basin of central Colombia, approximately 45 km southwest of Bogota. Our working interest in Guando will decrease to 10% once the field has produced 60 million barrels of oil, which is expected to occur in mid 2009. Our share of 2008 production averaged 5,800 bbls/d before royalties (5,300 after royalties), about 2% of Nexen’s total production including Syncrude. We also hold three exploration blocks in the Upper Magdalena Basin that we are assessing for future growth opportunities.

Production from Guando is subject to a royalty between 5% and 25% depending on daily production, and in 2008 averaged 8%. Colombian taxable income is subject to federal income tax of 33% in 2009 and future years.

Norway

Norway is an extension of our conventional offshore growth strategy in the North Sea. The Norwegian North Sea is an established area that has significantly developed infrastructure and relatively unexplored basins that provide the potential for future growth. The Norwegian government created incentives for the oil and gas industry to explore by providing 78% cash tax refunds on qualifying exploration expenditures to companies that do not have a taxable income base. We have ten offshore exploration licences in the Norwegian North Sea with plans to drill our first exploration well in the near future. In 2009, we expect to invest in seismic and geologic studies.

Norwegian oil and gas activities are subject to a general corporate income tax rate of 28% plus an additional 50% special petroleum tax.