Вы находитесь на странице: 1из 72

2005 Corporate Citizenship Report

Table of contents
Citizenship overview
Energy and progress
Letter from the CEO
Corporate prole
Year in review
Citizenship perspective
Energy outlook
Economic responsibility
Management systems
Corporate governance
Board of Directors
Shareholders
Transparency
Customers
Capital management
Suppliers and contractors
Integrity in our operations
Environmental performance
Environmental Business Planning (EBP)
Climate science
Greenhouse gas (GHG) emissions
GHG emissions reporting
Energy efciency
Flare reduction
Low-emissions natural gas
Research for the longer term
Air emissions
Freshwater use
Spills
Emergency response preparedness
Environmental expenditures
Wastes and residual materials
Biodiversity
Case studies
Workplace performance
Health and safety management
Workforce participation
Security
Workforce health
Product stewardship
Employment policies and practices
Global workforce
Investing in diversity
Prohibiting bribery and corruption
Community & social performance
Strategic community investment
Project assessment and consultation
Respecting property rights
Indigenous communities
Capacity building
Human rights
Political involvement and contributions
Social investment and initiatives
Worldwide community contributions
Employee volunteerism
Index

About this report


1
1
2
4
6
8
10
12
12
12
13
14
15
16
16
17
18
20
20
22
24
24
24
26
27
28
29
30
31
32
33
33
34
36
44
44
45
47
47
49
50
51
53
54
56
56
58
59
59
61
62
63
64
67
67
68

ExxonMobils 2005 Corporate Citizenship Report


is produced in accordance with the International
Petroleum Industry Environmental Conservation
Association (IPIECA) and the American Petroleum
Institute (API) Oil and Gas Industry Guidance on
Sustainability Reporting.
These guidelines are designed to help energy
companies and industry associations enhance business performance and improve the overall quality
of their citizenship communications. The majority
of the guidelines key indicators for environment,
health and safety, social, and economic responsibility are consistent with indicators used in the Global
Reporting Initiative (GRI). For comparability purposes, we have provided a mapping of this in our index
on page 68.
In creating this report, we listened to comments from
readers, conducted interviews with key audience
groups, and gathered insights from employees
around the world. We also considered a detailed
review of our 2004 Corporate Citizenship Report
provided by Business for Social Responsibility (BSR),
a membership-based advisory organization on corporate social responsibility of which we are a member. BSRs review of the 2004 Corporate Citizenship
Report focused on relevance and materiality; balance, accuracy and clarity; metric indicators; links to
business strategy; and, external engagement.
In response to this feedback, we have added several
new items, including a mapping of our methods
of engagement and a data performance table.
This report covers 2005 data and activities, and discusses our performance on a range of issues relating
to the businesses we own or operate. All nancial information presented here is reported in U.S. dollars.
On the Cover. In Indonesias Aceh Province, which is
still recovering from the impact of the 2004 tsunami,
ExxonMobil Oil Indonesia Inc. has been actively
engaging with local communities for three decades.
Our work with the North Aceh Womens Council for
Family Welfare is developing a sustainable model
of preschool education for children.

LRQA attestation summary statement


Lloyds Register Quality Assurance believes the
ExxonMobil reporting system is effective in delivering safety, health, and environmental indicators,
which are useful for assessing corporate performance and for reporting information consistent
with the IPIECA/API Guidelines. For the full attestation statement, see the inside back cover.

Citizenship overview

Energy and progress


Goals of the report

Detail performance
Communicate our
performance on select
economic, environmental,
health and safety, and
social indicators.

Encourage
engagement
Engage with and respond
to a variety of parties on
issues of mutual concern
and interest.

Share results
Share industry-leading
achievements in safety
performance, energy
efciency and emissions
reduction efforts, human
rights policy implementation, community engagement, and other areas
of activity.

Track and identify


improvement
Provide performance
results and information
to identify areas for
continued improvement.

Humankind faces an enormous challenge: meeting the worlds growing


demand for energy, driven mainly by the desire for higher living standards, while
managing the environmental effects of this increase in energy consumption.
At ExxonMobil, we work to balance these different needs. Its why we have
invested more than $74 billion in the past five years to expand energy supplies.
Its why we have promoted energy efficiency in our industry. Its why we have
developed leading-edge technology partnerships. Its why we continue to invest
so much in research both into existing energy technologies for the short term
and into new technologies for the decades ahead. And its why we initiated the
largest privately funded low-greenhouse-gas-energy research effort in history.
By balancing all of these different energy demands, we will be able to address
one of the greatest challenges of our age.

Citizenship overview

Letter from the CEO


Key priority areas for 2006

Continue industryleading investments


in nding, developing,
and delivering the energy
the world needs while
securing value for our
shareholders over the
long term.

Maintain leadership
in health and safety
performance and

Further improve
environmental
performance through

continue pursuing our


goal of zero injuries
and illnesses.

increased energy efciency


efforts, which reduce
air emissions including
greenhouse gases;
enhanced land and water
management; and,
research into advanced
technology and fuels.

ExxonMobils
greatest challenge
lies in helping to
responsibly meet
the worlds rising
energy demand.

communities in which
we operate worldwide.

Continue to address
concerns and identify
opportunities for
creating mutual benet for
society and the long-term
health of the company.

the environment. We believe that industry can and


should play an active and constructive role in the
ongoing dialogue about our energy future.
Through ExxonMobils continued leadership position
in the global energy industry, we are condent we
can help meet the worlds growing need for energy.
Our processes for nding, evaluating, and executing
investment projects have produced excellent results
for our customers and our shareholders for more
than 120 years. Our business decisions are based
on proven science and careful analysis of costs and
benets using an investment discipline aimed at
achieving reliable and consistent results.

Today, as more people around the


world aspire to higher living standards and greater
economic opportunities, they require more energy.
To meet this growth in energy demand, especially in
developing countries, we must continue to develop
and deliver new energy supplies. Doing this well
represents the greatest contribution that ExxonMobil
can make to society.
This challenge became more acute last year as
higher oil prices, natural disasters, and geopolitical
issues caused governments, consumers, investors,
and the public greater concern about the supply
and cost of energy, as well as the effect of its use on

Recruit and train


top talent in the

Our business decisions also reect our commitment


to corporate citizenship. We rmly believe that the
way we achieve results is as important as the results
themselves. To that end, we will continue to apply
our expertise and resources to the daily challenge
of providing energy to the world in an economically,
environmentally, and socially responsible manner.
The global energy industry is enormous, and
projects increasingly require huge investments,
advanced technology, and long-term planning. To
maintain our leadership position in this changing
competitive environment, we manage our investments and operations with consistency, integrity,
discipline, reliability, and ingenuity. We take the
same approach to meeting our commitment to
corporate citizenship.

Further strengthen
our efforts to share
best practices in social
initiatives and improve
community relationships
around the world.

Help our host


communities grow and
prosper through better
access to education and
health care opportunities.

This approach to citizenship is embedded in our


management systems, beginning with our Standards
of Business Conduct. These Standardsrequired to
be understood and applied by all employeeshave
provided a framework for ethical policies and practices for more than 30 years. It is supported by disciplined management systems, such as our Operations
Integrity Management System, which provides the
fundamental framework we use to incorporate safety,
security, health, environmental, and social commitments into our business planning and management.
This systematic approach has enabled us to continue
providing essential energy to meet growing demand
while conducting our operations safely and reliably,
improving energy efciency and environmental
performance, advancing cleaner technologies, and
encouraging economic growth and social progress
in the communities in which we operate.
We are committed to build on this record of
accomplishment in 2006. Our key priorities for the
year include:
Continuing

to make substantial, disciplined investments in nding, developing, and delivering the


energy the world needs while securing value for our
shareholders over the long term;
Maintaining our industry-leading position in health
and safety performance;

Further improving our environmental performance


through increased energy efciency, reduced air
emissions including greenhouse gases, enhanced
land and water management, and research into
advanced technology and fuels;
Recruiting

and training top talent in the communities in which we operate worldwide;

Continuing

to engage with others outside the


company to address concerns and identify opportunities for creating mutual benet to society and the
long-term health of the company;

Further

strengthening our efforts to share best


practices and improve community relationships
around the world; and,

Helping our host communities to grow and prosper


through better access to education and health care
opportunities.

This report illustrates our commitment to citizenship


through the ways we translate our values into
action. We are proud of our achievements to date,
and we look forward to even greater achievements
in the future.

Rex W. Tillerson
Chairman and CEO

Citizenship overview

Corporate prole
A global energy leader

ExxonMobil is the worlds largest publicly traded international oil and gas company. An industry leader in almost every aspect of the energy and petrochemical
business, we operate facilities or market products in nearly 200 countries and
territories around the world and explore for oil and natural gas on six continents.

Worldwide,
ExxonMobil
markets fuels and
lubricants under
three brands

The Exxon emblem is the


primary trademark used
to brand Exxon products
and services in the
United States.

The Mobil trademark is


the primary trademark
used to brand Mobil
products and services
worldwide.

The Esso oval is the


primary trademark used
to brand Esso products
and services outside the
United States.

ExxonMobil is involved

in the exploration and production of crude oil and natural gas;


manufacture of petroleum products; and transportation and sale of crude oil, natural gas, and petroleum
products. ExxonMobil is a major manufacturer and
marketer of basic and specialty petrochemicals
and also has interests in electric power generation
facilities. In addition, we conduct extensive research
programs in support of these businesses.
Upstream. ExxonMobils asset base is highly protable and geographically diverse. The company has
interests in exploration and production acreage in
36 countries, and production in 26 countries located
in Africa, Asia Pacic, the Middle East, Europe, North
and South America, and the Russia/Caspian region.
ExxonMobil sells natural gas in 25 countries and
across ve continents. Total oil and gas production
was 4.1 million oil-equivalent barrels per day in 2005.
Downstream. ExxonMobil has interests in 45
reneries located in 25 countries and more than
35,000 retail outlets in nearly 100 countries. The
company markets fuels and lubricants in more than
150 countries. In 2005, renery throughput was 5.7
million barrels per day, and petroleum product
sales were 8.3 million barrels per day. Worldwide,
we market products under the Exxon, Mobil,
and Esso brands.

Chemical. ExxonMobil is one of the leading


manufacturers of petrochemicals with operations in
50 wholly owned and joint-venture facilities around
the world. The company is one of the largest producers of olens. This basic petrochemical building
block is a raw material for products used in a variety
of consumer applications including packaging,
automobile parts, and household goods. We are
also the largest producer of polyolens, which
include polyethylene, the largest-volume plastic; and
polypropylene, one of the fastest-growing polymers.
More than 90 percent of our chemical capacity
is employed in businesses where we rank rst or
second in market share by worldwide volume.
Technology. ExxonMobil maintains one of the
industrys largest research and development efforts
with more than $700 million spent in 2005 and
$3.2 billion since 2001. We emphasize proprietary
solutions that solve critical business challenges
and pursue research into proprietary breakthrough
technologies that will not only enhance existing
businesses, but also provide step changes in
ExxonMobils competitive position.
ExxonMobil is a publicly traded company. The New
York Stock Exchange (NYSE) is the principal exchange
on which Exxon Mobil Corporation common stock
(symbol XOM) is traded. More information on our
structure and operations can be found on our Web
site at exxonmobil.com.

2005 operational highlights

7
15

13

5
9

24

14

12

16

10
11

17
6

Alberta, Canada

Filed regulatory application


for the phased development of the Kearl tar-sands
mining project.
2

Baton Rouge, U.S.

Announced expansion
of the worlds largest
isopropyl alcohol plant.
3

Gulf Coast, U.S.

Obtained permits for


the Golden Pass and
Vista del Sol LNG
receiving terminals.
4

Beaumont, U.S.

Two new cogeneration


trains started up, each
with 160 megawatts of
capacity. Cogeneration
reduces greenhouse
gas emissions.

Piceance Basin, U.S.

Initiated a project using


multi-zone stimulation
technology, beginning to
bring the significant 35
trillion cubic feet (gross)
of Piceance Basin gas
potential to the U.S. market.
6

Brazil

Acquired 3D seismic data


in a 340,000-acre offshore
exploration block.
7

U.K. North Sea

Awarded 20 contiguous
blocks for exploration
covering 1.2 million acres,
the single largest award
in the U.K. North Sea
licensing history.

Milford Haven, Wales

Construction under way on


an LNG receiving terminal.
9

Libya

Successful bidder for


Contract Area 44, a large,
high-risk, high-potential
block in a new exploration
area offshore.
10 Nigeria/Sao
Tome and Principe

Acquired interest in
Block 1 of the Joint
Development Zone.
11

Angola

The deepwater Kizomba B


project started up and set
an industry record for the
fastest development time
for a project of its size
and complexity.

12

Qatar

RasGas LNG Train 4 and


the Al Khaleej Gas Phase
1 projects were completed
on schedule and started
production.
13

Azerbaijan

The Azeri-Chirag-Gunashli
Phase 1 project began
production from the
Central Azeri field.
14

China

Project development
activities continued on the
Fujian integrated refining,
petrochemical, and fuels
marketing joint venture.

15

Russia

The Sakhalin-1 (Chayvo)


Phase 1 project began
production using worldclass extended-reach
drilling technology.
16

Singapore

Announced study for a


second world-scale steam
cracker and associated
derivative units.
17

Australia

Signed framework
agreement in the Greater
Gorgon area, and design
continues on a project
that is planned to include
two 5-million-ton-peryear LNG trains.

Citizenship overview

Year in review
Highlights

Engaging in global
transparency initiatives
Page 15

Working to reduce our


worldwide GHG emissions
Page 24

Restoring operations after


Hurricanes Katrina and Rita
Page 40

Achievements
Safety and health
In 2005, ExxonMobil maintained its industry-leading
performance in workforce lost-time incident rate.
(Page 44)
Spills
In 2005, ExxonMobil recorded the fewest spills in
its history. (Page 31)
Human rights and security
ExxonMobil implemented its Framework on Human
Rights and Security in seven targeted countries,
providing corporate principles and expectations
for managing security relationships with host governments and private security providers. (Page 62)
Greenhouse gas (GHG) management
The company implemented business processes to
ensure compliance with emerging greenhouse gas
(GHG) regulations in Europe. Globally, we continued
efforts to reduce emissions through investment in
cogeneration, aring reduction, and energy efciency
projects. (Page 24)
Investments
In 2005, ExxonMobil achieved record earnings
while delivering record distributions to shareholders,
making record capital investments, and investing
over $700 million in research and development.
(Page 14)
Transparency
In 2005, ExxonMobil entered into a Memorandum of
Understanding with the government of Kazakhstan
for the implementation of the Extractive Industries
Transparency Initiative. (Page 15)
6

Achieving industry-leading
safety and health
Page 44

Launching the Educating


Women and Girls Initiative
Page 66

Educating Women and Girls Initiative


In 2005, the company launched the Educating
Women and Girls Initiative in eight countries. The
initiative is designed to help reduce a major barrier
to economic growth by providing women in developing countries greater access to education and
training. (Page 66)
Workplace flexibility and diversity
The Workplace Flexibility Program was updated in
2005 to enhance employees ability to achieve an
effective work-life balance. In addition, the Working
Globally program was implemented to help bridge
cultural gaps in our global work teams. (Page 53)

Challenges
Fatalities and injuries
Tragically, we had three employee and ve contractor
fatalities in 2005. Consistent with our vision of Nobody
Gets Hurt, we are working to learn from these incidents and prevent them in the future. (Page 44)
Maintaining momentum in energy efficiency
We face a challenge in continuing our pace of
signicant energy efciency improvements year after
year. Adding cogeneration capacity and identifying
energy efciency improvements through our Global
Energy Management System are ways we work to
continue the pace of improvements. (Page 24)
Skills development
Our company faces the challenge of increased global
competition for highly-skilled scientists and engineers. We continue to invest in initiatives to increase
the number of students pursuing degrees in these
areas, with a special focus on minorities and women.
(Page 52)

Performance data
2002

2003

2004

2005

Net income (billions of dollars)

11.5

21.5

25.3

36.1

Sales and other operating revenue (billions of dollars)

201

237

291

359

Capital and exploration expenditures1 (billions of dollars)

14

16

15

18

Total assets at year end (billions of dollars)

153

174

195

208

Financial and operating

Return on average capital employed 1 (percent)

Total long-term debt at year end (billions of dollars)

13.5

20.9

23.8

31.3

Oil-equivalent production (millions of oil-equivalent barrels daily)

4.2

4.2

4.2

4.1

Renery throughput (millions of barrels daily)

5.4

5.5

5.7

5.7

7.8

8.0

8.2

8.3

Natural gas production available for sale (billions of cubic feet daily)

Petroleum product sales (millions of barrels daily)

10.5

10.1

9.9

9.3

Chemical prime product sales (millions of metric tons)

26.8

26.6

26.6

27.8

Taxes to governments 2 (billions of dollars)

64

75

87

99

Distribution to shareholders 1 (billions of dollars)

10

12

15

23

Benets to employees (billions of dollars)


wages, salaries, pensions and other benets
Spending with suppliers (billions of dollars)

11

11

12

114

128

162

211
3

Safety
Fatalities employees

Fatalities contractors

19

Lost-time incident rate employees (per 200,000 work hours)

.083

.070

.043

.063

Lost-time incident rate contractors (per 200,000 work hours)

.088

.082

.062

.054

Lost-time incident rate workforce (per 200,000 work hours)

.086

.076

.053

.059

Recordable incident rate employees (per 200,000 work hours)

.54

.41

.39

.37

Recordable incident rate contractors (per 200,000 work hours)

.58

.56

.42

.45

Environment
Number of hydrocarbon spills > 1 barrel, marine vessels (operated & leased)
Number of hydrocarbon spills > 1 barrel, all other

567

465

474

370

Hydrocarbons spilled, thousand barrels

37.4

22.3

59.9

12.2

Controlled hydrocarbon discharges to water, metric tons

2350

2345

2175

2005

Volatile organic compounds emitted, thousand metric tons

347

386

395

363

Volatile organic compounds emitted, metric tons per 100 metric tons of throughput
Upstream

.060

.078

.086

.084

Rening

.031

.030

.023

.018

Chemical
Greenhouse gas emissions (direct equity CO2-equivalent), million metric tons

.065

.060

.059

.049

133.5

136.8

138.5

138

Greenhouse gas emissions, (direct equity CO2- equivalent, excluding cogeneration),


metric tons per 100 metric tons throughput
Upstream

20.5

22.7

21.5

21.2

Downstream

18.6

18.2

18.3

17.3

Chemical

44.3

43.2

41.6

45.8

Hydrocarbon aring (production & rening), million standard cubic feet per day

461

612

746

819

Energy intensity, normalized versus GEMS 3 base year (2000) rening

98.7

97.4

94.7

93.2

Energy intensity, normalized versus GEMS 3 base year (2001) chemical steam cracking

100

98

93

92.7

Cogeneration capacity, megawatts

2900

2900

3300

3700

Environmental expenditures (millions of dollars)

2343

2803

2854

3330

Employees
Number of regular employees (thousands)

92

88

86

84

Percent of workforce non-U.S.

