Page 1

RESPONSIBLE ENERGY DEVELOPMENT

ABOUT NEXEN: IN THE UK


A CLOSER LOOK AT OUR OPERATIONS IN THE UNITED KINGDOM

ABOUT NEXEN

Installation of wellhead deck at Golden Eagle in the UK North Sea.

WHERE WE OPERATE, WHAT WE PRODUCE, HOW WE MEASURE UP Nexen Petroleum U.K. Limited has been a key player in the UK North Sea since 2004. Today, we are one of the country’s largest energy producers, generating 223,100 barrels of oil equivalent per day (boe/d) (approximately 106,000 boe/d net to Nexen) from our North Sea assets in 2013. This production supplies approximately 10% of the UK’s energy needs. We are also very much a growing presence in the region. In 2014, we expect to see first oil from Golden Eagle, one of the biggest recent oil discoveries in the UK North Sea.

We’re also producing new oil from a relatively mature basin by innovatively creating tiebacks between new fields and our existing platforms. Nexen’s UK-based employees and contractors create value by producing oil in a safe and reliable manner, with a shared commitment to excellence. For us, sustainable energy development is about engaging stakeholders, managing our environmental footprint and sharing the benefits of resource development with the communities where we operate.

WE CONTINUE TO BUILD ON OUR POSITION AS A ‘TOP QUARTILE’ NORTH SEA OPERATOR AS WE STRIVE TO BE BEST IN CLASS WITH A PROVEN RECORD OF SAFE, EFFICIENT AND RELIABLE PRODUCTION. ARCHIE KENNEDY MANAGING DIRECTOR, UK

NEXEN

Nexen Petroleum U.K. Limited is a wholly-owned subsidiary of CNOOC Limited and is part of the Nexen group of companies, which is based in Calgary, Canada. Nexen is strategically focused on three businesses – conventional oil and gas, oil sands and shale oil and gas. In addition to our UK-based business, Nexen has operations in offshore West Africa, the Gulf of Mexico and western Canada.

CNOOC LIMITED

CNOOC Limited is China’s largest producer of offshore crude oil and natural gas and one of the largest independent oil and gas exploration companies in the world, with operations in more than 20 countries. In 2013, CNOOC Limited produced an average of 1.13 million boe/d.


SCOTT/ TELFORD

OUR GROWTH AGENDA CONTINUES TO BUILD MOMENTUM AS WE ADVANCE OUR GOLDEN EAGLE PROJECT, A £2.3 BILLION INVESTMENT, TOWARDS FIRST PRODUCTION, IN PARALLEL WITH OUR ACTIVE EXPLORATION AND APPRAISAL PROGRAMMES.

SOLITAIRE

ETTRICK BLACKBIRD BUZZARD

SCOTLAND

RAY RIDDOCH DIRECTOR – OPERATIONS

OVERVIEW: NEXEN’S UK NORTH SEA OPERATIONS Nexen is a significant – and growing – player in the UK North Sea.

OUR OPERATIONS AT A GLANCE BUZZARD

Located about 120 kilometres northeast of Aberdeen in approximately 97 metres of water, Buzzard is the largest UK North Sea oil discovery in the past two decades. Nexen is the operating partner of Buzzard, with a 43.2% interest. SCOTT/TELFORD/ROCHELLE

The Scott platform, which came on-stream in 1993, is located approximately 188 kilometres northeast of Aberdeen in about 142 metres of water and produces oil and natural gas from the Scott, Telford and Rochelle fields. Nexen is the operator of both Scott and Telford (with a 41.9% and 80.4% interest respectively) as well as in the Rochelle field (with a 41.0% interest). ETTRICK/BLACKBIRD

Oil and natural gas production from the Ettrick and Blackbird fields is tied back to the Aoka Mizu floating production, storage and offloading (FPSO) vessel leased by Nexen. The FPSO vessel is located approximately 120 kilometres northeast of Aberdeen in about 115 metres of water. Nexen has a 79.7% operated interest in Ettrick and a 90.6% interest in Blackbird. ABERDEEN AND UXBRIDGE

We operate our UK business from two main offices – Uxbridge near London and Aberdeen in Scotland. The offices oversee all aspects of our UK operations, including engineering, project management and oil and gas exploration and production.