62

61

62

63

Percent new professional hires non-U.S.

60

64

78

73
133

Social
Community investment (millions of dollars)

92

103

106

U.S.

71

73

70

81

Rest of world

27

30

36

52

.5

.3

.3

.3

Corporate political contributions (millions of dollars)


1
2
3

See Frequently Used Terms posted on the Investor Information section of our Web site, exxonmobil.com/fut
Income, excise, and other taxes
Global Energy Management System (GEMS)

Citizenship overview

Citizenship perspective
Integrating trends and objectives

Citizenship at ExxonMobil means meeting the worlds growing demand for energy
in an economically, environmentally, and socially responsible manner. We identify
our most important citizenship issues through the integration of our business
standards and objectives with external needs and trends. Through this lens, we
assess our citizenship performance and opportunities for continuous improvement.

Every day, ExxonMobil

Elements of
citizenship success:

serves the
energy needs of millions of people around the world.

Consistent business
success

Our long-term business success is tied to meeting growing energy demands in an economically,
environmentally, and socially responsible manner.
Consistent with our belief that the way results are
achieved is as important as the results themselves,
our corporate-wide management systems are
designed to ensure that citizenship is integrated
into our business practices.

Ethical conduct
Fiscal responsibility
Health and safety
of our workforce
and operations
Improving our
environmental
performance
Cultivating talent
and diversity
Listening and
responding to
concerns
Helping improve
the quality of life
in communities in
which we operate

While our management systems govern our


approach to corporate citizenship, we identify
our most important citizenship issues in the context of our business standards and objectives,
discussions with experts outside our company,
and evaluation of emerging external trends.

Opinion leader dialogue process

Opinion leader
identification

Methodology:
Open dialogue with
senior management under
Chatham House rule

Corporate
responsibility issues:
Social, environmental,
governance

Follow-up

Biannual
roundtables:
North America,
Europe, Asia, Africa

Engagement
Many people and organizations have an impact on
our business, just as we impact many individuals and
communities. We believe constructive engagement
with customers, partners, shareholders, governments,
nongovernmental organizations (NGOs), and others is essential to helping identify and manage key
issues. By listening to interested parties and sharing
our views, we seek to improve our decision-making
processes, anticipate and respond to changing
expectations, and maintain a balanced perspective
on the issues affecting our business and society.

Interaction with a variety of interested parties


takes many forms. These include shareholder meetings, community meetings, print publications, Web
content, and partnerships with NGOs. In addition
to day-to-day interaction with many parties, we also
hold ongoing, periodic dialogues on corporatewide issues with opinion leaders and NGOs in North
America, Europe, Africa, and the Asia Pacic region.
This process, illustrated in the above schematic,
provides an opportunity to discuss a variety of topics,
including governance, the environment, energy,
and social issues.

Communication and engagement

Government &
communities

Shareholders

Customers

200

6.1 billion

Drivers fueled per day


at retail chains

2.5 million

1million

Countries and territories

45

Shares

Refineries
(ownership interest)

Individual shareholders

50

Institutional shareholders

Chemical plants

2000

10 million

Industrial and
wholesale customers

35,000

Retail outlets in
nearly 100 countries

Suppliers

175,000

Total suppliers

2500

U.S.-based minority- and


women-owned suppliers

$211 billion

Meetings with analysts


and major shareholders

Customer feedback
programs

Supplier diversity
program

Interaction with
governments

Shareholder dialogues

Customer service
organizations

Provide financial
sponsorships to
minority and
women councils

Social and Environmental


Impact Assessments

Quarterly earnings
communications
Proxy statement

Internet communications

Securities and Exchange


Commission filings

Customer surveys

Shareholder magazines

Partnerships in local
associations

Annual Report

Local publications,
Web sites

Annual shareholders
meeting

Speakers forums at
universities, community
and business organizations
worldwide

Financial and
Operating Review

E-mail address
citizenship@ exxonmobil.com
Corporate Citizenship
Report
exxonmobil.com

Consumer care programs

Annual analyst meeting


Tomorrows Energy
report on future energy
trends

Customer seminars and


symposia events
Monthly e-publications
to select U.S. distributors
and customers
Interactive
conference calls
exxonmobil.com

84,000

Global workforce
(approximately)

Total annual purchases

Community consultation
and feedback mechanisms

Opinion leader dialogues


(with NGOs and other
organizations) on specific
issues

Employees

Participate in
minority and women
outreach at trade
shows in key areas
Award scholarships for
minority- and womenowned businesses
Mentor suppliers in
negotiation and business
plan development
exxonmobil.com

Employee forums
Labor management
committees
Confidential hotline
Employee diversity
network groups
Diversity management
councils
Union representation
Joint industry councils
Joint health and safety
committees
Employee human
resources intranet sites
Corporate Citizenship
Report
Local publications, e-mail
Corporate intranet site

Corporate Citizenship
Report
exxonmobil.com

Citizenship overview

Energy outlook
Growing global energy demand

Oil growth led by Non-OECD1 transport demand

Oil
Gas
Coal
Other
(Millions of barrels per day oil-equivalent)
% = Average growth/year 2000-2030

Transportation
Other uses
(Millions of barrels per day)

OECD

300

Non-OECD

60

1.6%
1.8%

200

40

100

20

1.8%

1.4%

0
1980

Addressing
energy trends
ExxonMobil is working
to develop and provide
stable, reliable, and
affordable energy
supplies. Technology
advances remain critical
in this effort, and
represent an area where
ExxonMobil has long
been the industry leader
with a history of
invention. In 2005, we
invested more than
$700 million in research
and development,
balanced between
technology extensions,
which can be rapidly
deployed, and breakthrough research in
areas that can help
bring success in meeting
the worlds long-term
energy challenges.

2005

2030

Each year, ExxonMobil prepares a


detailed global energy outlook, now extending to the
year 2030, available at exxonmobil.com/energyoutlook.
While we consider past experience, we also evaluate
new technologies and trends, as well as insights from
a wide variety of experts such as the International
Energy Agency, the U.S. Department of Energy, and
the European Commission. The result is an understanding of the fundamentals that underpin the
worlds growing energy needs.
Developing nations, growing needs. Like others,
our outlook recognizes that energy is vital to economic progress. Billions of people in developing
nations seek to improve their standard of living. In
these areas, energy needs today are as fundamental
as they are great close to 1.6 billion people lack
access to electricity, and more than 2 billion still use
traditional fuels such as wood and dung for heating
and cooking.
Over the next 25 years, the global population will
increase by 25 percent to a total of 8 billion with
nearly 95 percent of this growth in developing countries. At the same time, the global economy is likely to
double in size, led by rapidly expanding economies
such as China, India, Indonesia, and Malaysia.
Energy demand increases significantly. In concert
with this economic growth and expanding population, we expect worldwide energy demand to rise by
nearly 50 percent by 2030. About 80 percent of the
increase in energy demand will occur in developing
countries. Perhaps most signicant, we anticipate
that by 2030, the developing nations in Asia alone
will account for roughly one-third of global energy

10

1980

2005

2030

1980

2005

2030

demand, equivalent to North America and Europe


combined. This energy is essential, not only to nations striving for economic progress in the global
economy, but also to improved health, education,
and work opportunities for billions of individuals
around the world. With this progress, we also expect
environmental conditions will continue to benet
from broader use of modern, efcient, and cleaner
energy technologies.
Energy efficiency is important. As demand rises,
energy efciency will become increasingly important,
with the pace of efciency improvements and innovations likely to accelerate. We expect strong annual
gains in efciency through increased investment and
innovation. While the biggest opportunities for improvement lie with developing countries, developed
nations will also accelerate the rate of improvement
primarily through advances in personal transportation and power generation, driven by new technologies, as well as gains in the residential, commercial,
and industrial sectors.
Fossil fuels predominate. Over time, an increasingly
diverse range of energy sources and technologies
will be needed. But at least through 2030, fossil fuels
will continue to satisfy the vast majority of global
demand. These are the only fuels with the scale and
exibility to meet the bulk of the worlds vast energy
needs over this period.
Growth in oil demand will be driven by increasing
transportation needs, especially in developing countries. However, signicant improvements in vehicle
fuel economy will dampen demand growth as advanced automotive fuel and engine systems deliver
substantial efciency and emissions gains.

Energy demand by region: 2000& 2030

334

Non-OECD1
OECD
(Millions of oil-equivalent barrels per day)
% = Average annual growth rate

205

World totals

1.6%

per year

18

57

37

68

47

27

Russia/Caspian

+1.3%

113

Europe

+0.8%

North America

11

+0.6%

19

44

18

Latin America

+2.2%

Natural gas will continue to grow in importance,


reecting its environmental benets and efciency
in electricity generation. Resources to meet growing demand are adequate and diverse; technology
advances will help enable strong growth of liqueed
natural gas (LNG) supplies for major markets.
Coal use will also increase, most notably in countries
with large, indigenous resources, particularly in Asia.
The use of wind, solar power, and biofuels will continue to grow rapidly. We expect that together they
will supply about 2 percent of total world energy
demand by 2030.
Growing demand and the expected energy mix to
supply that demand will result in increased carbon
dioxide (CO2) emissions. We expect annual growth
in CO2 emissions from 2000 to 2030 to average 0.5

11

19

23

Asia Pacific

Middle East

+1.9%

17

Asia Pacific

+0.9%

+3.2%

Africa

+2.0%

percent in the developed countries compared to 2.7


percent in developing countries, which will account
for 85 percent of the total global increase.
Technology plays a key role. While global resources are sufcient to meet demand, access and
timely investments to develop new supplies remain
critical. In addition, technology will play a vital role in
meeting the energy challenges ahead. ExxonMobil
is continuing to develop and utilize advanced technologies to ensure adequate supplies. Examples
include sophisticated reservoir imaging, enabled by
increased computing power, which allows the identication of previously unknown oil and gas deposits.
In addition, deepwater exploration technology and
extended-reach drilling allow the industry to pinpoint and access previously inaccessible resources.

1
For the purpose of this report, the phrases developing countries and Non-OECD countries are interchangeable. OECD countries refer
to member states of the Organization for Economic Cooperation and Development.

11

Section one

Economic responsibility
Focus areas

Deliver returns
ExxonMobil pursues a highly
disciplined investment
approach to identify and
select the most attractive
investment opportunities
in all phases of the economic cycle. This approach
has delivered pacesetting
prots in 2005 and a return
on capital employed that
exceeded 31 percent.

Rated above

96

of other oil and


gas companies on
corporate governance
Institutional Shareholder
Services rated ExxonMobil
above 96 percent of other
companies in the oil and
gas industry on corporate
governance.

Contribute to
economic progress

Manage good
governance

Support
transparency

In 2005, we made
payments of $363 billion
to employees, suppliers,
and governments.

In 2005, ExxonMobil
scored consistently high
marks in ratings on
governance issues among
corporations in general
and within the oil and gas
industry in particular.

ExxonMobil has been


constructively involved
in a number of important
transparency initiatives.

In 2005, we continued our long


tradition of contributing to economic progress and
development through payments and expenses of
$363 billion:

billion in dividends and share purchases to


reduce shares outstanding.

Sound nancial controls are fundamental to our


operating model, and we use a rigorous, systematic
approach to apply those controls. Our System of
Management Control Basic Standards denes the
basic principles, concepts, and standards that drive
our business controls across worldwide operations.
We assess nancial control risks, establish procedures for mitigating concerns, monitor conformance
with standards, and report results to management
using our Controls Integrity Management System.

Management systems

Corporate governance

ExxonMobils straightforward business model,


high standards of integrity and legal compliance,
governance practices, and management control
systems are key to achieving long-term sustainable performance.

Corporate governance is a core strength of


ExxonMobil, a fact validated by governance ratings
in the past year. Institutional Shareholder Services
rated the company above 96 percent of other
companies in the oil and gas industry on corporate
governance issues, and above 73 percent of the
S&P 500. GovernanceMetrics International gave
ExxonMobil a rating of nine (out of a possible 10)
on corporate governance indicators for 2005.

Operations

generated $99 billion in taxes to local,


state, and national governments;
$211 billion
$12

in payments to suppliers;

billion in wages and benets to employees;

$18 billion in capital and exploration


expenditures; and,
$23

Our Standards of Business Conduct form the framework by which we operate in nearly 200 countries
and territories around the globe, providing each
of our employees with principles for managing dayto-day compliance with the Corporations Standards.
The Standards include guiding principles, 16 foundation policies, and procedures and open-door
communication expectations. ExxonMobil employees must review the policies annually and apply
them to all aspects of their work. In addition, each
non-employee director must certify annually his or

12

her compliance with the duties and obligations


applicable under the Standards, as well as the
Corporations Corporate Governance Guidelines
and New York Stock Exchange listing standards.

Policies and practices. A number of clearly


articulated policies and practices reect the
companys long-standing commitment to high
ethical standards:
10

of the Corporations 12 directors are


independent;

Only independent directors serve on the Board


Affairs, Compensation, Audit, Public Issues, and
Contributions Committees;
The

Board conducts executive sessions involving only independent directors after each regularly
scheduled Board meeting. These sessions are
presided over by the Chairs of the Board Affairs
and Compensation Committees on a rotating basis,
depending on the primary subject matter under
discussion; and,

Key

Board committees meet between 6 and 11


times per year, as follows: Audit (11), Compensation
(9), and Board Affairs (6).

Citizenship and the Board. Corporate citizenship


issues are governed by the full Board and its committees on Public Issues, Board Affairs, Contributions,
Compensation, and Audit. For example:
The

Public Issues Committee reviews safety, health,


and environmental performance, and discusses key
issues including management of climate change risk;
The

Public Issues Committee visits an operating


site each year, often with an environmental oversight
element as part of its agenda;
The Board Affairs Committee recommends
nominees for election to the Board, and discusses
developing trends in corporate governance;
The

Board Advisory Committee on Contributions


reviews the contributions strategy and budgets;
The

Audit Committee preapproves all audit and


non-audit services to be provided by the independent auditors; and,
The

Compensation Committee reviews and


approves goals and objectives relevant to CEO
compensation and evaluation.
Internal controls over financial reporting.
ExxonMobils governance practices and nancial
controls meet the requirements of the SarbanesOxley Act and the NYSE listing standards. As part
of the companys 2005 nancial statements, management issued a report on internal controls over
nancial reporting as required by Sarbanes-Oxley
that concluded that our internal controls system
is effective. Independent, registered auditors
PricewaterhouseCoopers LLP conrmed this
assessment by rendering an unqualied opinion
on the effectiveness of our internal control system
over nancial reporting.

Board of Directors
Michael J. Boskin
T.M. Friedman Professor of Economics and
Senior Fellow, Hoover Institution, Stanford
University
William W. George
Professor of Management Practice,
Harvard Business School; Former Chairman
of the Board and Chief Executive Ofcer,
Medtronic, Inc. (a medical technology company)
James R. Houghton
Chairman of the Board and Chief Executive
Ofcer, Corning Incorporated (communications,
advanced materials, and display products)
William R. Howell
Chairman Emeritus, J.C. Penney Company, Inc.
(department store and catalog chain)
Reatha Clark King
Former Chairman of the Board of Trustees,
General Mills Foundation, the philanthropic
foundation of General Mills, Inc. (manufacturer
and marketer of consumer food products)
Philip E. Lippincott
Retired Chairman and Chief Executive Ofcer,
Scott Paper Company (sanitary paper, printing
and publishing papers, and forestry operations);
Retired Chairman of the Board, Campbell
Soup Company (manufacturer and marketer
of branded convenience food products)
Henry A. McKinnell, Jr.
Chairman of the Board and Chief Executive
Ofcer, Pzer Inc (pharmaceuticals)
Marilyn Carlson Nelson
Chairman and Chief Executive Ofcer, Carlson
Companies, Inc. (travel, hotel, restaurant,
cruise, and marketing services)
Samuel J. Palmisano
Chairman of the Board, President, and Chief
Executive Ofcer, International Business
Machines Corporation (computer hardware,
software, business consulting, and information
technology services)
Walter V. Shipley
Retired Chairman of the Board, The Chase
Manhattan Corporation and The Chase
Manhattan Bank (banking and nance)
J. Stephen Simon
Senior Vice President
Rex W. Tillerson
Chairman and Chief Executive Ofcer

Standing
committees
of the Board
Audit Committee
J.R. Houghton (chair)
W.R. Howell
R.C. King
P.E. Lippincott
H.A. McKinnell, Jr.
Board Advisory
Committee on
Contributions
M.C. Nelson (chair)
W.W. George
W.R. Howell
R.C. King
S.J. Palmisano
Board Affairs
Committee
W.V. Shipley (chair)
M.J. Boskin
W.W. George
P.E. Lippincott
H.A. McKinnell, Jr.
Compensation
Committee
W.R. Howell (chair)
J.R. Houghton
R.C. King
S.J. Palmisano
W.V. Shipley
Finance Committee
R.W. Tillerson (chair)
M.J. Boskin
J.R. Houghton
P.E. Lippincott
M.C. Nelson
S.J. Palmisano
Public Issues
Committee
M.J. Boskin (chair)
W.W. George
H.A. McKinnell, Jr.
M.C. Nelson
W.V. Shipley
Executive
Committee
R.W. Tillerson (chair)
J.R. Houghton
W.R. Howell
P.E. Lippincott
M.C. Nelson

13

Economic responsibility
In October 2005,
ExxonMobil was
among the rst energy
companies to sign a
Memorandum of
Understanding with
the government of
Kazakhstan upholding
the transparency of
payments from oil and
gas revenues. Signing
for the Corporation
was ExxonMobil
Kazakhstan Inc.
General Manager
David Willis.

2005 Distribution of receipts


(U.S. dollars, all figures rounded)

Dividends and
net share purchases
to shareholders
$23 billion

Capital and
exploration
expenditures
$18 billion

Taxes and
duties to
government
$99 billion

Payments
to suppliers
$211 billion

Wages
and benefits
$12 billion
Total: $363 billion

Mineral revenues stewardship award. The U.S.


Department of the Interiors Minerals Management
Services (MMS) selected Exxon Mobil Corporation to
receive its 2005 Mineral Revenues Stewardship Award.
The award is in recognition of the Corporations
exceptional performance in reporting oil and gas
production and paying royalties for mineral leases on
federal and Indian lands. It honors ExxonMobil for
overall accuracy and timeliness of its payments and
reports, as well as for its cooperation and responsiveness to compliance and enforcement requests.
For more information on corporate governance,
go to exxonmobil.com/governance.

Shareholders
Half of ExxonMobils common stock is owned by
some 2.5 million individual shareholders with the
remaining half owned by institutions. Our nancial
success is good news for these individual shareholders and the millions more who own shares through
their pension plans, insurance, and mutual funds.
Our strategy is to deliver superior shareholder value
by efciently managing our business and rigorously
evaluating new investments. This approach produces
strong earnings and cash ows, which provide the
basis for business investments and distributions to
shareholders through dividend payments and share
purchases. ExxonMobil stock has consistently outpaced the S&P 500 Index over the past ve-, 10-, and
20-year periods.
Investment approach. ExxonMobil pursues a
highly disciplined investment approach to identify
and select the most attractive investment opportunities in all phases of the economic cycle. We test

14

potential investment opportunities over a wide


range of economic scenarios. Post-investment, we
complete a rigorous appraisal process to incorporate
improvements into future planning. Our approach
is based on an in-depth understanding of supply
and demand for each business, and is sensitive
to the fact that investment decisions can impact
results for decades.
ExxonMobils level of investment is driven by the
careful selection of quality, long-term opportunities, not short-term volatility in the price of oil.
The Corporation has reinvested $210 billion in its
business over the last 15 years, essentially matching
earnings, and recorded a capital investment in
2005 of $18 billion.
Shareholder distributions and returns. Over
the long term, successful business investments
and efcient operations should translate into share
price appreciation which, combined with dividends,
provide superior total shareholder return.
ExxonMobil has paid dividends for more than
100 years, and annual dividends per share have
increased in each of the past 23 yearsa record
among international oil companies. We distributed
$23 billion in 2005 to shareholders in the form of
dividend payments and share purchases to reduce
shares outstanding, an increase of more than 50
percent over 2004.
Since 2001, we have distributed more than $71 billion
to shareholders in dividends and net share purchases.
The share buyback program has reduced shares
outstanding by 11.5 percent and positively impacted
2005 earnings per share by $0.56 per share.

Our shareholders have beneted from our consistent


nancial and operating performance by the unique
combination of high returns with low relative risk.

In Chad, vast areas of the


country are cut off during
the rainy season due to
ooding. This bridge,
near Ham, was built with
oil revenue allocated on
an emergency basis to replace a collapsed bridge,
which cut off access for a
wide region that depended on the bridge to reach
the main highway to the
capital at NDjamna.

Shareholder engagement. ExxonMobil management dialogues with institutional and individual


shareholders throughout the year to discuss the
Corporations performance and positions as well
as to listen to concerns. We communicate with
our shareholders at annual analyst and shareholder
meetings, quarterly earnings teleconferences,
periodic Web-casts on special topics, as well
as through conferences, shareholder dialogue sessions, and our publications.
In 2005, we met with specic groups of shareholders involved in socially responsible investing (SRI)
including labor unions (AFL-CIO, building trades);
SRI funds (Walden Asset Management, F&C Asset
Management, Christian Brothers Investment Services,
Green Century Capital Management, Interfaith
Center for Corporate Responsibility); state pension
funds (California, New York); and NGOs (Amnesty
International, People for the Ethical Treatment of
Animals). Our constructive dialogues covered a
range of citizenship issues from climate change
and biodiversity to human rights and community
engagement. These dialogues are valuable and
we plan to continue them in 2006.
Shareholders and other interested parties can send
communications to individual directors or to nonemployee directors as a group, either in writing to
the corporate address or by e-mail from the corporate governance page of our Web site at any time:
exxonmobil.com/directors.

Transparency
ExxonMobil supports transparency, opposes corruption, and is committed to honest and ethical
behavior wherever we operate. Transparency is
fundamental to good governance, and can help
eradicate corruption and ensure that a countrys
revenues are used to provide a better standard of
living for its citizens.
Disclosure and consent. Sovereign host governments have the right to set rules for the disclosure
of taxes and other nancial obligations paid to them
by companies such as ExxonMobil. Where disclosure
is limited, we respect our contractual obligations
and host-government laws. Gaining consent from
host governments for increased disclosure requires
government-to-government dialogue, along with

the assistance of international nancial institutions


(IFIs). ExxonMobil has been actively involved in this
dialogue and is ready to further this process among
governments and IFIs.
To be successful, any transparency initiative must
meet three key criteria. First, it must apply to all
companies seeking to do business within a country.
Second, it must protect truly proprietary information.
Finally, it must not breach contractual obligations
or violate host-country laws.
Transparency agreements. ExxonMobil has agreements with ve governments regarding transparency of payments: Chad (1999); Azerbaijan (2004);
the Joint Development Zone of Nigeria/Sao Tome
and Principe (2004); Kazakhstan (2005); and Nigeria
(2005). Payments to the Chadian government have
been posted on the World Bank Web site since rst
oil in 2003. Payment of a signature bonus for the
award of Block 1 was made public by the government of Sao Tome and Principe in 2004. Azerbaijan
has published reports on its oil and gas revenues
for 2003 and 2004. Kazakhstan is in the initial stages
of implementing the U.K. Extractive Industries
Transparency Initiative (EITI), and should publish
its rst report covering the years 2004 and 2005 in
mid-year 2006.
ExxonMobil also remains constructively involved in
the dialogue regarding the EITI. We have offered
encouragement to the government of Nigeria as it
simultaneously proceeds toward implementation of
both the EITI and the G-8 Transparency Initiative. We
have also offered our support to the government
of Equatorial Guinea and the World Bank as they

15

Economic responsibility

2005 business performance highlights


Record earnings of $36.1 billion, highest in the history of the Corporation
with strong contributions from all segments of the business;

$18 billion invested in the business, about 20 percent more than prior year
and over 40 percent more than 2001;

Dividends exceeded $7 billion while share purchases to reduce shares


outstanding grew by $8 billion to $16 billion for total distributions to shareholders of $23 billion, bringing cumulative distributions to shareholders
since 2001 to more than $71 billion;
Total liquids and gas production available for sale was 4.1 million
oil-equivalent barrels per day, exceeding all competitors;
Renery throughput was 5.7 million barrels per day, highest since 2000
following the merger;

Petroleum product sales were 8.3 million barrels per day, highest since
2000 following the merger; and,

Petrochemical prime product sales volume was 26.8 million tons, secondbest year ever, and 4 percent lower than the 2004 record.

proceed to implement EITI in that country. We stand


ready to engage with other countries as they make
known their intentions to implement transparency
initiatives as well.
Update: Chad revenue management plan.
In 1999, the government of Chad and the World
Bank put in place an unprecedented Revenue
Management Plan (RMP) for the allocation of oil royalties, including monitoring by representatives of civil
society. Under the provisions of the RMP, 72 percent
of oil development royalties are to be used for social
development projects. Since rst oil in 2003, more
than $420 million in revenues has been managed
in accordance with the plan. Esso Chads role under
the law has been to transparently report revenues
paid into an offshore escrow account.
The International Monetary Fund estimated that
spending in the four priority sectors tripled by the
end of 2005 versus the era prior to oil development.
Progress on priority sector projects is limited only by
the capacity of the country to identify and implement
projects approved by the Revenue Management

16

College, a nine-member panel of citizens that


ensures adherence to the established allocations.
To date, the college has managed about 150
projects in various stages of completion.
In late 2005, the government of Chad, facing signicant nancial difculties, began a review of the RMP
which concluded with a change in the law. These
changes include: 1) increasing the percent of oil
royalties available to the government for discretionary spending; 2) eliminating the Future Generations
Fund; 3) expanding the priority sectors to include
justice, security, and territorial administration; and,
4) specifying that oil royalties generated by elds
outside the original three producing elds will come
under the auspices of the RMP. The changes to the
RMP have led to discussions between the Chadian
government and the World Bank.
ExxonMobil is supportive of the dialogue between
the World Bank and the Chadian government to
address nancial difculties. ExxonMobil continues
to believe that the overall structure and framework
of the RMP are sound and should be retained.

Customers
ExxonMobil is continually researching and striving
to understand evolving customer needs and preferences as well as to respond to consumer concerns.
We regularly evaluate our products to identify potential risks to employees, customers, or the environment. As detailed on pages 48 51, we maintain
a robust product stewardship process through our
product safety policy. In addition, we recognize that
gasoline price volatility has been a major issue for
our retail customers in 2005.

Capital management
We view our nancial strength as a key competitive
advantage. ExxonMobils long-term debt securities
have maintained the top credit rating from major
credit-rating agencies for 87 consecutive years. And
in 2005, our cash balances were well in excess of
debt. We are, in fact, one of the few AAA/Aaa-rated
U.S. nonnancial corporations.

Cumulative shareholder distributions


Distributed over $71 billion to shareholders over last 5 years
Cumulative share buybacks*
Cumulative dividends

75

($ billions)

50

25

0
2001

2002

2003

2004

2005

*Net of shares purchased to offset dilution associated with benefit plans

ExxonMobils sound nancial position gives us the


opportunity to access the worlds capital markets
efciently across the full range of market conditions,
and to take advantage of business opportunities
whenever they arise.

Suppliers and contractors


ExxonMobil strives to grow procurement of goods
and services from qualied, competitive local suppliers as a means to strengthen local economies in
the communities where we operate. For example,
in Sakhalin in 2005, we awarded contracts valued at
over $150 million to Russian companies supporting
our development and production operations, bringing our total contracting with Russian suppliers over
the last 10 years to $3.2 billion.
In 2005, we purchased goods and services, including
crude oil and products, valued at $211 billion globally. In addition, we spent $18 billion on capital and
exploration expenditures.
Responsible supply chain management.
Responsible supply chain management is important
to ExxonMobil. We contractually require our suppliers to comply with all applicable environmental,
health, safety, and labor laws for themselves and
their subcontractors. Safety management criteria and
adherence to our drug and alcohol policies are also
written into contracts with suppliers. Compliance is
monitored through site visits and assessment procedures. Furthermore, we encourage our contractors
and suppliers to conduct business consistent with
our Standards of Business Conduct.

Support for minority- and women-owned


businesses. ExxonMobil purchased materials and
services from more than 2500 U.S.-based minorityand women-owned businesses in 2005. Many of
these suppliers are located in communities where
ExxonMobil has a signicant business presence, such
as Texas, Virginia, and the Gulf Coast of the United
States. Purchasing from minority- and womenowned businesses not only brings quality and
competitive pricing to ExxonMobil, but also helps
strengthen the communities where we live and work.
In the United States, our Supplier Diversity Program
ensures that qualied minority-owned and womenowned suppliers are included in our procurement
sourcing process. We manage supplier diversity in
our procurement planning as well, by establishing
objectives within each commodity and service
area to guide us.
In addition to offering contract opportunities to
minority- and women-owned businesses, ExxonMobil
funds scholarships for minority and women suppliers to attend the University of Virginias Darden
Graduate School of Business Administration,
Northwestern Universitys Kellogg Graduate School
of Management Executive Program, and The
University of Texas Executive Education Seminar.
ExxonMobil senior executives, buyers, and supplier
diversity advocates serve on regional councils and
committees dedicated to supplier diversity development and providing training to suppliers in negotiation, business plan development, and accounting.

Economic
priority areas for

2006

Continue to invest in
nding, developing,
and delivering energy
supplies to meet
growing demand
while securing the
long-term future of
our company.
Maintain active
communication with
shareholders and the
investment community.
Further our active support of transparency,
through agreements
with Chad, Azerbaijan,
Sao Tome and
Principe, Kazakhstan,
and Nigeria.

In 2005, ExxonMobil was recognized by several


organizations in the United States for its minorityand women-owned supplier partnerships. Corporate
recognition included the Louisiana Minority Business
Council Corporation of the Year Award, the
Houston Minority Business Council Professional
Services Development Award, and listing on
DiversityBusiness.com as one of Americas leading
companies in promoting multicultural business
opportunities. In addition, ExxonMobil spent $135
million in 2005 with certied women-owned businesses in the Houston area, a 33-percent increase
over the previous year.

17

Section two

Integrity in our operations


Framework for performance

ExxonMobil has an unwavering commitment to high ethical standards, operations integrity, and flawless execution. This is embedded in our company culture
and implemented through our management systems. Our Standards of Business
Conduct form the foundation for this commitment, with 16 corporate policies in
addition to the company-wide expectations for open-door communication.

The 16 foundation
policies of
ExxonMobils
Standards of
Business Conduct

Equal
employment
opportunity

Ethics

Harassment
in the
workplace

Environment

Conicts
of interest

Gifts and
entertainment

Antitrust

Safety

Corporate
assets

International
operations

Customer
relations and
product quality

Product
safety

Alcohol and
drug use

Directorships

Political
activities

Health

Complete statements
regarding these policies can
be found in the ExxonMobil
Standards of Business
Conduct downloadable
from exxonmobil.com/sbc.

18

Building on this policy foundation, we rigorously apply management systems to drive performance. Our
Operations Integrity Management System (OIMS),
provides the framework for managing safety, health,
security, and environmental risks at our facilities
worldwide. Lloyds Register Quality Assurance attested in 2004 that OIMS meets all requirements of
the International Standards Organizations environmental management systems standards (ISO 14001),
and monitors ongoing performance annually.
OIMS is comprised of 11 elements, each with
clearly dened expectations that every operation
must fulll. These elements address all aspects
of safety, security, health, and environmental management from new project inception to ongoing
operations. It helps ensure that every operating
organization has the resources, skills, systems,
procedures, and tools to perform safely, reliably,
and with environmental care.

Operations Integrity
Management System (OIMS)
Safety, security, health,
and environment

OIMS is also the system we use to ensure appropriate engagement with the communities in which
we operate. Under OIMS, we conduct social and
environmental impact assessments for new projects,
and we use Best Practices in External Affairs (BPEA)
guidelines as a strategic planning and management
tool for operations around the world.
In addition, OIMS includes a detailed process for
ongoing improvement. Under OIMS, every operating unit undergoes a regular cycle of improvement
consisting of annual self-assessments and crossfunctional assessments every three to ve years.
Additionally, every ve years, we review OIMSs
overall effectiveness. For example, as a result of our
most recent review, we added new, more stringent
security system requirements.
OIMS is not simply a set of guidelines. Business line
managers at every location across the globe are expected to comply with all relevant OIMS requirements.

Applying OIMS
around the world

Operations

During 2005, over 150


assessments were performed at ExxonMobil
sites by teams both internal
and external to each site.

Clearly defined expectations

2. Risk assessment and management


Systematic reviews evaluate risks
to help prevent accidents.

3. Facilities design and construction

Information that is accurate, complete, and accessible


is essential to safe and reliable operations.

Dr

4. Information and documentation

io
at
lu
va

ive
r

Construction projects from small improvements


to major new expansions are evaluated early in their
design for safety, health, and environmental impact.

5. Personnel and training

1. Management,
leadership,
commitment, and
accountability
Employees
are held
accountable for
performance.

Meeting high standards of performance requires


that employees are well trained.

6. Operations and maintenance

Operations and maintenance procedures are


frequently assessed and modified to improve safety
and environmental performance.

7. Management of change

Changes must be evaluated for safety, health,


and environmental impact.

8. Third-party services

11. Operations
integrity
assessment and
improvement
A process that
measures
performance relative
to expectations is
essential to improve
operations integrity.

Safe, secure, and environmentally responsible


operations required.

9. Incident investigation and analysis

Any incident, including a near miss, is investigated.

10. Community awareness


and emergency preparedness

Good preparation can significantly reduce


the impact of an incident.

19

Section three

Environmental performance
Focus areas

Reduce spills

Improve efficiency

In 2005, we reduced our


spills to the environment
by 20 percent.

Through our Global Energy


Management System,
launched in 2000, we have
captured energy savings
that reduce CO2 emissions
by about 7 million metric
tons per year.

12

increase in
cogeneration
capacity

Our cogeneration capacity


increased by 12 percent
in 2005. In addition to
the emissions savings
captured by our Global
Energy Management
System, our total cogeneration capacity represents
a GHG reduction of 9
million metric tons, versus
conventional power and
steam generation.

Respond to climate
change risk

Develop new
technologies

ExxonMobil is taking
action on a global basis
to improve efciency,
reduce aring, and
develop technologies
that offer long-term
solutions.

In 2005, ExxonMobil
continued its ongoing
effort to develop and
deploy state-of-the-art
technologies to improve
environmental performance and reduce costs.

ExxonMobil is committed

to
operating responsibly everywhere we do business by
implementing scientically sound, practical solutions
to meet energy needs in an environmentally responsible manner. Throughout 2005, we have communicated our commitment in detail across all business
lines and at all levels.
It is our long-standing policy to conduct business in
a manner that considers both the environmental and
economic needs of the communities in which we operate. We seek to drive incidents with environmental
impact to zero, and to operate in a manner that is
not harmful to the environment.
Protect Tomorrow. Today. In 2005, ExxonMobil
senior management reinforced expectations to all
business lines for superior environmental performance. This leadership-driven initiative is called
Protect Tomorrow. Today.
In recent years, our businesses have continued to
improve environmental performance. Oil spills are
among the lowest in the industry, and cogeneration capacity, which boosts energy efciency in our
operations, is among the largest in the world. In
addition, we have developed and implemented
Environmental Business Planning (EBP) as part of
the annual business planning cyclean important
tool for managing environmental performance as
an integral part of each operation and project.
Building on this progress, senior management
launched Protect Tomorrow. Today. to provide
further guidance on corporate environmental

20

expectations, with the goal to continue improvement in our environmental performance. Specically,
business lines are expected to:
Deliver superior environmental performance,
leading to competitive advantage;

Drive environmental incidents with real impact


to zero; and,

Achieve industry leadership in key environmental


areas relevant to each business.

Environmental Business Planning (EBP)


EBP integrates environmental improvement into
overall business plans and strategies. Businesses are
expected to use EBP to identify key environmental
drivers, set objectives in key focus areas, and establish strategies, projects, and other actions to achieve
those objectives. For example, we are focusing on
reducing spills and improving water efuent quality
in our Downstream business, and reducing spills
and aring in our Upstream business.
In addition, site-specic sensitivities and focus areas
are identied and addressed as part of EBPs. For
example, in Norway, commercial shing and sh
farming play a dominant economic and societal role.
ExxonMobil follows a principle of coexistence with
other users of the sea, and works to accommodate
their environmental concerns into our environmental
business plans.
Similarly, our Japanese afliate, TonenGeneral, has
incorporated cohabitation strategies with neighboring tangerine farms into its business management

1.

Environmental
business planning
in refining:
a step-by-step
approach

4.

Assess
expectations of
management and
shareholders to establish
the overall vision of our
environmental leadership,
guided by our corporate
environmental policy
and expectations to
Protect Tomorrow. Today.

5.

2.

3.