ROCHELLE

GOLDEN EAGLE

ABERDEEN

The UK offices also support our operations in offshore West Africa, where Nexen is a co-venture participant with Esso, Total and Chevron on the Usan field.

UK NORTH SEA

OPERATIONAL EXCELLENCE AT BUZZARD In 2013, Buzzard was the UK’s largest producing oil field and one of the most complex operations in the UK North Sea. In production since 2007, operational reliability has been an issue at Buzzard, with unplanned outages reducing output. Nexen has been working to reduce outages by pursuing a policy of “Operational Excellence” that includes investing in new equipment, operator training and continually examining ways to strengthen business processes. We’re starting to see positive results. Last year, we reduced unplanned outages by nearly 50%. As well, overall operational efficiency at Buzzard has improved year-over-year since 2011.

BILLION BARREL PRODUCTION MILESTONE

Nexen passed a major milestone in April 2013 when our combined UK assets celebrated the production of one billion barrels of oil (gross). Our longest established UK asset, the Scott platform, was the major contributor, producing almost 60% of the total.

OPERATIONAL EFFICIENCY

71%

84%

88%

2011

2012

2013

Improved asset efficiency is one key measure of progress towards operational excellence and more reliable production. Other critical components are ensuring our facilities are safe and minimising our impact on the environment. In the 17 million hours worked in the UK business in 2013, we achieved a combined employee and contractor Total Recordable Incident Frequency of 0.27 – our best ever performance.

= 50,000,000 BOE =

PRODUCED BY SCOTT PLATFORM

ABOUT NEXEN: IN THE UK

01


OUR UK NORTH SEA OPERATIONS: DRIVING ECONOMIC GROWTH Major production growth is on the horizon from Nexen’s UK North Sea assets. We expect that will come with significant and sustained economic and social benefits for the United Kingdom. GOLDEN EAGLE

After a series of construction milestones in 2013, the Nexen-operated Golden Eagle project remains on budget and on schedule to deliver first oil by late 2014. As of December 31, 2013, the project had expended over 13.5 million hours worked without a lost time injury across all sites and major contracts. Located 70 kilometres northeast of Aberdeen, Golden Eagle is the second largest oil discovery in the UK North Sea since Buzzard was discovered in 2001. Nexen has a 36.5% interest in the project. We’re planning for a long, successful and safe operating life at Golden Eagle, which is also expected to act as a future hub for tieback opportunities. The £2.3 billion budget for Golden Eagle is delivering significant economic benefits to the United Kingdom. The project is

02

ABOUT NEXEN: IN THE UK

supporting more than 2,000 jobs across the supply chain and, once operational, is expected to employ about 400 people directly. Approximately 75% of the contracts for Golden Eagle have been sourced within the UK, for a total benefit of more than £1.4 billion. And during the life of the project, production from Golden Eagle is expected to generate billions in taxable income. GOLDEN EAGLE CREATES NEW BUSINESS OPPORTUNITIES

Atlantic Offshore Rescue Ltd., managed out of Aberdeen, is one of many third-party businesses benefiting from the Golden Eagle project. Thirty new jobs have been created to operate the Ocean Tay, a Class A Emergency Response and Rescue Vessel. The 63-metre Ocean Tay, which will provide emergency vessel coverage for Golden Eagle, can hold a crew of 20 and has the capacity to rescue more than 300 people.

Emergency Response and Rescue Vessel at the ready.