Review

Consider

data for current


environmental
performance, including
emissions, incidents,
and regulatory
compliance.

drivers of future
environmental performance
including new regulations,
updated technologies,
community concerns,
internal and external
competitor performance,
and new projects.

6.

7.

Evaluate

Establish

Identify

Develop

data and drivers to


identify locally important
areas of environmental
improvement, potential
regional and global
environmental priority
areas, and possible sites
where performance
merits special attention.

global and regional priority


areas through management
review and communication
of targeted reductions
and completion dates for
environmental metrics.
Management also identifies
sites for conducting
performance improvement
assessments.

local Strategic Environmental


Focus Areas (SEFAs) based
on an assessment of sitespecific performance and
drivers, assessment of selected
environmental performance
indicators, and the sites
ability to make a significant
contribution to regional
or global priority area
improvement targets.

plans, with specific


improvement initiatives,
to deliver the desired
improvement in SEFAs.

8.

9.

10.

11.

Plan

Prepare

Review

Assess

resources for
improvement initiatives
and submit items
requiring approval into
the overall business
planning process.

environmental
performance indicators (EPIs)
and forecast accounting
for planned and potential
initiatives to confirm
improvement progress.

SEFAs, metrics, targets,


and forecasting with
top management to
calibrate the process for
the subsequent year.

results of prior
years activities against
plans and targets.

system at its Wakayama plant. The facility manages


the impact of its operations with particular attention to the environmental issues of nearby orchards.
Renery employees and farm owners team up to
share patrol, monitoring, and testing duties, and
proactively communicate their ndings to the neighboring community.
We also consistently seek to improve operations
reliability around the world. We use advanced
technology in new projects to continually improve
our safety and environmental performance. At many
of our reneries, including facilities in Baton Rouge,
Antwerp, and Rotterdam, we have embarked on a
major project to install advanced computer control
equipment to promote more stable and reliable
operations. These projects are expected to result
in fewer upsets and environmental incidents, and
greater safety, while creating a more efcient and
protable operation.

In populated areas our operating sites regularly engage with local communities to provide input to EBPs.
For example, our U.S. renery and chemical plants
meet frequently with community advisory panels,
made up of local ofcials and residents, to discuss operations and environmental and safety performance.
At our renery in Slagen, Norway, community concerns are being addressed by a project to reduce
both noise and nitrogen oxide (NOx) emissions. To
accomplish this, we are installing low NOx burners
in several process furnaces. We are also replacing
the are unit. By late 2007, we estimate that NOx
emissions will be halved from their pre-improvement
levels. Concurrently, we have decreased the noise
level in the noisiest areas of the renery by 25 percent, thereby reducing the noise impacts on the
local community.

21

Environmental performance
Change (IPCC) and numerous related scientic bodies. Contributed papers on climate science are listed
on our Web site.

In Japan, our afliate,


TonenGeneral has developed cohabitation
strategies with neighboring tangerine farms at
its Wakayama renery.
The facility factors the
environmental importance
of nearby orchards into
its operations, and shares
patrol, monitoring, testing,
and community reporting
duties with farm owners.

Based on this experience, we recognize that the


accumulation of greenhouse gases in the Earths
atmosphere poses risks that may prove signicant
for society and ecosystems. We believe that these
risks justify actions now, but the selection of actions
must consider the uncertainties that remain.

For new projects and developments, environmental


and social impact assessments are conducted that
review factors such as community concerns, sensitive
environmental habitats, and future regulatory developments. The assessment results are integrated into
project decision making.

Climate science
Managing the risks from increases in global greenhouse gas (GHG) emissions is an important concern
for ExxonMobil, industry, and governments around
the world. We support the public reporting of GHG
emissions on a consistent basis by all companies. We
advocate for policy decisions that consider the consequences not only for environmental risks, but also
for social and economic development, especially in
developing countries.
Our efforts to manage GHG emissions include
actions to reduce energy use and emissions in our
own operations as well as to help customers use
our products more efciently. We also work with the
scientic and business communities on leading research to identify economically viable technologies
that can meet future energy demand while dramatically reducing global GHG emissions. Examples
include our work in advanced fuels, lubricants, and
combustion technologies, as well as our support of
the Global Climate and Energy Project (GCEP) at
Stanford University, which represents the largest-ever
privately funded research effort in low-greenhousegas energy.
Climate science: what we know. ExxonMobil has
conducted and supported climate science research
for 25 years. Our work has produced more than 40
papers in peer-reviewed literature, and our scientists
serve on the Intergovernmental Panel on Climate

22

Our world has changed. Since the 1800s concentrations of carbon dioxide (CO2) in the atmosphere
have increased by roughly 30 percent (from 280 to
380 parts per million today). Concentrations of other
greenhouse gases have also increasedincluding a doubling of methane levels. Human activities
have contributed to these increased concentrations,
mainly through the combustion of fossil fuels for
energy use, land use changes (especially deforestation), and agricultural, animal husbandry, and
waste-disposal practices.
Surface temperature measurements have shown
that the average global temperature has risen by
about 0.6C since the mid-1800s. Other changes,
consistent with the surface temperature rise, have
also been observed. For example, scientists have
documented a decrease in the volume of mountain
glaciers and an increase in the length of growing
seasons. These observations have fueled concern
about the potential longer-term consequences of
climate change.
Climate science is complex. The complexity of
the climate system makes it difcult to understand
past and future consequences of greenhouse gas
increases. As a result, the extent to which recent
temperature changes can be attributed to greenhouse gas increases remains uncertain.
Limits in climate knowledgefor example in describing the behavior of clouds, hydrology, sea ice,
and ocean circulationare well known and continue
to be researched. Climate observations display signicant natural variability that cannot be explained
with existing models and knowledge. In the recent
and ancient geological past, for example, climate
has been both warmer and cooler than today for
reasons that are not yet understood.
Projections of climate change require estimates of
future emissions from energy use and other sources
over the 21st century. In our own energy outlook,
it is difcult to predict how technology will develop
even over the next 25 years. Longer-term economic

and climate forecasts face even more uncertainty


about how new technologies and changes in human
behavior may affect greenhouse gas emissions.
As a result, researchers must rely on scenarios based
on various assumptions, which deliver results ranging
from signicant emissions growth (a threefold increase
in emissions over the 21st century) to a drop in global
emissions, even without policy interventions.
When climate models are used to analyze the implications of these emissions scenarios, they project more
severe consequences at the high endincluding
sea level rises, droughts, and polar ice meltingand
relatively benign climate changes at the low end.
Uncertainty and risk. While assessments such as
those of the IPCC have expressed growing condence that recent warming can be attributed to

increases in greenhouse gases, these conclusions


rely on expert judgment rather than objective, reproducible statistical methods. Taken together, gaps in
the scientic basis for theoretical climate models and
the interplay of signicant natural variability make it
very difcult to determine objectively the extent to
which recent climate changes might be the result
of human actions. These gaps also make it difcult
to predict the timing, extent, and consequences of
future climate change.
Even with many scientic uncertainties, the risk that
greenhouse gas emissions may have serious impacts
justies taking action. The choice of action must
consider environmental, social, and economic consequences, as well as recognize the long-term nature
of climate change.

ExxonMobil recognizes the risk of climate change and its potential impact on
We were
asked

A question about
the Kyoto Protocol.
Why wont
ExxonMobil
recognize that
climate change is
real and take
actions to support
the Kyoto
Protocol?
e-mail to
citizenship @
exxonmobil.com

societies and ecosystems, and we continue to take actions and work with others to address that
risk. Our actions include investments and planning that address emissions today, as well as industryleading research on technologies with the potential to reduce greenhouse gas emissions in the
future. Our approach is closely aligned with the 2005 G-8 summit declaration on this issue.
In countries implementing the Kyoto Protocol, ExxonMobil complies with all laws and regulations.
For example, we are participating in the Emissions Trading Scheme in Europe from 2005 onward.
Furthermore, we continue to work on energy efciency and reduced emissions in each of our businesses across the globe.
Like many other companies, we do not believe the Kyoto Protocol is the right approach to reducing greenhouse gases. We are concerned it will impose signicant economic costs in the developed
world while doing little to achieve its goal of addressing climate change. Developing countries,
such as China, require most of the worlds increased need for energy to grow their economies,
and have no comparable commitments.
Opposition to the Kyoto Protocol does not equate to a lack of concern about the environment or
the issue of climate change. In fact, quite the contrary. ExxonMobil has taken, is taking, and will
continue to take tangible actions to reduce emissions in our operations as well as in customer use
of our products, and to better understand and prepare for the risks of climate change.
We believe that an effective, long-term climate policy should rst and foremost promote:
Global participation;
Transfer of efcient technology;
Accelerated research and development of innovative, affordable low-greenhouse-gas technologies;
Acceptance of the priorities of developing countries, which include economic development
and poverty alleviation; and,
Increased research in climate science.

Do you have a question regarding ExxonMobils environmental policies or practices?


Please write to us at citizenship @ exxonmobil.com.

23

Environmental performance

Netherlands:
Energy efciency leads to lower emissions
ExxonMobil sites around the world produce innovative approaches to
reduce energy use in our operations. Our Rotterdam chemical facility staff
discovered that reducing the number of steam boilers operating on-site
from two to one not only met facility requirements, but also signicantly
improved the sites energy efciency and reduced emissions of NOx. A
team in Rotterdam developed an operating strategy that increased the
efciency and reliability of the primary boiler, thereby dropping a second
boiler to a hot standby position. The new system uses 10 percent less
energy and reduces the sites emissions of NOx, to comply with new local
legislation. The hot standby position concept is now being shared with
other sites as a best practice.

Greenhouse gas (GHG) emissions


Recognizing the risk of climate change, we are taking
actions to improve efciency and reduce greenhouse
gas emissions in our operations.
We are also working with the scientic and business
communities to undertake research to identify and
develop economically competitive and affordable
technologies to reduce long-term global greenhouse gas emissions while meeting the worlds
growing demand for energy.
Global examples of ExxonMobils actions to manage
and reduce GHG emissions include:
Reporting

of GHG emissions;
Energy efciency, including our Global Energy
Management System and cogeneration initiatives;
Flaring reduction;
Natural gas production and sales; and,
Research for the longer term.

GHG emissions reporting


ExxonMobil is committed to consistent, comprehensive reporting of GHG emissions. We have publicly
reported GHG emissions as they relate to our operations for 1998 and subsequent years. The American
Petroleum Institute has developed a Compendium
of Greenhouse Gas Emissions Estimations
Methodologies for the Oil and Gas Industry, which
documents calculation techniques and emissions
factors for developing GHG emissions inventories for
oil and gas industry operations. It serves as the basis
for our global calculations, unless local regulations
require other methods.
Since 2003, ExxonMobil has reported direct GHG
emissions associated with its equity ownership of all
interests. Our total GHG emissions are essentially at
from 2004 to 2005, with emissions from power and
24

Greenhouse gas emissions (absolute)


Direct equity CO2 equivalent emissions
Downstream
Upstream
Chemicals
Cogeneration and HongKong Power

150

(Million metric tons)

100

50

0
2002

2003

2004

2005

cogeneration activities increasing while emissions


from oil, gas, and chemical operations decreased.
ExxonMobils investments in cogeneration increased
our reported GHG emissions, but they lowered the
emissions of companies that no longer need to produce electric power for operations. The net impact
of the cogeneration investments is an overall reduction in GHG emissions. In our oil, gas, and chemical
operations, business growth increases our GHG
emissions, and we are continuing to make progress
on emissions reduction steps to offset the impact
of this growth.
Carbon dioxide makes up most of our GHG emissions, and it comes predominantly from our processing operations, including exhaust from combustion units and ares. Our GHG reporting includes
emissions associated with the production of oil and
gas, the rening of oil products, and the manufacture
of petrochemicals. Our GHG inventory also includes
emissions from company-operated marine vessels
and road tankers. It excludes GHG emissions associated with products sold.

Energy efciency
ExxonMobils global operations consumed approximately 1425 trillion British thermal units (BTU) of
gas and electricity in 2005. Not surprisingly, we take
energy efciency seriously. As we consider new
capital projects, we use proven tools and processes
to improve the efciency and emissions performance
of our new investments.
Energy consumption is a major cost in all of our
businessesparticularly manufacturing operations
such as rening and chemicalas well as a source
of emissions. Reducing energy consumed to manufacture our products makes good business and
environmental sense.

Greenhouse gas emissions (normalized)

Avoided GHG emissions from


ExxonMobil actions

Direct equity CO2 equivalent emissions (excludes cogeneration)


Downstream
Upstream
Chemicals

(Metric tons of emissions per 100 metric tons of throughput)

Energy efficiency

60

Cogeneration

(Million metric tons per year)

Identified opportunities

24

12

40

20

Flare reduction
Energy efficiency
Cogeneration

16

8
Total avoided
emissions 2005

0
2002

2003

2004

2005

ExxonMobil has improved energy efciency across its


operations for decades. We continue to undertake
a broad array of operational changes and conduct
targeted research and development that will support
our efforts to further improve energy efciency.
As part of the American Petroleum Institutes Climate
Change Program, ExxonMobil committed to support
the U.S. effort to signicantly reduce GHG intensity
(dened as greenhouse gas emissions divided by
gross domestic product). Specically, we committed
to improve energy efciency by 10 percent by 2012,
from a 2002 baseline, across U.S. rening operations.
We are on pace to exceed that commitment, not
only in the United States, but globally as well.
In 2005, the American Chemistry Council recognized
energy efciency projects at ExxonMobil Chemical
Company manufacturing sites that are saving in
excess of 3.9 trillion BTUs annually. The improvements at the companys Baton Rouge, Louisiana;
Baytown and Beaumont, Texas; and Edison, New
Jersey, chemical plants are yielding energy savings
equal to the needs of more than 19,000 households
and reductions in carbon dioxide emissions of more
than 220,000 tons per year.
Our energy efciency efforts also help to reduce other air emissions. For example, at our Esso Australia
afliate in Longford, process control improvements
to the hot oil system have increased energy recovery
from waste heat units. The result is less fuel being
red and less NOx released to the atmosphere.
Global Energy Management System (GEMS).
ExxonMobil has established management systems
that incorporate efciency improvements and emissions reductions into the routine operation of our
business. Through our Global Energy Management

00 01

02

03 04 05

Why does
ExxonMobil
support energy
efficiency?

Reduce
environmental
emissions associated
with providing
and using energy.

2006 +

System (GEMS), we use benchmarking and best


practices to develop internal targets for efciency improvement in our rening and chemical operations.
Since GEMSs inception in 2000, we have identied
opportunities to improve energy efciency in rening
and chemical operations by 15 percent. Since the
global launch, we have captured nearly 50 percent of
the opportunities. These improvements have reduced
ExxonMobils energy costs by about $500 million per
year, and associated greenhouse gas emissions by
about 7 million metric tons per year. Our reneries
and steam cracking operations have improved their
energy efciency at a rate two times the historical
industry average rate, increasing overall energy efciency by nearly 7 percent since implementing GEMS.
In acknowledgement of GEMS and other efciencyrelated systems and initiatives, ExxonMobil was
recognized in May 2005 for leadership in energy
conservation and environmental stewardship at the
27th Industrial Energy Technology Conference in
New Orleans, Louisiana.
Cogeneration. Cogeneration, the simultaneous
production of electricity and heat or steam, has been
a signicant factor in improving energy efciency
at ExxonMobil facilities around the world.

Reduce
operating costs.

Extend the
availability of a very
large, though finite,
base of energy
resources to support
growing prosperity.

Make energy
more affordable
to consumers.

With an additional 400 megawatts (MW) of cogeneration capacity brought online during 2005,
ExxonMobil now has interests in 85 cogeneration
facilities in more than 30 locations worldwide, with a
capacity to provide about 3700 MW of poweror
enough electricity to meet the demands of close to
seven million European households. The additional
capacity we added in 2005, combined with 400MW of
capacity added in 2004, represents an investment of
nearly $1 billion. We are continually considering new
cogeneration projects and have projects in Belgium
and Singapore in the late stages of development.
25

Environmental performance
Our Beaumont, Texas,
cogeneration power
plant received recognition for fuel efciency
and emissions savings
from the Climate
Protection Partnership
Division of the U.S.
Environmental
Protection Agency
(EPA).

Cogeneration capacity

4500

(Megawatts)

3000

1500

0
1970

Benets of cogeneration in Beaumont


The new Beaumont cogeneration power plant became fully operational
in 2005, producing up to 465 megawatts of reliable power and more than
three million pounds per hour of steam for use internally. The cogeneration
facility produces all of the power needs for the renery and chemical plants
in the Beaumont complex and exports up to 350 megawatts of electric
power to the local grid.
Clean air
Operates at twice
the efciency of a
traditional power
plant, avoiding GHG
emissions of approximately 1 million
metric tons per year.
New facilities emit
50 percent less NOx
than older steam
boilers shut down as
part of this project.

Power
Adds 465 MW of electric power, bringing
total power capacity
to 700 MW. Power
availability above
renery and chemical
needs can be sold.

Jobs
700 peak construction workers drawing
from local skilled
labor, suppliers, and
subcontractors.
Approximately
10 ongoing jobs
for maintenance,
operations, and
administrative work.

With the latest turbine technology, cogeneration can


be twice as efcient as traditional methods of producing steam and power separately. Cogeneration
recovers the useful energy that is otherwise
discharged into the atmosphere or lost during the
process of condensing steam back to water at traditional power plants. This captured energy is used
directly in our manufacturing processes. Employing
a new approach, called direct process heat integration, we can achieve even higher efciencies. We are
considering this approach for several new projects
under development. Our facilities in Antwerp, for
example, are expected to have ExxonMobils rst
such installation of this technology.
26

1980

1990

2000

2005

Our current cogeneration capacity reduces CO2


emissions by approximately 9 million metric tons
annually. By comparison, reducing an equivalent
amount of emissions using wind energy would
require nearly 30 percent of all the installed wind
generation capacity that exists in Germany, or 50
percent of all the installed wind generation capacity
that exists in Spain (the rst and second wind energy
markets, respectively). With the development of
power markets and regulations to support large cogeneration investments, it is now possible to design
facilities to send competitive, efcient electricity to
the local transmission grid, beneting industry and
the public alike.

Flare reduction
Across our operations, ExxonMobil has programs
in place to improve operations integrity, thus reducing downtimes and upsets that can result in aring.
Additionally, we look for operating and project opportunities to recover gas that would otherwise be ared.
Upstream improvements. Typically, oil and gas
production sites use a portion of natural gas as fuel
for on-site operations and sell the remaining gas. In
parts of the world without developed gas markets,
natural gas produced in excess of operational needs
is often burned in a are.
ExxonMobil participates in a partnership led by the
World Bank to identify and reduce barriers to developing commercial opportunities for gas that would
otherwise be ared. The Global Gas-Flaring Reduction
Public-Private Partnership includes the governments
of oil-producing countries as well as international and
state-owned oil companies. Consistent with this effort,
ExxonMobil is pursuing opportunities to reduce
aring in operations around the world.

Hydrocarbon aring from worldwide


oil and gas production

825

(Million standard cubic feet per day)

550

275

0
2000

2001

2002

2003

2004

2005

In 2005, ExxonMobils oil and gas production


operations ared 784 million cubic feet per day, a
10 percent increase over 2004. This years increase
corresponds to 2.1 million metric tons of CO2.
Flaring increases in recent years have been driven
by increased production in Africa. Projects are under
way to address the major sources of aring related
to production.
Nigeria. During the past year, we continued to make
progress on projects to minimize routine aring in
offshore Nigeria. The detailed design, fabrication
and installation activities for the Nigeria East Area
Projects progressed substantially in 2005. With these
projects, in 2006 we will commence reinjection of
natural gas that would otherwise be ared. Our
approach will enable the recovery of additional oil
reserves while signicantly reducing aring and will
enable extraction of natural gas liquids for sale.
The East Area Projects will reduce annual worldwide
upstream aring by approximately 40 percent of
the 2005 total.
Greenhouse gas emissions from our Nigerian
operations are expected to decrease by about 7
million metric tons per year, representing about
5 percent of our worldwide GHG emissions,
and equivalent to removing more than 3 million
European cars from the road.
Venezuela. We are successfully incorporating our
expertise in aring reduction into new development
projects. Together with our joint venture partners,
we initiated a Gas Facilities Modication Project in
Venezuela. During 2005, we began operating the rst
phase of the project which includes additional gas
separation and compression facilities and a new gas
transfer pipeline. As a result, gas sales have increased
substantially and aring has been reduced to less

than one-third of previous levels. When complete,


the project will improve the reliability of existing
compression facilities and provide new high-capacity
gas handling equipment to manage future increases
in produced gas volumes while reducing aring to
minimum operating levels.
Angola. Through efforts to optimize operations,
we are generating signicant reductions in aring.
As an example, our Angolan operation achieved a
reduction in the amount of gas ared during start-up
of the Kizomba B eld. To accomplish this reduction,
we optimized hook-up and commissioning activities,
and tailored drilling schedules to ensure the early
availability of well capacity for gas injection, minimizing the amount of time gas was ared. Just 32
days after start-up of Kizomba B, all gas was being
reinjected with no routine aring.
Refining and chemical flaring improvements.
ExxonMobil strives to minimize aring in its downstream and chemical facilities. Recovering ared gas
can have a signicant impact on both emissions and
cost management. This aring generally occurs as
a safety measure during operating upsets, startups and shutdowns, and typically represents about
6 percent of ExxonMobils total aring; however,
activities are under way to reduce this level as well.
For example, at our manufacturing site in Beaumont,
Texas, hydrogen from the ethylene manufacturing
operations had to be ared whenever the renery
hydrocracker was shut down for maintenance. A
team developed new operating procedures which
eliminated this need to are.
At our chemical plant in Baytown, Texas, we modied a compressor to recover 70 percent of the gas
that would otherwise have been ared. The recovered ared gas is used to fuel on-site boilers and
red heaters, displacing purchased natural gas. This
improvement will result in reduced CO2 emissions,
and a reduction of nearly 100 metric tons per year
of combined methane, ethane, and volatile organic
compounds (VOC) emissions.

Low-emissions natural gas


ExxonMobil sells natural gasthe worlds cleanest
fossil fuelin 25 countries and across 5 continents
in most major gas markets. With its inherent
advantages in efficiency and low emissions, natural
gas is expected to play an increasing role in meeting
world energy demand. Over 40 percent of the
growth in gas demand to 2030 will be for electric
power generation. Through its technological
expertise and industry experience, ExxonMobil
is playing a leading role in developing liquefied
natural gas (LNG) projects that enable the
transportation of large volumes of natural gas via
27

Environmental performance

Improving environmental performance


of our products
Through our technological capabilities, ExxonMobil also contributes to
improving environmental outcomes in the consumption or use of our
products. Current examples include:
Advanced

lubricant formulations to improve fuel economy and meet


stringent emission standards. These products can also increase the interval
between oil changes, thereby lowering environmental impacts by reducing
the volume of used oil while continuing to supply superior protection
for engines;
Advanced materials for plastics that offer lower weight and better fuel
mileage, as well as being recyclable; and,

Reducing

sulfur content in gasoline to very low levels, with minimum


octane loss, through our SCANning program. In August 2005, ExxonMobil
scientists were publicly recognized by the American Chemistry Society
(ACS) for the development of SCANning. Currently, there are 22 operating SCANning and SCANning II units worldwide (both ExxonMobil and
licensees) with a capacity of approximately 550 KBD, equivalent to approximately 25 million gallons per day. The ACSs annual Heroes of Chemistry
program recognizes scientists in the industry who create products and
processes that contribute to improving the quality of life.

ocean tanker from remote geographic locations to


major centers of demand. Together with our long
history of supplying natural gas via pipeline, our
investments in LNG are delivering energy solutions
with lower emissions to support growing global
energy needs.

Research for the longer term


Climate science and technology. Our climate
research is designed to improve scientific
understanding, assess policy options, and achieve
technological breakthroughs that reduce GHG
emissions in both industrial and developing
countries. Major projects have been supported
at institutions including the Australian Bureau of
Agricultural and Resource Economics, Battelle
Pacific Northwest Laboratory, Carnegie Mellon,
Charles River Associates, the Hadley Centre for
Climate Prediction, International Energy Agency
Greenhouse Gas R&D Programme, Lamont
Doherty Earth Observatory at Columbia University,
Massachusetts Institute of Technology, Princeton,
Stanford, The University of Texas, and Yale.
Advanced vehicle technology. Because the majority of GHG emissions associated with the production and use of oil arises from consumer use of fuels
(87 percent), with the remainder from our industrys
operations (13 percent), we partner with automobile
manufacturers to help develop advanced vehicles
28

and fuels. The internal combustion engine is expected to power more than 95 percent of vehicles
in 2030, so technologies that improve fuel efciency
and the emissions performance of the internal combustion engine could substantially reduce environmental impacts for decades to come.
For example, we are working with Toyota and
Caterpillar in separate programs to design highefficiency, low-emission fuel/engine systems. This
has produced groundbreaking research in combustion science. We are now applying this science
in the field of homogeneous charge compression
ignition (HCCI) and other advanced powertrain
systems. These have the potential to improve
vehicle fuel economy by approximately 30 percent
and be applicable to a broad range of vehicle
types, including hybrids.
Carbon capture and storage (CCS). CCS technology separates CO2 from a gas stream, compresses
it to reduce volume, and transports it by pipeline
to a storage site. With large facilities accounting for
nearly 60 percent of current global CO2 emissions,
CCS, which is applicable to large CO2 emission
sources, could be an important option to address
long-term global emissions. All major components
of CCS systems are in use today at an industrial scale
by ExxonMobil and other companies. For example,
ExxonMobil recovers CO2 at LaBarge, Wyoming,
which is used for enhanced oil recovery. In addition,
ExxonMobil shares ownership in one of the longestrunning CCS projects, the Sleipner eld in Norway.
But before CCS can become more widely deployed
on a global scale, it must overcome the challenges
of high cost and uncertainty about long-term storage integrity. ExxonMobil has conducted research
relevant to CCS for many years. We have also
supported external research and other activities to
understand the scientic, economic, technical, and
policy aspects of carbon capture and disposal to
help advance this technology.
Hydrogen. ExxonMobil is also working to develop
technology that could provide important options
for meeting longer-term energy needs while reducing environmental impacts. For example, we are
conducting research on a novel hydrogen production technology for use with fuel cells in automotive
and other applications. The on-board production of
hydrogen from liquid fuels represents an alternative
to the difcult challenge of on-board hydrogen
storage and would simplify the introduction of fuel
cell vehicles by making use of existing fuel supply
infrastructure. In addition, ExxonMobil continues to
be an active participant in the U.S. Department of
Energys FreedomCAR and Fuel Partnership.

With new technology


and insight, ExxonMobil
is working to develop
cleaner-burning fuel and
engine systems that may
improve the fuel economy
of future vehicles by 30
percent. ExxonMobil scientists and researchers use
this apparatus to perform
detailed combustion studies in pursuit of this goal.

Volatile organic compounds (VOC)


Upstream

Refining

Chemicals

.09

(Metric tons of emissions per 100 metric tons of throughput)

.06

.03

.00
2002

2003

2004

2005

Global Climate and Energy Project (GCEP). Our


investment in groundbreaking research at the Stanford
University-based Global Climate and Energy Project
(GCEP) is another way we are working to meet future
energy needs with signicantly lower greenhouse
gas emissions. GCEP is the largest privately funded
low-greenhouse-gas-energy research effort in history.
This project aims to undertake fundamental and precommercial research on a wide range of technologies
that offer the potential to supply and use energy with
signicantly reduced greenhouse gas emissions.
Among GCEPs many research programs:
Researchers are investigating the use of genetically
engineered bacteria to capture solar energy and
produce hydrogen, which could be used in power
generation or advanced automobiles;
Investigators

are looking to make exible sheets of


solar cells, organized at the molecular level, to provide far less expensive and more efcient electricity
from sunlight;
Materials

are being researched for high-capacity


storage of hydrogen in carbon nanotubes, which can
provide subsequent easy release for power uses; and,
The

geologic integrity of underground reservoirs


and aquifers is being assessed for potential use
in storing CO2 generated by burning fossil fuels.
GCEP is discussed in greater detail in the case study
on page 39.
More information on ExxonMobils views on climate
policy and science, greenhouse gas emissions, and
technology options can be found in our recent report,
Tomorrows Energy: A Perspective on Energy Trends,
Greenhouse Gas Emissions and Future Energy Options,
available at exxonmobil.com/tomorrowsenergy.

Environmentally responsible development of


Canadas oil sands. Oil sands represent an enormous potential source of economic liquid fuels.
Their development is energy intensive, and therefore,
greenhouse gas emissions are a key issue. Imperial
Oil, our Canadian afliate, established The Imperial
Oil Centre for Oil Sands Innovation at the University
of Alberta in 2004 to conduct research into more
efcient, economically viable, and environmentally
responsible ways to develop Canadas oil sands
resources, one of the largest crude oil deposits in the
world. Over the next ve years, Imperial will contribute (Canadian) $10 million to help establish and run
this research facility, administered by the universitys
engineering faculty.

Air emissions
In addition to curbing greenhouse gas emissions,
ExxonMobil is working to reduce other air emissions, such as sulfur dioxide (SO2), NOx, and VOC,
from our operations.
ExxonMobil has a history of reducing air emissions through technology advances. For example,
ExxonMobil developed and installed the rst commercial applications of wet gas scrubbing for uid
catalytic cracking units (FCCUs) back in the early
1970s to reduce SO2 and particulate matter emissions, and later installed the rst selective catalytic
reduction (SCR) unit on FCCUs to reduce NOx in
the early 2000s. Recently ExxonMobil reached an
agreement in the United States to reduce NOx
and SO2 levels per barrel of feed processed at our
seven high-conversion U.S. reneries to the lowest
level of any region in the world. This will result in a
31,000-tons-per-year reduction in combined SO2
and NOx emissions by 2009, based on a year-end
2005 baseline.

29

Environmental performance
Freshwater use

In continually evaluating
all power supply options,
ExxonMobil has found
benets for niche applications of solar power
generating capability
in remote locations. In
Malaysia, the satellite elds
development (SFD) project
uses low-maintenance
solar panels in combination with thermoelectric
generators to provide the
power required to operate
a series of unmanned
satellite platforms.

Fresh water is a limited resource that is becoming increasingly scarce in many areas of the world.
One-third of the Earths population already lives
under water-stressed conditions. By 2025, the United
Nations Environment Programme (UNEP) predicts
this number will rise to two-thirds.

Our estimates of VOC fugitive emissions from piping components are more accurate as a result of
applying new technology: optical imaging for leak
detection. Many sites have used optical imaging in a
Smart LDAR (leak detection and repair) program to
proactively monitor and control this VOC emission
source. This program is helping us to identify and
address fugitive emissions more rapidly. Additionally,
VOC emissions have been reduced through multiyear
application of emissions control equipment, including thermal oxidizers on vents, vapor recovery on
storage tanks and loading vessels, and installation of
improved technology as facilities are modernized.
In addition to these efforts in our operations,
ExxonMobil has undertaken many initiatives to
reduce emissions from transportation:
Europe. After introducing our Mobil 1 Emissions
System Protection (ESP) in Europe, the U.K. Institute
of Transport Management awarded ExxonMobil
Lubes and Specialties the Best OEM-Approved
Lubricants 2005. The award was given in recognition
of the contribution of the Mobil 1 ESP formula to
help prolong the life of emissions reduction systems.
Africa. We have continued to play a leading role
in the effort to eliminate leaded gasoline use in
sub-Saharan Africa. We are pleased to report that
a 2001 agreement among 25 African countries to
phase out leaded gasoline by the end of 2005 has
been achieved. Drivers in Africa can now begin using catalyst-equipped vehicles that will dramatically
reduce vehicle emissions and enhance air quality. The
next goal will be to phase out leaded gasoline from
all remaining countries in the world. ExxonMobil is
contributing funds to help drive this effort.

30

Fresh water, like oil and gas, is a shared natural resource that we all need to use responsibly.
ExxonMobil continually seeks ways to reduce water
use and preserve water quality, through the design
and operation of our facilities, recycling and reuse,
and aggressive measures to prevent water pollution.
We recently conducted a freshwater survey in areas
where we operate to identify communities where fresh
water is potentially scarce. ExxonMobil sites operating in these areas are addressing the issue via their
respective Environmental Business Plans.
Our operations on Sakhalin Island, Russia, provide
one example of how ExxonMobil is reducing freshwater usage. Exxon Neftegas Limited (ENL) uses sea
water rather than fresh water to hydrotest storage
tanks at the DeKastri oil export terminal. This single
measure will save approximately 115,000 cubic
meters of fresh water.
Efcient water management also involves recycling
wherever possible. Our Canadian afliate, Imperial
Oil Limited, has successfully developed and applied
techniques for treating and recycling the large quantities of water produced at its Cold Lake operation.
This water is used to generate steam, which is injected into subterranean oil sands to heat the highly
viscous bitumen, enabling it to be recovered. More
than 95 percent of this water is now reused, making the amount of fresh water needed to produce a
cubic meter of bitumen today less than one-fth the
amount required in the late 1970s. The cumulative
volume of fresh water conserved by this recycling
initiative is approximately 300 million cubic meters
since 1980. As a result of its efforts, the Cold Lake
operation was recognized in 2005 by the Alberta
Emerald Foundation for Environmental Excellence as
one of three nalists in the large business category.
The Emerald Foundation was founded in 1991 to
recognize outstanding achievements and dedication
in protecting and preserving the environment.
Our ExxonMobil Research and Engineering Company
(EMRE) in New Jersey, has also received recognition for its water recycling efforts: The New Jersey
Department of Environmental Protection presented
its Determination of Environmental Benet award to
EMRE in recognition of the innovative ways EMRE
has recycled water from its industrial wastewater

Marine vessel spills (Owned/operated,


and long-term leased)
>1 Barrel in volume

Other spills (Non-marine spills)


Number of spills to water

Number of spills to soil

<1 Barrel in volume

21

(Number of incidents)

(Number of oil, chemical, and drilling


fluid spills greater than 1 barrel)

690

14

460

230

5
0

0
2000

2001

2002

2003

2004

2005

2000

2001

2002

2003

2004

2005

plant for reuse in site cooling towers. This effort has


reduced the sites annual freshwater consumption
by approximately 10 percentan especially critical
benet during recent drought conditions.

Honour from the British Safety Council for the fth


consecutive year. The Sword of Honour recognizes
organizations that have implemented safety systems
that are among the best in the world.

Spills

ExxonMobil marine afliates have been actively


involved in the Oil Companies International Marine
Forum (OCIMF) to improve and expand the industry
Ship Inspection Report Exchange (SIRE) system,
which helps to promote a uniformly high standard
of inspections. This system enables member
companies and state regulatory ofcials to use
the inspection results in marine vessel quality
assessment decisions.

Elimination of spills is an important part of our


culture, and our proactive approach has yielded
signicant improvements in our performance.
Marine vessel performance. In 2005, our marine
afliates achieved the lowest-ever number of oilto-water incidents, with only one minor oil sheen
by an afliate-operated vessel, and one by a leased
vesselboth incidents resulted in a release of less
than 1 barrel. Since 2000, spills by our operated and
leased vessels are down nearly 90 percent, reecting
the continued pursuit of awless marine operations.
Marine transport integrity. ExxonMobils marine
transportation is primarily provided through two
afliated companiesSeaRiver Maritime Inc. and
International Marine Transportation Limited. In 2005,
our U.S. marine transportation afliate, SeaRiver
Maritime Inc., was recognized by the Washington
State Department of Ecology for excellence in marine safety and environmental stewardship. SeaRiver
achieved this recognition through meeting the
states voluntary Exceptional Compliance Program
for Tank Vessels (Ecopro). It is the only company to
attain full Ecopro status for a third consecutive renewal period since the programs inception in 1999.
Also in 2005, the Chamber of Shipping of America
presented SeaRiver Maritime, Inc. and each of its
vessels with Environmental Achievement awards
commemorating the current eets cumulative 54
years of spill-free performance. International Marine
Transportation Limited (IMT), our U.K.-based marine
afliate, was awarded the prestigious 2005 Sword of

Our marine afliates also helped to establish the


International Safety Management Code, which
requires ship operators to implement a safety management system to help them achieve incident-free
operations. Building on this foundation, OCIMFs
Tanker Management and Self-Assessment (TMSA)
program was developed as a tool to help ship
operators measure and improve their management
systems. The voluntary program encourages ship operators to assess their management systems against
listed key performance indicators and identify best
practices. Ship operators can use their assessment
results to develop a phased plan for improving safety
and environmental performance.
Since the TMSA introduction in 2004, the worldwide
tanker industry demonstrated strong support for
and recognition of the program contributions with
involvement from 600 participating companies. Our
vetting system, which is among the most rigorous
in the industry, has been modied to integrate the
operators self-assessment with our performance
indicators. This system is used to assist in selecting
quality vessels for potential charter service.

31

Environmental performance
Emergency response
drills are a critical part
of the Operations
Integrity Management
System (OIMS).