ENVIRONMENTAL LESSONS LEARNED

FUTURE EXPLORATION

JOBS, JOBS, JOBS

Nexen used environmental lessons learned from our Buzzard platform in designing the Golden Eagle platform. To reduce the potential for spills and minimise hydrocarbons in any overboard discharges, modifications were made to the designs of Golden Eagle’s drain system and crude oil heat exchangers.

Nexen holds approximately 70 blocks in the UK North Sea and we continue to actively identify new areas of exploration and production. In addition to opportunities that can be tied-in economically to existing assets in a short time period, we also seek to establish new core areas through relatively unexplored areas of the basin. We continue to target oil-focused assets that are early life and generate strong cash flow.

The Golden Eagle project, along with expanded exploration and production activities, has put Nexen UK on a serious hiring footing. An aggressive recruitment over the past year has included advertisements in print, radio, social media and industry job boards. In 2013, we began recruiting talent for the Golden Eagle project, and expect to add another 130 new positions in 2014.

SOLITAIRE, ROCHELLE AND NEXEN’S “HUB STRATEGY” Despite being a relatively mature basin, the UK North Sea continues to offer significant potential for value creation. But to fully realise that potential, Nexen and our project co-venture participants need to adopt new strategies. We anticipate that most of the remaining barrels of oil are going to be found in smaller fields that will likely not support investment in new platforms. These new, but smaller discoveries will only be commercial if they can be tied back to existing assets. A good example of this hub strategy at work is the Solitaire field, which was discovered in 2001 and acquired by Nexen and our Golden Eagle co-venture participants in 2010. Located four kilometres northeast of Golden Eagle, Solitaire was a stranded discovery and not large enough to be developed on its own. By creating a tieback to Golden Eagle infrastructure, we’re preparing to bring Solitaire on stream, with first production expected in 2015. Nexen is the operator and holds a 36.5% interest in Solitaire, which is expected to produce eight million barrels of oil (gross). Upgrades made to the veteran Scott platform in 2013 are another example of turning existing infrastructure into long-life hub developments. The platform improvements are expected to support enhanced production from existing oil and gas fields, our new Rochelle field and other future field tiebacks.

ECONOMIC CONTRIBUTION Nexen’s activities contribute directly to the economic and social wellbeing of countries where we operate. In 2013, Nexen’s activities in the UK North Sea accounted for:

GROWING WORK FORCE

2011

2012

2013

FULL-TIME EMPLOYEES

501 579 589

CAPITAL EXPENDITURE (CAD $BILLIONS)

BASE BASECONTRACTORS* CONTRACTORS 2011

0.583 1.022

2012 2013

0.880

592 702 740 * Any contractor that was active during the specified year

ROYALTIES AND INCOME TAXES (CAD $BILLIONS)

2011

1.448

2012

1.456

2013

1.677

WE’VE MADE SIGNIFICANT PROGRESS ON THE GOLDEN EAGLE PROJECT. AT THE END OF 2013, THE PROJECT WAS OVER 80% COMPLETE — ON SCHEDULE AND ON BUDGET. WE HAD ACHIEVED OVER 13.5 MILLION HOURS WORKED WITHOUT A LOST TIME INCIDENT.

Nexen Platform Maintenance Coordinator at the Scott Platform.

PAUL HARRIS GOLDEN EAGLE PROJECT DIRECTOR

ABOUT NEXEN: IN THE UK

03


SAFETY FIRST: A CORE VALUE

Safety is a core value at Nexen and the success of every activity we undertake is measured on our ability to conduct our work safely each and every day. Our employees and contractors strive to ensure oil and gas production occurs without incident or harm to people, communities and the environment every day. We are committed to improving our performance across the company to become best in class in everything we do. Best in class companies are ones where safety is embraced by everyone, all the time. We have improvements to make

in this area and initiatives are underway to strengthen and improve our safety performance. Our Executive Leadership Team is fully committed to supporting a safe workplace by providing employees and contractors with clear expectations about: •

safety awareness;

consistent work practices;

proactive hazard identification;

•  rigorous

risk mitigation, especially for non-routine work;

•  recognition

and support for safety performance; and

ongoing safety training and resources.