Emergency response drill in Norway


In October 2005, ExxonMobil Norway headed a major emergency response
exercise to improve coordination and maximize ability to ght spills at sea,
in cooperation with the Norwegian Clean Seas Association for Operating
Companies (NOFO). In all, 25 vessels were engaged offshore and nearshore, and more than 300 personnel were called out, making it the largest
oil spill exercise in Europe in 2005. All ExxonMobil Norway and NOFO offshore resources were activated and the Coastal Administrations vessels and
equipment were also called on, as well as resources from local communities.
We undertake large regional emergency preparedness drills periodically
to ensure a high state of readiness for all kinds of unplanned incidents.
Last Octobers drill tested our response to a tanker collision and resulting oil spill and re, and demonstrated excellent cooperation between
ExxonMobil Norway, NOFO, and other agencies having jurisdiction over
the North Sea and the Norwegian coastline. These drills provide excellent
opportunities to learn and improve. Our goal is zero incidents, yet we must
always be prepared.
Kathy Pepper
Managing Director, ExxonMobil Norway

For example, to minimize the potential for spills,


Exxon Neftegas Limited (ENL) in Russia worked with
contractors to develop spill prevention and mitigation programs focused on improved preventive
maintenance and awareness, the use of secondary
containment and other means of physical intervention, as well as increased training and communication.
We have developed and are deploying the rst
phase of the Lubricants and Specialties Standards
of Environmental Care, which includes harmonized
standards of design, inspection, and maintenance
for all lubricants and specialties plant equipment that
poses spill risks. This includes storage tanks, lines,
hoses, blending, packaging, lling, and shipping and
receiving operations. We are currently completing an
analysis of the gaps compared to these standards,
and expect to spend more than $5 million on this
effort over the next few years.
We are also managing efforts to reduce spills among
our contractors and suppliers for lubricants and
specialties products. As part of this effort, we have
revised our Lubes Vehicle Management Guide,
which is used in selecting and evaluating carriers for
our lubricants and specialties products worldwide. In
this revision, we are putting additional focus on spill
and other measures of environmental performance.
In 2005, our Americas Rening business established
oil spill prevention teams at all rening locations in
the Americas. These teams track spill incidents large
and small. They identify root causes and develop
tactics to prevent future spills. The teams touch
many aspects of the business, serving as the catalyst
for major studies and action plans. One study focuses on identifying key human behaviors that lead
to spills, while a second identies optimum piping
inspection, maintenance, and replacement strategies
for continuing improvement in spill prevention.

Emergency response preparedness


Non-marine spill performance. In 2005, we had
our fewest spills ever to the environment, reducing the number by 20 percent versus 2004, even
including spills associated with the severe Gulf Coast
hurricane season. This is the result of our continuous
improvement approach, including enhanced spill
awareness, prevention training, and facility upgrades.
Many of the initiatives and processes implemented
to achieve these improvements have come from our
eld-based spill prevention teams, which include
employees from operations and maintenance, supported by engineers, and backed by commitments
from all levels of management. Teams meet regularly
to share ideas and information that lead to improvement in performance.
32

In addition to our efforts to prevent incidents,


ExxonMobil believes that environmental responsibility means maintaining a strong response capability
to operational emergencies, should they occur.
We place great emphasis on preparing to respond
effectively to mitigate the impact of incidents.
Operating businesses and major sites have welltrained teams that are routinely tested against a
range of scenarios including product spills, res,
explosions, natural disasters, and security incidents.
In 2005, ExxonMobil completed seven major drills
to evaluate and validate emergency preparedness.
Major drills involve several different businesses
lines and large geographic areas. They are often
undertaken together with governments, coastal

authorities, and industry-wide oil spill response


cooperatives. In addition, OIMS requires all operations to verify emergency preparedness through
local drills. Over 350 of these local drills were completed during 2005.
We support a network of 13 international and national
industry cooperatives around the world through active
membership and contributions to industry funding
in excess of $200 million. These cooperatives maintain
oil spill equipment, aerial dispersant equipment, and
the technical expertise to respond to oil spills.
Prior training paid off in 2005. During Hurricanes
Katrina and Rita, ExxonMobil successfully shut in
all offshore oil and gas production and several U.S.
Gulf reneries and chemical plants without injury
and without signicant environmental incident. We
also kept the huge Baton Rouge rening complex
onstream despite feedstock interruptions caused by
extensive power outages. We donated and maintained transport fuel deliveries for emergency crews
in Louisiana and south Texas. We took action to
address gasoline shortages during the evacuation of
Houston, and promptly imported fuel products from
Europe to enhance U.S. supply. Please see our case
study on page 40 for more information.

Environmental expenditures
ExxonMobils worldwide environmental expenditures
in 2005 totaled more than $3 billion, including $1.2
billion in capital expenditures and over $2 billion in
operating expense. Fines and settlements represent
less than one-tenth of 1 percent of this total. Rening
expenditures comprise close to 50 percent of the
total, with Upstream and Fuels Marketing at nearly 20
percent each. Of total environmental expenditures,
approximately half was spent in the area of air quality.

Wastes and residual materials


ExxonMobil uses a tiered approach to reduce all
wastes, both hazardous and nonhazardous. First,
where possible, we reduce waste at its source. If this
cannot be done, we recycle or reuse waste to the
extent feasible. Any remaining waste is either treated
to render it nonhazardous or disposed of at an
approved site.
We are committed to reducing waste everywhere we
operate. When Esso Angola began development of
oil and gas resources in 2002, there were inadequate
waste management facilities in the region. To build
the waste management capacity in Angola, Esso
screened a number of international waste management rms. The rms were then invited to tender
proposals for developing a waste facility in Angola
that would meet the companys operational standards

Biodiversity conservation in Cepu, Indonesia


ExxonMobil takes action to conserve biodiversity in the areas where we
operate. Specically, we utilize Environmental and Social Impact Assessments
(ESIAs) to identify sensitive areas and develop mitigation steps for our new
projects. This includes ecosystem evaluation and consideration of biological,
chemical, and physical characteristics, including consideration of people
as an integral part of the environment.
When we entered Cepu, Indonesia, to conduct seismic exploration onshore,
extensive planning and preparation were undertaken to minimize the environmental footprint. The challenge was to conduct surveys in harmony with
the local environmentforests, rice elds, a major river, and numerous villages. ExxonMobil met with ofcials from over 300 villages, reviewed biology
of the area and conducted water sampling and wildlife observations.
As a result, limits were placed on eld activities, camps were located to
specic areas to minimize the footprint, no heavy vehicles were moved
cross-country, and all areas were reclaimed to their original condition. The
survey was conducted with minimal impact to forest, wildlife, and villagers.

for protecting the environment, which exceed the


requirements of the Angolan government. As a
result, two waste management companies are
now operating in Angola at standards that meet
or exceed our expectations.
Recycled, reused, and reclaimed materials.
Reuse and recycling are measures of resource-use
efciency that provide opportunities for conservation as well as improved operating efciencies.
Worldwide, the Corporations sites and businesses
participate in the recycling of applicable waste to
save disposal costs, create a strong pollution prevention program for waste, save nonrenewable natural
resources, and extend the life of landlls.
ExxonMobil plastic lm operations generate a signicant amount of nonhazardous scrap lm. Though we
recycle whatever we can on-site, coated lms have
historically been sent to landlls because they could
not be reprocessed on-site. In 2005, our lm operations in Shawnee, Oklahoma, identied a processer
who could use the scrap to produce pellets for injection molding of plastic products. In the future, more
than 1 million pounds of scrap lm per year will be
sold as product instead of being sent to a landll.
Through a partnership with HPP Corporation,
Baytown-area sites in Texas, including the Baytown
renery, Baytown chemical plant, Baytown olens
plant, and Houston olens plant, have recycled more
than 164,000 tons of waste for use in certain roadbased products since 1997. This effort has resulted
in more than $1.3 million in cost savings.

33

Environmental performance
(Left) A global redesign of
lubricant bottles has resulted in an ergonomically
advanced solution that
requires up to 25 percent
less plastic and resin.
Adopted as a universal
design at manufacturing
plants worldwide, the
bottles feature a wider
mouth for improved ow
and less spillage and
waste. The design also
reduces the amount of
paper used in packaging.
(Right) Exxon Neftegas
Limited has teamed up
with a university partner
in Russia to protect the
Stellers sea eagle by
building articial nesting
locations and hunting
perches.

We are also continually looking for ways to reduce


waste through internal processing improvements.
At our chemical facility in Rotterdam, closing the
reformer furnaces at the site produced about 100
tons of hazardous waste, which required appropriate
disposal. However, environmental coordinators in
Rotterdam re-evaluated internal options and found
a way to reprocess the material as feed for another
reformer, thereby reducing overall hazardous waste.
Our Altona renery in Australia implemented a
similar internal processing improvement through
a tank-cleaning innovation. This new process uses
a hydrocarbon solvent and a stand-alone boiler to
treat tank sludge, allowing much of it to be reprocessed in-plant. This reduced both cleaning time
and environmental waste.

Biodiversity
ExxonMobil recognizes the importance of conserving
biodiversity the variety of life on Earth. Because
our business spans the globe, we face the challenge
of conducting operations in many areas with sensitive
biological characteristics. Our systematic approach to
environmental management and our commitment to
understanding the human and natural environments
in which we work provide us with a framework to
meet these challenges effectively.
Biodiversity conservation within ExxonMobil is
driven by the following principles:
We

provide energy for a developing world in a


manner consistent with conserving biodiversity and
improving lives of people in the areas we operate;

We

operate responsibly wherever we do business


through actions that are scientically and economically sound and sustainable; and,

34

We

use well-established environmental management systems to ensure conserving biodiversity is


integral to our operations.
Our fundamental business of bringing energy to the
world involves exploring and operating in a variety
of ecosystems and climates. As a result, we have
created processes to identify sensitivities, including
biodiversity sensitivities, which form the basis for
business practices that protect the environment. We
believe each location should be assessed individually for environmental sensitivities, and we develop
mitigation steps that are meaningful in the specic
social and environmental context.
ExxonMobil uses widely accepted and available
tools and guidelines, such as those developed by
the Energy and Biodiversity Initiative, Conservation
International, Wildlife Conservation Society, and
World Conservation Union, to conduct initial screening for biodiversity sensitivities in a geographic area.
As work progresses, ndings based on the initial
screening are enhanced through local knowledge,
site-specic investigations, and risk assessments
that form the scientic basis for assessing impacts
and planning mitigation. The following are a few
examples of the types of projects ExxonMobil and
ExxonMobil Foundation support:

Sakhalin. Northern Sakhalin Island is home to the


Stellers sea eagle, or Orlan, the namesake for our
afliate Exxon Neftegas Limiteds (ENL) newly
installed offshore platform. In recent years, the
area has been affected by extensive forest res,
contributing to a scarcity of habitat and increasing
competition for nesting trees and foraging habitat.
Researchers funded by ENL have also discovered
that predation by the brown bear is perhaps the
single largest factor in edgling eagle mortality.

ENL, with the efforts of experts from the Lomonosov


Moscow State University, has introduced the rstever project in far-eastern Russia to build articial
nesting locations and hunting perches. Equipped
with devices to prevent predation by bears, these
locations offer the eagle protected access to feeding areas. In the past two years, the team has constructed 13 articial nests and 14 hunting perches,
and has installed more than 19 devices to discourage bear predation at both articial and natural
nesting locations.
We are also addressing issues surrounding the
endangered Western gray whale, which summers off
the coast of Sakhalin Island and feeds there throughout most of the ice-free season. Our support of the
gray whale population research program dates back
to 1997. This research has expanded the knowledge
base about the species and involved prominent
Russian and non-Russian whale scientists. We have
incorporated learnings from the research into planning of the Sakhalin-1 Project and are committed
to ongoing support of the program.
Australia. At our Altona renery in Australia, peregrine falcons were found to be living and nesting in a
decommissioned catalytic cracker tower. Peregrines
are listed as vulnerable and are rare across Australia.
The Altona renery provides an ideal location for
the falcons because of its proximity to the abundant
prey at the Altona wetlands, as well as limited human
access to the renery site. The renery employees
have worked with local conservationists to monitor,
study, and protect the falcons. In 2005, ExxonMobil
expanded its monitoring and protection of these
birds when a pair of peregrine falcons was discovered on towers at our Longford, Australia, gas plant.
Angola. In 2005, Esso Angola made a grant to
Conservation International (CI) to support integrating
a portion of southeastern Angola into the KavangoZambezi Transfrontier Conservation Area. This area of
Angola is vital to establishing wildlife corridors across
ve nations, which will enable Angola to participate in
future tourism and social development opportunities.
To establish the corridors, land mines must rst be
removed from large areas of Kuando Kubango and
nearby provinces. The grant provided support to
CI in initiating a stakeholder consultative process in
southeastern Angola, and in laying the groundwork
for involving communities in the demining and development planning process. Demining large parts
of southeastern Angola will allow the country to work
with its regional neighbors to promote ecotourism,
job creation, and economic development, while
improving the quality of life for Angolans in a remote
area of this rapidly developing country.

Indonesia. ExxonMobil Foundation supports the


Leuser International Foundations work in northern
Sumatra, Indonesia. The Leuser ecosystem is widely
believed to be one of the most biologically
diverse in the worldwith elephants, rhinos,
tigers, clouded leopards, and orangutans sharing
a rainforest wilderness that includes an estimated
8500 plant species. The ecosystem contains two
major volcanoes, three lakes, and nine major river
systems that ow to the east and west coasts of
the island. In addition, more than 4 million people
depend on this area for their water supply.
United States. In 2005, both our global headquarters site in Irving, Texas, and our Billings, Montana,
renery were recertied by the Wildlife Habitat
Council (WHC). In Irving, more than 80 percent
of the 245-acre property is maintained as wildlife
habitat, serving as home to many indigenous species including the bobcat, coyote, Eastern bluebird,
great blue heron, and American egret, among others.
ExxonMobil currently has four sites certied with the
WHC through employee-led programs to conserve
natural habitat for plant and animal life. We have
an additional site planned for certication in 2006.
Save The Tiger Fund. In 2005, ExxonMobil
Foundation marked the 10-year anniversary of the
establishment of the Save The Tiger Fund (STF) with
NGO partner National Fish and Wildlife Foundation.
ExxonMobil Foundation has provided a minimum of
$1 million annually to support STF since its establishment. This cumulative ExxonMobil contribution of
$11 million represents one of the largest corporate
commitments ever made to saving a species. In its
10 years of operation, STF has awarded 284 grants
totaling more than $14 million dollars to support
tiger-focused projects in 13 of the 14 tiger range
countries, representing nearly one-third of all funds
invested by NGOs in tiger conservation work worldwide. STF works with international organizations such
as the World Wildlife Fund, Wildlife Conservation
Society, Conservation International, WildAid, and
Fauna and Flora International, along with local
organizations in tiger range countries. In 2005, the
organization launched the Campaign Against Tiger
Trafcking (CATT) to combat threats to the wild
tigers existence. The program is designed to foster
global cooperation to stop the poaching, smuggling, trade, and use of tiger parts.

Environmental
priority areas for

2006

Continue to drive
environmental progress
across the business
consistent with Protect
Tomorrow. Today.
expectations.
Continue progress
toward achieving a
10-percent-energyefciency improvement
over a 2002 baseline
across all U.S. rening
operations by 2012.
Complete the project
plan for the Antwerp
cogeneration facility.
Progress Nigeria East
Area projects to reduce
upstream aring.
In 2006, ExxonMobil
Fuels Marketing will
join the U.S. EPAs
SmartWay Partnership,
a voluntary program
between the EPA and
the freight industry to
improve environmental
performance through
emissions reduction, as
well as reduction in fuel
consumption, and eet
operating efciencies.

35

Section four

Case studies
Proles in progress

Conducting research. Developing programs. Providing education. Improving processes. Sharing resources. Around the world, ExxonMobils corporate citizenship
takes many forms and involves many people, inside and outside the company.
Here are a few of our many stories.

An HIV/AIDS program
for employees in
sub-Saharan Africa

A way to monitor
GHG emissions in
the European Union

Concerned about the


potential impact of
HIV/AIDS on employees, families, and communities, ExxonMobil
developed a prevention
education program
called StopAIDS.
Launched in 2004, the
rst measures of the
programs progress are
now coming in.

A template for greenhouse gas (GHG)


emissions monitoring,
developed by Esso
Nederland and subsequently distributed
to emissions trading
associations throughout the European
Union (EU), is helping
to promote a more
unied standard.

36

Addressing a key
global challenge

Getting back to
business as usual

Investments, prices,
and prots

ExxonMobil initiated the


largest privately funded
low-greenhouse-gasenergy research effort,
the Global Climate
and Energy Project
(GCEP), led by Stanford
University.

In late summer 2005,


Hurricanes Katrina and
Rita devastated much
of the U.S. Gulf Coast,
striking ExxonMobil
operations with
unprecedented
intensity. Both storms
put the company-wide
emergency preparedness plan, adapted to
each facility, to the test.

Energy company earnings are needed to fund


the huge, long-term
investments required to
meet growing demand.
In 2005, many Americans
questioned whether
record earnings contributed to high gasoline
prices.

Case study: sub-Saharan Africa

An HIV/AIDS program for employees


What:
Providing ExxonMobil
employees and their
families with education, counseling, and
treatment options for
HIV/AIDS.

provided behavioral-change communications


expertise, which was incorporated into the program
design, execution and implementation. (For more
information visit www.psi.org.)
By year-end 2005, ExxonMobil had launched
StopAIDS in over 20 countries. The initiative is run
by the Nigerian-based, African-regional Program
Manager, Sunday Essien (pictured at left), and a network of program leaders in each country. Some 375
trained peer-educators deliver the program through
a peer education behavioral-change model and regularly meet with their co-workers in small groups. This
fosters an environment conducive to open dialogue
and an exchange of lessons learned and experiences
an important feature in preventing HIV/AIDS.

Why:
To mitigate potential
negative impacts on
the workforce and
help counteract the
sub-Saharan Africa
AIDS pandemic.
Where:
The program is in place
at every ExxonMobil
and afliate organization in sub-Saharan
Africa.
Who:
More than 4000
employees and family
members have participated as of December
2005.
More than 375 peereducators and facilitators have been trained.

When:
The program commenced in 2004. No
end date has been set.
How:
Educate peers in
the workplace.
Provide access to
condential, communitybased counseling and
testing.
Provide

access to
community-based care
and treatment.
Help to strengthen
and develop local
health care capacity.

StopAIDS: in sub-Saharan Africa,


where roughly 7 percent of all adults are infected
with HIV/AIDS, the health of local employees, their
families, and the surrounding communities is a
signicant concern for the Corporation. To address
the pandemic, we have taken aggressive action with
a comprehensive program that combines HIV/AIDS
education with condential, community-based counseling and treatment resources. StopAIDS is now
in place for employees and their families at every
ExxonMobil organization in sub-Saharan Africa.
Providing HIV/AIDS behavior-change education
and resources in a region at high risk. In the
countries of sub-Saharan Africa, more than 26 million
people are infected with HIV/AIDS, resulting in some
2.4 million deaths in 2005. Africa is also a region
where ExxonMobil has extensive business operations and over 4000 employees.
ExxonMobil launched StopAIDS in 2004 to mitigate
the potential impact of the disease on our workforce, their families, and communities as well as on
operations and economic growth in the region. The
company has supported several local AIDS prevention
efforts in Africa for many years. The new StopAIDS
program demonstrates our long-standing commitment to employee health and safety. It also builds
upon the strengths of local HIV/AIDS initiatives, to
provide a consistent behavioral-based prevention and
education program. Population Services International

Fine-tuning the program for widespread


acceptance and success. To help adapt the program to local conditions and focus on priority issues,
program administrators conducted a baseline survey
of employee knowledge, attitudes, and practices in
every participating organization. To ensure that employees could access community-based counseling
and treatment options, ExxonMobil also worked to
ensure that employee medical plans in each country
address HIV/AIDS like any other illness.
While the logistics of rolling out a large-scale, multicountry health program pose inevitable challenges,
StopAIDS organizers are pleased with the level of
employee involvement and enthusiastic support. This
positive response is in large part due to the knowledge, credibility, and leadership of our cadre of volunteer peer-educators and their local management.
Putting a program-wide measure of progress
in place. Given the condential nature of counseling,
the number of employees or family members who
have been individually counseled or treated is not
tracked. We are assessing the program through a
voluntary, anonymous, and condential workplace
survey. StopAIDS program organizers will soon be
able to look at changes in employee knowledge,
attitudes, and practice through a follow-up survey
administered at the 18-month point in the program.
By the end of 2006, it is our expectation that every
participating organization will have completed the
survey. With this measure of progress, StopAIDS
coordinators can ne-tune the program to be even
more responsive to local issues.
37

Case study: European Union

A way to monitor GHG emissions


What:
A comprehensive
monitoring protocol
to measure carbon
dioxide (CO2) produced,
together with a detailed
emissions reporting
template.

authorities overseeing them, anything resembling


an off-the-shelf monitoring solution did not exist.

Why:
To help participants
in the EU Emissions
Trading Scheme (ETS)
achieve compliance
with ETS guidelines.
Where:
EU member-states
participating in the ETS.
Who:
The protocol has been
adopted by all similar
ExxonMobil installations
that are covered by the
EU ETS. The template
has also been referenced
and adopted, in whole
or in part, by many
other organizations.
When:
The protocol was
developed in 2004.
Verication of 2005
emission reports was
completed in rst
quarter 2006.
How:
Work closely with
governments.
Adapt monitoring
protocol for broad
applicability.
Encourage

widespread
industry adoption of a
standardized approach.

Continually

rene
and update monitoring
protocol.

38

Emissions Trading Scheme

(ETS):
Last year, we reported on a group of engineers at
Esso Nederland BV who had developed a monitoring and reporting protocol to help their renery
comply with guidelines under the European Unions
Emissions Trading Scheme (ETS). This year, we
update the story of the protocol, which has gone on
to play a signicant role in supporting the emissions
trading effort throughout the European Union (EU).
A need for an accurate measurement
methodology to serve as a widespread
standard. After the European Union adopted the
Kyoto Protocol, the European Parliament and the
Council of the EU developed a program that allowed
companies within the European Union to trade their
greenhouse gas emissions allowances. Called the
EU Emissions Trading Scheme (ETS), it establishes a
system of allowances for two commitment periods
through 2012. For the rst period, 2005 2007, some
11,500 installations are involved in the ETS. Of these,
approximately 90 are operated by ExxonMobil
companies or joint-venture partners.
While the system for allowances was dened
when the scheme was adopted in October 2003,
the procedure for monitoring emissions was not.
Requirements were laid down in an EU decision,
but for participating companies and the trading

Creating a versatile document, and making it


readily available. Develop a procedure that would
meet EU requirements and yield consistently accurate measurements, within an acceptable range of
uncertainty: This was the challenge engineers at Esso
Nederland BV solved in 2004 to ready their renery
for ETS participation. The Dutch governments early
preparation for ETS, combined with its tradition of
working closely with industry, set the stage for the
Rotterdam renerys early initiative and timely approval of its 150-page protocol document. Quickly
realizing its wider potential value, the renery
concluded that the document could serve as an
example not only for rening, but also for chemicals
processing. Esso Nederland posted the document
on the EU Web site and distributed the template to
all of the national trading associations. While some
continued to develop their own approach, others,
such as the German petroleum industry, largely adopted the templates structure. By fostering a more
unied standard, the protocol helps to provide a
more consistent basis for measurement and trading.
Putting the protocol in service. Arriving at a unied standard for an ETS monitoring protocol was
not easy. In some cases, nations remain committed
to their own individual guidelines. For that matter,
the protocol itself is a living document that requires
regular updating. For example, after the rst external
verication of the Rotterdam facility, auditors recommended potential improvements to the way measurements are made. Still, the EU is making progress
toward a standardized approach: The European
Commission and European member-states are now
establishing procedures for the period 2008 2012.
And as for Esso Nederland BV itself? As of yearend 2005, external auditors had completed an initial
verication for all of the companys major reneries, chemical plants, and upstream operations. The
three-day process involved a pre-audit visit, audit
visit, and post-audit review. Esso Nederland BVs
emissions reporting, along with all ExxonMobil ETS
sites in Europe, was third party veried during the
rst quarter of 2006.

Case study: United States

Addressing a key global challenge


What:
A fundamental research
program focused on
the development of
lower-greenhouse-gasemissions technologies,
which can help meet
future energy demand.

Three research efforts addressing potential breakthroughs in energy conversion through biological
processes;
Two

programs exploring the basic science underlying the operation of fuel cells;
Two programs applying novel approaches to the
capture, separation, and sequestration of carbon
dioxide;

Why:
To nd long-term
solutions to address
the risk of global
climate change.

research effort seeking to improve understanding of new fuel formulations that may lead to new,
lower-emissions transportation options; and,

Where:
Stanford University,
California, and other
universities and
research institutions
around the world.
Who:
GCEP has four sponsors: ExxonMobil,
General Electric,
Schlumberger, and
Toyota.
When:
The program was
launched in 2002.
Sponsors will invest
a total of $225 million
over 10 years.

How:
Provide signicant
funding to a leading
research institution with
a history of successful
interaction with industry, a broad range
of intellectual skills,
and the will to build a
world-class program.

A program seeking to use new materials and


design techniques to develop novel membranes
for use in carbon dioxide capture and separation.

GCEP: In 2005, a far-sighted program


based on an innovative collaboration between
academia and industry authorized 12 new programs
totaling $20 million to research programs to identify
technologies that may someday help to meet the
worlds growing energy needs while minimizing
emissions of greenhouse gases.
A need for innovative technology to build
global capacity. Innovative technology may hold
the key to meeting the intensive energy and environmental demands of the future. However, much
of that technology does not yet exist in commercial
form. For this reason, as noted on page 29 of this
report, ExxonMobil initiated the largest privately
funded low-greenhouse-gas-energy research effort
in history, the Global Climate and Energy Project
(GCEP) (gcep.stanford.edu.)
A growing portfolio of promising projects. At
year-end 2005, researchers were leading a total
of 27 energy-related research programs. The new
programs, which signicantly broaden GCEPs
scope, include:
Three

studies investigating novel approaches to


the design and fabrication of solar cells, with the
goal of developing efcient and low-cost options
for converting solar energy to electricity;

International research partners join in. The


new programs also broaden GCEPs academic
collaborations and global reach. GCEP programs
are now taking place at the Energy Research Centre
of the Netherlands (ECN), the Delft University of
Technology (TU-Delft), Swiss Federal Institute of
Technology Zrich (ETH Zrich), Carnegie Institution
of Washington, University of Montana, University
of New South Wales in Australia, and the Research
Institute of Innovative Technology for the Earth in
Japan. Discussions between Stanford and other
institutions are also under way. (For a complete
report on current projects, go to gcep.stanford.
edu/research/technical_report/2005.html.)
ExxonMobil hopes that GCEP research ndings will
ultimately lead to the development of market-ready
technologies. Shorter term, we hope GCEPs efforts
will stimulate a broader discussion of energy issues
within academia and inspire further partnerships
between industry and institutions of higher learning.
To these ends, GCEP held its rst energy research
symposium in 2005. The four-day event, hosted by
Stanford, drew distinguished speakers, researchers,
and business leaders from around the world. It is one
of many ways Stanford and ExxonMobil, together
with the other sponsoring companies, will continue to
publicize research results as they become available.

39

Case study: Gulf of Mexico

Getting back to business as usual


What:
Restoring operations
following Hurricanes
Katrina and Rita.

two weeks of Katrina, all major import facilities and


product pipelines were operating at full or only
slightly reduced rates. All but about 5 percent of
U.S. rening capacity had returned, and all but 15
percent of U.S. oil and 6 percent of U.S. gas had
been restored.

Why:
To restore 100-percent
capability in a safe and
efcient manner while
providing for employees in communities with
longer-term needs.
Where:
ExxonMobil facilities
in affected areas of
the U.S. Gulf Coast,
principally including
reneries and other
facilities in Baytown
and Beaumont, Texas;
and Baton Rouge and
Chalmette, Louisiana.
Who:
Roughly 22,000 U.S.
Gulf Coast employees
directly and indirectly
affected.
When:
Recovery operations
are ongoing.
How:
Enact established
emergency preparedness plans.
Conduct emergency
operations from
pre-determined contingency locations.
Post-hurricane,

establish contact with


all employees and
assess their situations.
Assess damage and
determine logistics
of restoring facilities
to operation.
Safely and reliably
bring critical systems
online.

40

Hurricanes vs. preparedness and planning.


Three ExxonMobil reneries were shut in as a result
of the hurricanes: at Baytown and Beaumont in
Texas, and at Chalmette Rening (a joint venture
with Venezuelan-owned PDVSA) in Louisiana. While
Baytown did not receive any signicant damage,
Beaumont lost power for more than a week, and
Chalmette, directly in Katrinas path, suffered even
more extensive damage.

Hurricane aftermath:

When Hurricanes
Katrina and Rita dealt a one-two punch to the U.S.
Gulf Coast, ExxonMobil operations quickly rerouted
crude oil supply, and reneries came back online in a
safe and timely manner while also providing support to employees, coordinating with communities,
and performing environmentally responsible cleanup.
Crisis and recovery. In late summer 2005, Hurricanes
Katrina (August 29) and Rita (September 24) devastated much of the U.S. Gulf Coast. Hurricane Katrina
caused the evacuation of 80 percent of the manned
platforms in the Gulf of Mexico, destroying 40 and
severely damaging many more. It shut nine major
reneries and closed a number of major pipelines.
According to the Minerals Management Service, as
of September 1, Gulf of Mexico oil production was
reduced by 1.356 million barrels per day, or more
than 90 percent of production, as a result of Katrina.
Natural gas production was similarly shut in, by 7.866
billion cubic feet per day, or nearly 79 percent of total
production. At one point, almost 29 percent of the
nations domestic rening capacity was shut down.
At the same time, even before the hurricanes made
landfall, shippers rerouted tankers, reners recalibrated output and traders reallocated resources to
help ensure a steady supply of oil and gas. Within

The decision to shut in a renery carries signicant


economic and human resource consequences, and
involves a careful assessment of risks. The process
to bring a renery down and then back up again
is time-consuming and complicated. Additionally,
there is always a possibility that a renery wont
come back online quickly to full capacity.
For all the hurricanes impact at Chalmette, the
renerys emergency preparedness plan helped to
minimize damage and maximize safety: In the face
of Katrinas last-minute change of direction on
Friday, August 26, Renery Manager Albert Stroink
called for a shutdown on Saturday, August 27. By
8 a.m. Sunday morning, shutdown operations were
completed without incident. Aside from eld safety
group leader Pete Daggett, who stayed behind as
part of the parishs emergency response operation,
the facilitys emergency operations crew (EOC) monitored events from a temporary command center in
Vicksburg, Mississippi, some 250 miles away.
Solving logistics and supply issues. ExxonMobils
Baton Rouge complex faced a different set of challenges. While wind speed from Katrina did not cause
signicant damage, the complexs command team
needed to focus on offsetting the loss of natural
gas supplies, the interruption of feedstock, and the
closing of shipping lanes and pipelines.

The complex responded quickly to purchase alternate gas supplies, use alternate fuels, maximize onsite fuel gas production using available feedstocks,
and shed less critical fuel-consuming units. As a
result of this effort, the complex was able to run at a
reduced rate versus shutting down and undergoing
a lengthy restart.

Baton Rouge responders


were part of the rescue
effort in New Orleans.
Sitting in one of the boats
they used in the rescue
are Bubba Adams (front,
left), Ray Pratt (front, right),
second row: Dwayne
Cobb, Terry Ward, Claire
Donaldson, Bernie David,
Barry Miley; third row,
standing: Dickie Hamilton,
Robert Davidson, Wayne
Rutherford, and Chris
Baxter.

Meanwhile, Robert Davidson, assistant re chief at


the Baton Rouge renery, assembled a crew of 11
employee volunteers and launched four boats into
the oodwaters of eastern New Orleans. Working
33 hours straight and often risking their own lives,
the team pulled more than 1500 people from attics
and roofs.
In Houston, the companys Upstream headquarters,
the threat of Rita ultimately created more challenges
than did the hurricane itself, spurring an enormous
trafc jam as the citys population made an exodus
from the coast. With the temporary closure of all fuel
terminals, gasoline supplies were limited as well.
Recognizing the need for fuel, ExxonMobils north
Houston terminal quickly re-opened within hours
thanks to the determination of a small team led
by Walt Clay, terminal superintendent, and Jesus
Terrazas, foreman. The terminal crew was able to
keep government, hospitals, rst responders, and
the National Guard supplied with fuel. Some military
vehicles, with unusual fuel intake congurations,
required the terminal team to devise on-the-spot
engineering solutions to enable safe fueling as well.
Priority number one: people. Two days after
Katrina passed, some members of Chalmettes EOC
moved from Vicksburg to Baton Rouge to begin
the recovery process. Their rst priority: to establish
contact with all employees, assess their situations,
and answer their questions.
By October 12, the company had accounted for
all employees at its Chalmette and Beaumont facilities. Thankfully, not a single person had been lost
or injured. At the same time, many suffered severe
property losses.
With no power or roads, and with few buildings in
the surrounding St. Bernard Parish intact, rebuilding the workforce sometimes meant providing basic
necessities. Up to 350 Chalmette renery workers
displaced by the hurricane took up residence in a
temporary village built in the renerys main parking
lot. Shifts were adjusted to allow workers multiple
days off to deal with their personal affairs.

Restoring refinery and pipeline operations. Our


second priority was to assess damage and gure out
the logistics of restoring operations. At Chalmette,
this meant working without infrastructure, power,
water, or access by land. For ExxonMobils Louisiana
and Mississippi pipeline facilities, this meant restarting operationsin many cases within days despite
heavy damagewithout normal e-mail or local area
network access, and often without normal pipeline
communications. As a result, crews maintained a
24 / 7 presence at many remote eld locations.
At Chalmette, one of the rst steps of the restoration team, which began to return to the renery on
September 8, was to establish reliable power despite
severe damage sustained by the local power system.
Despite obstacles, internal switchgear was lined
up by October 11 to accept power. By October 15,
the process of powering up units could begin. By
October 19, product was once again on its way
to market. On October 21, the renery processed its
rst load of crude, and on October 24, gasoline was
shipped out from the dock. Fully operational, the
renery has a capacity of 190,000 barrels a day.
The relatively quick pace of restored operations,
limited impact on the environment, and safety of
ExxonMobil employees in the Gulf were due to the
Corporations global emergency preparedness plan.
This plan is tailored by each business line and individual facility to its own circumstances and needs.
It doesnt matter what part of the world youre
in or what part of the business youre in, says
Scott Joublanc, manager of emergency responseAmericas, ExxonMobil Rening and Supply. When
it comes to emergency preparedness, the basic
procedures are the same. Its that consistency that
allows us to be procient.

41

Case study: The cost of energy

Investments, prices, and prots


2005 Average retail gasoline price and taxes

ExxonMobil investments 20012005

Price ex Tax
Source IEA

($ U.S. billion)

Tax

($US /gal)

Middle East
$4 billion
Russia/
Caspian
$7 billion
Asia Pacific
$7 billion

Canada

Japan

Spain

France

Germany

Italy

U.K.

U.S.

Latin America
$2 billion

North
America
$25 billion

Africa
$15 billion
Europe
$14 billion

0
Total: $74 billion

We believe that a fundamental aspect


of corporate citizenship is using the companys earnings to responsibly meet the worlds growing energy
needs while delivering value to our shareholders
and competitive prices to our customers.
A huge need for investment. The International
Energy Agency (IEA) estimates that over $6 trillion in
oil and gas investment will be needed for the period
2004 through 2030 to meet global energy demand
a total investment requirement nearly half the size
of the entire U.S. economy.
To help meet this need, ExxonMobil is investing at
record levelsmore than $74 billion on six continents over the last ve years and nearly $18 billion
(or $50 million a day) in 2005 alone.
These investments enable us to search for new supplies, build new production facilities, expand rening
capacity, and deploy new environmentally sound
technologies. For example, we are investing in a $14
billion project to increase supplies of liqueed natural gas to world markets. In the last three years alone,
we have increased our crude production capacity in
West Africa by more than 1 million barrels a day; and

42

through efciency gains and technology, our U.S.


rening capacity expansions over the last 10 years
equate to three new, average-sized reneries.
Earnings help fund long-term investments.
Earnings are important for meeting these massive
global energy requirements, because they enable
us to continue making sizable investments in energy
production and technology that benet everyone
in the long run. But the long-term nature of our
projects means that while earnings go up and down
with the business cycle, our commitment to plan and
invest for the future cannot. Thats why, over the last
15 years, our total investments of $210 billion exceed
our total earnings for the period.
In 2005, ExxonMobils earnings set a record, mainly
due to the price of the commodity we sell. However,
the scale of our earnings needs to be seen in the
context of the scale of our business. The energy
business is so huge that ExxonMobil alone incurred
$335 billion in costs in 2005including taxes.
This is more than the U.S. federal governments
entire Medicare bill for the year, and represents a
relatively small portion of the industrys costs, as
ExxonMobil accounts for just 3 percent of global
oil and gas production.