In 2013, Nexen achieved its best ever occupational safety performance.

UK SAFETY PERFORMANCE (COMBINED EMPLOYEE AND CONTRACTOR)

TOTAL RECORDABLE INJURY FREQUENCY (TRIF)*

LOST TIME INJURY FREQUENCY (LTIF)*

2011

2011

0.40 0.53

2012 2013

0.27

* Total Recordable Injury Frequency represents the number of specified injuries based on RIDDOR guidance for every 200,000 hours worked by employees and contractors including off-shift hours for offshore personnel.

04

ABOUT NEXEN: IN THE UK

0.16 0.13

2012 2013

0.06

* Lost Time Injury Frequency represents the number of accidents reportable under RIDDOR for every 200,000 hours worked by employees and contractors including off-shift hours for onshore personnel.

SAFETY PERFORMANCE Over the past three years, there have been no recordable safety events involving employees at any of our UK businesses and we’ve also realized an improvement in contractor safety. This safety improvement has occurred while we have undertaken a significant capital project: the £2.3 billion Golden Eagle development. In order to continuously improve, Nexen also compares our safety performance to members of the International Oil and Gas Producers Association (OGP). This benchmark analysis shows that Nexen’s performance in 2011 and 2012 was stronger than the average OGP European offshore companies. Nexen also compares our safety performance to the Oil and Gas UK benchmark of offshore recordable safety events. In 2013, Nexen’s performance was slightly better than the benchmark.


WE CONTINUE TO PROMOTE SAFETY, INTEGRITY AND ENVIRONMENTAL RESPONSIBILITY THROUGHOUT NEXEN’S FACILITIES. KENNY CRIGHTON MANAGER, HEALTH & SAFETY

Operator at Scott Platform in the UK North Sea.

UK BY CHOICE PROGRAM The “By Choice” safety program was developed by Nexen UK to improve work practices and ensure we eliminate the short cuts that result in incidents. It aims to help employees and contractors understand why they make the choices they do, so they learn to make the right business decisions. The “By Choice” program, which reinforces good behaviours and safety practices, was successfully incorporated into the maintenance shutdowns of the Buzzard and Scott platforms, resulting in improved safety performance.

STEP CHANGE IN SAFETY Nexen is a member of a UK-based organization called Step Change in Safety that is working towards improved safety performance in the UK North Sea. Step Change in Safety is a non-profit partnership between industry participants, including UK health and safety regulators, trade unions, operators and service companies. The goal is to make the UK the safest place to work in the oil and gas industry – through cooperation, collaboration and sharing and adopting of best practices and lessons learned.

ELIMINATING UNPLANNED HYDROCARBON RELEASES

But we haven’t stopped there, and have since taken further steps to improve by:

Between 2010 and 2013, we achieved a 25% reduction in major or significant hydrocarbon releases at all of our platforms in the UK North Sea earning us the Safety Award – Highly Commended category at the 2013 Energy Institute Award Ceremony. Nexen’s Hydrocarbon Release Reduction Project, which helped us achieve our reduction in hydrocarbon releases, includes:

• establishing the Hydrocarbon Release Save Awards, which recognise employee efforts to identify areas where potential hydrocarbon releases could occur; • investing in thermal imagery cameras that help identify problem areas; and • requiring personnel to take mandatory hazard awareness training.

• reviewing lessons learned; • assessing our own hydrocarbon release record and that of our industry peers; • benchmarking best practices and learning from the hydrocarbon reduction strategies developed by other energy companies; • raising awareness with our employees and contractors through improved communications, training and education investing in operational and process improvements; and

Doing the right thing at the right time is fundamental to achieving HSE excellence and compliance. The “By Choice” program is an all-encompassing tool used by Nexen to engage with the entire workforce ensuring positive behaviour relating to the health, safety and environmental impact on our work and our everyday lives.

• measuring effectiveness.

ABOUT NEXEN: IN THE UK

05


ENVIRONMENT

As a responsible energy developer, Nexen seeks to reduce our impact on air, water, land and ecosystems. ELIMINATING UNPLANNED HYDROCARBON AND CHEMICAL SPILLS

All unplanned spills of hydrocarbon or chemicals, regardless of volume, that enter the marine environment are reportable to the offshore environmental regulator, the Department of Energy and Climate Change (DECC). During 2013, Nexen reported 55 unplanned spills compared to 38 in 2012. This increase was due to numerous factors including increased production. The vast majority of fluids released were waterbased hydraulic fluids which meet stringent environmental requirements for discharge and are permitted for release under normal planned operating conditions. To improve our performance, an environmental integration plan is being implemented that includes additional topside plant reviews and subsea monitoring and more rigourous post incident investigations that include a more comprehensive root cause analysis,

06

ABOUT NEXEN: IN THE UK

leading to improved operating processes and maintenance procedures. PRODUCED WATER

During offshore oil and natural gas production, a mixture of hydrocarbons and water is extracted from the reservoir. The produced water is separated from the oil and gas and where possible, is re-injected into the reservoir to maintain production. Alternatively, the produced water is treated and, once it meets strict regulatory requirements, is discharged to the ocean. Nexen reports the discharge and disposal of produced water to regulators. The volume of produced water discharged overboard increased in 2013 over 2012 volumes. This increase is due significantly to increased production from aging fields that are producing greater volumes of water with oil. PRODUCED WATER DISCHARGED OVERBOARD (millions of cubic metres/year)

6.97

2011 2012 2013

6.38 6.54

REPORTABLE SPILLS

An environmental integration plan is being implemented to address the increase in number and volume of spills. 100

80

55

60

40

20

25

38

0

2011

2012

Number of Spills

2013

Volume Spilled (m続)

MASS OF HYDROCARBONS DISCHARGED OVERBOARD (tonnes) 87

2011 71

2012 2013

48


ENVIRONMENTAL REGULATORY OR PERMIT VIOLATIONS

MANAGING GREENHOUSE GAS EMISSIONS

Permit violations include objects inadvertently dropped into the sea, exceeding discharge limits and having chemicals on-board that are not listed on the permit. In 2013, there was an increase in permit violations largely due to a revision of the definition to include non-compliance with legislation or permits related to air, land or water management or environmental protection. To improve performance in this area, Nexen is implementing an environmental integration plan, which includes a new training and awareness programme for employees and contractors.

2012 2013 1 1

Emission intensity and total emissions decreased in 2013 over 2012 at our UK businesses, largely as a result of increased production at our lowest emissions intensity facility – Buzzard. Detailed information about the action Nexen is taking to combat climate change as well as detailed information about company-wide GHG levels, can be found at www.nexencnoocltd.com/responsibledevelopment. C02 EQUIVALENT EMISSIONS (million tonnes)

2011 2012

ENVIRONMENTAL REGULATORY OR PERMIT VIOLATIONS

2011

Climate change is a growing issue requiring global solutions from energy producers, governments and consumers. At Nexen, we recognize the management of greenhouse gas (GHG) emissions is an important policy and business issue. That’s why we engage in public policy discussions on climate change and invest in technologies and innovation to improve the overall efficiency of our operations and further reduce our emissions intensity.

2013

PRODUCTION CARBON INTENSITY (t CO2 e / m3OE)

0.73 0.77 0.73

0.068

2011

0.065

2012 2013

0.056

11 2 18

The indicator definition was revised in 2013. The revised definition includes any violation of legislation (act/regulation/ directive) or permit issued related to air, land or water management or environmental protection. Under the former indicator name (Environmental Exceedances) non-compliances with legislation were not included.

NEXEN UK IS COMMITTED TO DRIVING SUSTAINABLE ENVIRONMENTAL PERFORMANCE. OUR ENVIRONMENTAL INTEGRATION PLANS ENSURE ENVIRONMENTAL CONSIDERATIONS ARE BUILT INTO OUR BUSINESS PROCESSES AND DECISIONS. KAREN YORKE IMPROVEMENT LEAD, EHS


NEXEN: INVOLVED IN OUR COMMUNITY

At Nexen, giving back to the communities where we live and work is deeply rooted in our values. Investing in communities is not just the way we do business; it’s a point of pride for our employees and contractors. Through our “ReachOut” programme, Nexen supports the community through direct donations, matching the contributions made by employees, and encouraging volunteer activities. In 2013, over £1 million was contributed to charitable organizations in the UK through a combined effort of company and employee donations.

GIVING, MATCHING AND HELPING Nexen supports a number of local charitable groups in the UK.

+ GIVING DONATIONS

£ 972,800

+ MATCHING DONATIONS + £ 86,000

HELPING DONATIONS

£ 17,000

TOTAL = £ 1,075,800

STONEHAVEN LIFEBOAT STATION

In December 2012, an independent lifeboat station, located in Stonehaven approximately 24 kilometres south of Aberdeen, was forced to close after suffering extensive damage as a result of severe weather. Nexen is supporting the reinstatement of this service by providing £90,000 to fund the first year of a new lifeboat station, operated by the Royal National Lifeboat Institution.

NEXEN’S REACHOUT PROGRAMME HELPS US ENGAGE POSITIVELY WITH THE LOCAL COMMUNITY AND PROVIDES THE CHANCE FOR MORE PEOPLE TO EXPERIENCE NEXEN’S VALUES AT WORK. STEVE REGULSKI MANAGER, HSE LEGAL COMPLIANCE & SOCIAL RESPONSIBILITY


MATCHING DONATIONS

Nexen supports the contributions our employees make to charitable and non-profit organizations by matching up to a maximum of £12,500 per individual, in any one calendar year.

HELPING DONATIONS

Nexen’s volunteer programme provides employees with two days paid leave to volunteer with causes and initiatives important to them.

GIVING BACK

There are a variety of charitable organizations that Nexen supports in the UK: •  TECHFEST promotes science, technology, engineering and mathematics to young people in Aberdeen. •  OUTWARD BOUND TRUST is an educational charity and the UK’s leading provider of bursary-assisted outdoor learning.

Nexen employees pitch in to build a community garden at the Pitcaple Environmental Project.

COMMUNITY CAFÉ

In May 2013, staff and contractors from Nexen’s Aberdeen operations joined with local community members to celebrate the opening of the Nexen-funded Buzzard Café at the Pitcaple Environmental Project, a charity that provides employment and training for people with learning disabilities. The Buzzard Café is named after Nexen’s Buzzard platform, whose staff initially became involved with the project back in 2006. SCHOLARSHIPS

At Nexen, we believe supporting educational advancement is good for our business and the communities where we operate. In 2013, Nexen contributed approximately £130,000 to fund 20 undergraduate and three master’s level scholarships for students in the areas of engineering, science and business at the following universities: Imperial College London, University of Leeds, University of Aberdeen, University of Edinburgh, University of St. Andrews, University of Warwick, University of Sheffield and Brunel University.

NEXEN UK HAS A BROAD CORPORATE RESPONSIBILITY PROGRAMME AND WE ARE PROUD OF OUR CLOSE TIES WITH LOCAL CHARITIES INCLUDING THE PRINCE’S TRUST, ROYAL NATIONAL LIFEBOAT INSTITUTION, OUTWARD BOUND TRUST, THE MAYOR’S FUND FOR LONDON AND THE GORDON HIGHLANDERS’ MUSEUM — TO NAME A FEW. ARCHIE KENNEDY MANAGING DIRECTOR, UK

•  THE PRINCE’S TRUST addresses youth unemployment by giving practical and financial support to young people who need it most. •  MAYOR’S FUND FOR LONDON aims to give disadvantaged young Londoners the skills and opportunities to enable employment and escape the threat of poverty and play a full part in London’s future. •  Journey of a Lifetime Trust (JOLT) makes a positive difference to the lives of disabled, ill, neglected and abused young people. • ABERDEEN GREENSPACE TRUST strengthens biodiversity and generates public awareness about the need for environmental protection. •  ABERDEEN INTERNATIONAL YOUTH FESTIVAL provides talented young performers from around the world an opportunity to perform together, exchange ideas and develop their artistic talents.

ABOUT NEXEN: IN THE UK

09


CONTACT

+ 44.1895.237700 UXBRIDGE OFFICE

Nexen Petroleum U.K. Limited Prospect House 97 Oxford Road Uxbridge, UK UB8 1LU www.nexencnoocltd.com NEXEN PETROLEUM U.K. LIMITED

Discovery House Prime Four Business Park Kingswells Causeway Kingswells Aberdeen, UK AB15 8PU

FOLLOW US ON SOCIAL MEDIA

SUSTAINABILITY REPORTING: LEARN MORE This publication highlights some of the sustainability initiatives underway at Nexen’s UK operations. More detailed information is available at www.nexencnoocltd.com/ responsibledevelopment. CNOOC Limited also publishes a corporate social responsibility report which can be found at http://www.cnoocltd.com/encnoocltd/shzr/shzrbg/.

Learn about Nexen, the communities we invest in and what makes us an employer of choice. See photos of our operations, how we invest in communities and how we are a responsible energy developer.

twitter.com/nexenenergy FORWARD LOOKING STATEMENTS This report includes “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, including statements regarding expected future events, business prospects or financial results. The words “expect”, “anticipate”, “continue”, “estimate”, “objective”, “ongoing”, “may”, “will”, “project”, “should”, “believe”, “plans”, “intends” and similar expressions are intended to identify such forward-looking statements. These statements are based on assumptions and analyses made by Nexen Energy ULC (Nexen), a wholly-owned subsidiary of CNOOC Limited (the “Company”, NYSE: CEO, SEHK: 00883, TSX: CNU) in light of its or their experience and perception of historical trends, current conditions and expected future developments, as well as other factors that Nexen or the Company believes reasonable under the circumstances. However, whether actual results and developments will meet Nexen’s or the Company’s expectations and predictions depends on a number of risks and uncertainties which could cause the actual results, performance and financial conditions to differ materially from the Company’s expectations, including those associated with fluctuations in crude oil and natural gas prices, the exploration or development activities, the capital expenditure requirements, the business strategy, whether the transactions entered into by Nexen or the Company can be completed on schedule pursuant to its timetable or at all, the highly competitive nature of the oil and natural gas industries, the foreign operations, environmental liabilities and compliance requirements, and economic and political conditions in the People’s Republic of China. For a description of these and other risks and uncertainties, please see the documents the Company has filed from time to time with the United States Securities and Exchange Commission, including 2013 Annual Report on Form 20-F filed on April 17, 2014. Consequently, all of the forward-looking statements made in this report are qualified by these cautionary statements. The Company cannot assure that the results or developments anticipated will be realized or, even if substantially realized, that they will have the expected effect on the Company, its business or operations. August 2014

10

ABOUT NEXEN: IN THE UK

youtube.com/nexen linkedin.com/company/nexen flickr.com/photos/ nexenenergy YouTube is a Google Brand Feature which is a trademark or distinctive brand feature of Google Inc. Reproduced with permission of Yahoo! Inc. FLICKR and the flickr logo are registered trademarks of Yahoo! Inc.

2013 Sustainability Report UK  
2013 Sustainability Report UK