Given the volumes, costs, and investments involved


in energy production, the revenues, and earnings
numbers can appear very large. However, when
measured on a cents-earned-per-dollar of revenue
basis, recent oil and gas earnings are in line with
other industries. In fact, several industries earned
signicantly more on this measure, as the chart to
the right shows.
Earnings and U.S. pump prices. Recent high earnings have caused many people to ask whether there
is a relationship to higher energy costs that consumers have been facing, particularly at the pump.
Taking last years average U.S. pump price of $2.27,
20 percent on average is accounted for by the
amount we paid in federal, state and local excise
taxes. A further 27 percent reects the cost of rening, marketing, and transportation. For ExxonMobil,
that 27 percent represents about 23 percent in costs
and about 4 percent (or 10 cents per gallon) in earnings for our U.S. rening and marketing operations.
Together, these components account for 47 percent
of the price.
By far, the largest individual component of the
pump priceapproximately 53 percent on averagereects the amount paid for crude oil.
While ExxonMobil is a major producer of crude oil,
we produce well under half the amount required
to feed our reneries and less than a third of the
amount that is sold to consumers as petroleum products. The shortfall represents the largest component
of our own annual costs. In 2005, we spent a massive
$185 billion buying crude and products, at prices
that uctuate daily with the market.
The energy prices consumers pay are driven by energy markets. The price ExxonMobil pays for crude
oil in the global marketplace is the primary factor
in the price consumers pay at the pump.
Can U.S. energy prices be reduced? If lower
prices for consumers are a priority, then policies
should be considered that will increase supply, both
foreign and domestic. ExxonMobil believes that if
the United States extensive oil and gas reserves
were made more accessible, supply would increase,
thus reducing the pressure on prices.
Another opportunity would be to reduce the number
of boutique fuels that oil companies are required to
manufacture. To satisfy an array of disparate state
and local regulations, the U.S. oil industry currently

Oil industry earnings in line with other industries


In 2005, the oil industry registered its highest earnings ever. However, oil company earnings
on a prot per dollar of revenue basisremained in line with other U.S. industries.
2005 third quarter earnings (cents per dollar of sales)

Pharmaceuticals
and biotechnology

18.5
18.0

Banks
Semiconductors and
semiconductor equipment

14.1
13.4

Diversified financials
10.1

Consumer services
9.1

Telecommunication services

8.5

Food, beverage, and tobacco


Oil and natural gas

8.2

Real estate

8.0

Capital goods

7.1

All industries

6.8
6.5

Utilities
Consumer durables
and apparel
Commercial services
and supplies

5.9
5.0
4.8

Materials
2.8

Insurance

2.5

Food and staples retailing


0

10

15

20

Source: Company filings as reported by Oil Daily for the oil and gas industry, and by Pricewaterhouse
Coopers LLP from data compiled by Standard and Poors Compustat for all other industries.

manufactures some 20 different recipes for gasoline.


By rationalizing the number of these specialty fuels,
ExxonMobil and other companies could bring fuels
to market more efciently and cost effectively.
In addition, policies allowing oil companies to freely
purchase new renery equipment as needed would
also be useful. ExxonMobil and other companies in
the United States are discouraged from purchasing
new renery equipment by regulations that call for
the replacement of additional equipment, not just
equipment directly in need of replacement, at the
time they wish to make an upgrade. As a result, old
equipment remains in service. In addition to making
facility improvements cost prohibitive, these regulations inadvertently curtail the environmental benets
they were intended to bring about.
ExxonMobils commitment is unequivocal: to supply
Americans and the citizens of other nations with the
energy they depend on. As always, we strive to act
responsibly to uphold this commitment, and look
for ways to work together with individuals, organizations, and governments to meet the nations and
the worlds energy challenges.

43

Section ve

Workplace performance
Focus areas

Lead in health
and safety

Promote safety
within our industry

Address local
health issues

Develop our
workforce

In 2005, ExxonMobil
continued its industryleading safety and
health performance.

In 2005, we continued to
share best practices in
safety internationally,
through initiatives such as
sponsorship of the Robert
W. Campbell Award.

ExxonMobil addresses
local health issues that
impact our workforce
around the world,
particularly malaria
and HIV/AIDS.

We have built a diverse


global workforce focused
on superior business
results. In 2005, we introduced a new training
program to build skills
for working effectively
in global work teams.

60

reduction
in lost-time
incidents

Since 2000, we have


reduced employee
lost-time incidents by
60 percent.

ExxonMobils global health and


safety goal is zero injuries and illnesses. We strive for
an incident-free workplace and a culture that complies with our clear and simple objective: Nobody
Gets Hurt. We believe a companys commitment and
performance in the areas of safety, health, and the
environment are closely tied to outstanding performance in all other aspects of operations.

Health and safety management


The health and safety policies set by ExxonMobil
and adopted by its afliates reect our commitment to high operational standards. To help meet
this commitment, the company has developed the
Operations Integrity Management System (OIMS),
discussed on pages 1819. OIMS provides a robust
management framework that addresses safety,
health, environment, and security requirements.
Consistent with our constant pursuit of Nobody Gets
Hurt, in 2005 we inaugurated a new reporting system
called IMPACT, which will expand our ability to collect
and analyze information on health, safety, and environmental incidents. IMPACT will enable us to look
beyond statistics and analyze lessons learned, causal
factors, and OIMS improvements on a global basis,
applying learnings across multiple sites.
Occupational injuries and illnesses. In 2005,
ExxonMobil continued its industry-leading safety
and health record. Our employee lost-time incident
rate was 0.06 per 200,000 work hours in 2005, which

44

is up slightly from the prior year. Our contractor losttime incident rate at 0.05 per 200,000 work hours
surpassed employee performance for the rst time,
and was the lowest ever. Our employee and contractor total reportable incident rates were 0.37 and 0.45,
respectively, in 2005. We have reduced employee
lost-time incidents by 90 percent since 1994, and by
60 percent since 2000.
Tragically, we had eight workforce fatalities in
2005three employees and ve contractors. Three
were the result of motor vehicle incidents and two
were caused by falls. Fire, asbestos exposure, and an
act of violence accounted for the remaining fatalities.
All fatalities, injuries, near misses,and asset losses
are fully investigated to prevent similar incidents
in the future. We will not be satised until we have
achieved a work environment in which Nobody
Gets Hurt.
ExxonMobil is addressing the varied health risks,
both work-related and nonwork-related, among
our employees and in the communities where
we operate. In 2005, there were 58 work-related
employee illness cases among our approximately
84,000 employees. Of these, 14 involved lost time.
Seventy-one percent of the lost-time illnesses and
29 percent of the recordable incidents were the
result of a single food-borne illness incident at one
of our U.S. ofces. With health as with safety, we
capture what we learn from all incidents and review
procedures to prevent recurrences.

Lost-time injuries and illnesses

Total recordable incident rate


ExxonMobil employees
ExxonMobil contractors
U.S. petroleum industry benchmark

ExxonMobil employees
ExxonMobil contractors
U.S. petroleum industry benchmark

0.9

(Incidents per 200,000 work hours)

3.0

(Incidents per 200,000 work hours)

0.6

2.0

0.3

1.0

0.0
94

95

96

97

98

99

00

01

02

03

04

05

Workforce participation
Active employee and contractor involvement is
critical to achieving our safety, health, and environmental objectives. Employees and contractors
throughout the company participate in safety teams,
conduct safety surveys, contribute to incident
investigations, and suggest ongoing improvements
in safety procedures. Our commitment to safety
starts at the top and is driven throughout the business. For example, our corporate headquarters in
Irving, Texas, achieved 1000 days without a lost-time
incident at the end of 2005.
Workforce involvement through behavior-based
safety programs, such as job observation and
intervention programs, is a requirement of OIMS.
It has helped strengthen the shared responsibility
of everyone in our workforce, and has led to signicant performance improvement. ExxonMobils
deep commitment to safety in our workplace and
communities is evident around the world. Below
are a few examples.

Safety and communityFrance. In France,


ExxonMobil companies have 2600 employees
and 2000 contractors involved in petrochemical,
lubricants, and rening activities in the Port Jrome/
Notre-Dame-de-Gravenchon area. In 2005, the
organization began several initiatives to build upon
the already-strong safety culture at company sites
and surrounding communities. One was the launch
of a dedicated week for safety awareness in the town
of Notre-Dame-de-Gravenchon in mid-October, with
several thousand people participating in 25 conferences and meetings on issues such as crisis communication and response preparedness. The weeks

0.0
95

96

97

98

99

00

01

02

03

04

05

special events included a public information session


about industrial risk prevention, accompanied by
a brochure distributed to community members
summarizing safety principles in case of an emergency situation.
Safety and schoolsMalaysia. In 2005,
ExxonMobil Malaysia expanded its occupational
safety and health program for schools in the local
communities after a successful pilot project in 2003
and 2004. The aim of the Occupational Safety and
Health in School project is to establish a common
understanding of safety and health between students, teachers, administrators, and other support
staff to build awareness and create a positive learning environment.
Road safetyglobal. ExxonMobil employees and
contractors deliver fuel to service stations throughout
the world. Our vehicle incident rate has improved
by 50 percent since 2000 and leads the industry. Our
2005 worldwide performance was 0.76 incidents per
million miles driven, less than 20 percent of the U.S.
distribution industry rate.
We are actively involved in addressing safety
considerations that result from increased trafc
and accompanying road safety issues in locations
around the world. For example, ExxonMobil Hong
Kong has established a long-term partnership with
the Hong Kong Road Safety Council, Transport
Department, and Kwai Tsing District Council Road
Safety Campaign Committee to enhance the general
publics road safety awareness. In 2005, our afliate

45

Workplace performance
Henry Choo, a senior
technician at the
Singapore renery,
instructs a contractor
on the proper use of
a self contained
breathing apparatus.

Safety in practice
Active employee participation is a key to achieving an excellent safety and
health record at the Singapore renery and the Singapore chemical plant.
A day in the life of Henry Choo, a senior technician at the Singapore renery, illustrates this.
Henry starts his day by checking his personal safety plan before making his
rounds in the plant and ensuring that all workers in his area are following
appropriate health and safety procedures.
After his rounds, he enters his workplace safety observations into a central
database where the ndings will be shared by all. He is then summoned to
participate in a job safety analysis for a difcult piece of work. An hour later,
the safety plan and work permit are nalized. Later, he attends his monthly
OIMS network meeting. Today, the network is reviewing articles to contribute to the plants weekly safety, health, and environment newsletter.
For Henry and all of our employees, being safe is an attitude that is important both on and off the job. An off-the-job safety committee and a health
promotion team plan wellness campaigns and health fairs to help employees remain safe and healthy outside of the workplace.

sponsored a number of road safety activities targeting different groups of road users including professional drivers, the elderly, new immigrants from
mainland China as well as kindergarten, primary, and
secondary school students. In the United Kingdom,
we sponsored the Safe Drive Stay Alive program,
a stage show designed to make young people
stop and think about the consequences of careless
driving. In the Netherlands, we donated funding to
establish an educational trafc garden in schools in
Utrecht to help promote road safety among children.

46

Contractor safety. ExxonMobil recognizes that a


passion for safety starts with leadership and extends
to our entire workforce, including contractors. During
2005, ExxonMobil Development Company sponsored contractor safety forums for key drilling and
project contractors. These forums brought key operations and safety leadership personnel together to
discuss challenges, opportunities, and plans for the
future on safety, health, and environmental issues.
A total of 442 personnel from 97 companies around
the world participated in these global forums.
Several additional regional forums were held, including sessions in Nigeria and Russia. In September
2005, Exxon Neftegas Limited (ENL) held its second
annual Contractor Safety Forum on Sakhalin Island
attended by 140 contractors from 64 leading companies to plan strategies for Taking Safety to the
Next Level. This two-day event was attended by
the Sakhalin vice governor and included an awards
ceremony to recognize the contractors who had
improved safety performance for the past year on
the project. Notably, the safety indicators for this
construction project, which has now accumulated
19 million work hours, are ve times better than the
worldwide industry average.
2005 safety awards. In delivering on high safety
expectations, all of our sites are expected to have
outstanding safety performance. Below are a few
examples highlighting awards received for excellence
in workplace safety.
ExxonMobils subsidiary in Indonesia, ExxonMobil
Oil Indonesia Inc. received the Patra Nirbhaya Karya
Utama Safety Award. This award, from the Ministry
of Energy and Mineral Resources, recognized the
achievement of 20 million work hours without a
lost-time incident in our operation in Aceh Province
in 2005.
In recognition of ExxonMobils programs and
systems for providing a safe work environment for
employees, ExxonMobil Lubricants and Specialties
facility in Port Allen, Louisiana, was awarded Star
status in 2005 by the U.S. Occupational Safety
and Health Administrations (OSHA) Voluntary
Protection Program.
In 2005, ExxonMobils complex in Baytown, Texas,
received numerous awards from the National
Petrochemical and Reners Association, one of
which recognized a 25-percent improvement in
the total recordable incident rate when compared
to the average of the previous three years.

Through innovative behavioral road safety training,


ExxonMobil Aviation has achieved a 50-percent
reduction in the number of driving incidents with
its eet of 1200 airplane-refueling vehicles based
at airports around the world. ExxonMobil Aviation
won the U.K. Energy Institutes top award for this
groundbreaking initiative in November 2005.

Improvements are being implemented at many sites


consistent with baseline countermeasures that have
been dened for each facility via application of a
facility security exposure matrix. Security measures
take into account perceived risks, the practicality of
potential countermeasures, and relationships with
the communities in which we operate.

Sponsoring the Robert W. Campbell Award. To


promote the sharing of best practices internationally, ExxonMobil is contributing $1 million over ve
years to co-sponsor the Robert W. Campbell Award,
together with the U.S. National Safety Council. The
award honors companies that demonstrate leading
safety, health, and environmental performance, and
link that performance to productivity and protability. Johnson & Johnson was named the 2005 Robert
W. Campbell award winner.

Workforce health

This award program sponsors the development of


case studies led by the U.S. National Safety Council
in partnership with Minerva Canada. The rst case
study showcased safety, health, and environmental
best practices of 2004 winner Noble Corporation,
and promoted these for integration into university
curricula worldwide. Minerva Canada is a nonprot
organization that works to introduce occupational
health and safety management into university
curricula, especially in business and engineering.

Security
In 2005, we formally integrated security expectations
into our Operations Integrity Management System.
This integration has served to more deeply embed
security into day-to-day operations. In addition, we
formed a corporate security network to help ensure
consistent application of initiatives and programs
worldwide. Security awareness and training were
further strengthened in 2005 by the rollout of the
Security Is Everybodys Business campaign,
supplemented by the identication and training of
site security contacts throughout the Corporation.

Commitment to health promotion. ExxonMobil


has long recognized that employee health issues
are equally important whether work-related or not.
It is part of our corporate health policy to provide
voluntary health promotion programs designed to
enhance employees well being and productivity.
The types of programs that assist employees with
personal health issues vary by location because of
cultural differences and the maturity of the medical
and public health infrastructure. In projects in developing countries, ExxonMobil employs a strategic
health management approach. This framework
provides guidance for incorporating workforce and
community health considerations into development
plans for major projects. Our efforts to protect worker
health also include malaria control programs and an
HIV/AIDS prevention employee education program.
Health reporting system. The health reporting
system (HRS) is a tool developed by ExxonMobil
that is particularly applicable to projects in developing countries. HRS is designed to collect and assess
clinical information from occupational health clinics
serving our employees and contractors in remote
locations where that information would otherwise
be unavailable. HRS documents all health events
receiving eld-clinic medical attention.

Consistent worldwide security metrics have been


dened and are being utilized by the businesses.
This has helped reinforce our expectation that
security be managed and monitored as rigorously
as we do all other aspects of operations integrity.

HRS provides consistent data to monitor health patterns and trends, and to generate objective indicators of health performance. This information is used
by health and safety professionals for early identication and management of emerging health issues,
assessment of medical referrals and evacuations,
feedback to clinicians, and for guidance in the development and assessment of prevention programs and
health care services. HRS is currently being utilized
in Chad, Cameroon, and Sakhalin Island.

Our security managers actively participate in


governmental and industry forums to develop and
enhance our risk-management methodologies,
threat-assessment capabilities, and technical
security applications.

Workplace malaria control program. Our workplace-based malaria control program (MCP) has
contributed to a decrease in the number of malaria cases among our expatriate employees, local
employees, and contractors. The workplace MCP

47

Workplace performance

Improving road safety in Qatar


While reviewing the unusually high number of driver near misses on local
roads, employees on an ExxonMobil safety committee in Qatar questioned
what could be done to address vehicle safety in the country. The pace of
a rapidly growing economy, mounting congestion, and increasing access
to high-powered vehicles had made road safety a rapidly escalating issue.
The committee initiated a petrochemical industry activity aimed at working with the Qatari government to accelerate its road safety initiatives.
Together, nine major companies formed a senior steering committee and
a separate technical committee with safety, health, and environmental
representatives. These committees worked closely with the Qatari Ministry
of the Interior as well as the state governments Trafc Department, raising
$350,000 to hire a world-class road safety organization to undertake a
six-month study to advance the pace of road safety.
Since the effort began, the department has installed over 100 speed
detectors and red light cameras, and established a new 50-ofcer enforcement unit, with the commitment to increase staff by an additional 100
ofcers over the next year.

requires that ExxonMobil employees and contractors working in malaria-prone areas use a four-step
strategy to combat malaria: awareness, bite prevention, anti-malarial medication, and early diagnosis
and treatment.
In 2005, ExxonMobil initiated a number of MCP
improvements including the implementation of a
malaria visa process for travelers, which streamlined
training and predeparture preparations. The visa
requirement will soon be extended to our contractors and will further ensure that workers traveling
to countries in which malaria is a health risk are
prepared to protect themselves before they arrive.
In addition, African afliates are now distributing
anti-malarial survival kits to traveling employees
to help identify and treat malaria cases that might
develop in remote areas.
StopAIDS. In 2004, ExxonMobil initiated a comprehensive workplace program known as StopAIDS to
help address the devastating HIV/AIDS pandemic
and its potential impact on our workforce. In July
2005, we met our goal of introducing the program
in more than 20 sub-Saharan African countries. The
primary aim of StopAIDS is prevention education
to encourage safer behavior. StopAIDS education
covers topics such as understanding HIV/AIDS,

48

assessing personal risk, protection methods, the role


of counseling, and living positively with HIV/AIDS.
The program involves situation analysis, testing,
awareness and education, treatment, monitoring,
and communication.
Throughout the program, ExxonMobil encourages a
climate of caring and trust to help overcome cultural
challenges and to avoid the stigma often associated
with HIV/AIDS. We do not test for HIV, and HIV status
is not a factor in deciding an employees ability to
work. For more information on our response to HIV/
AIDS, please see our case study on page 37.
Promoting employee health in developed
countries. Beyond addressing health risks in
developing countries, evaluating employee health
in developed countries requires different tools
and approaches. One of these is the ExxonMobil
Health Status Registry (EHSR) which is maintained
and analyzed by the epidemiologists at ExxonMobil
Biomedical Sciences, Inc. (EMBSI). The EHSR
database contains work history and health status
information for more than 200,000 former and current U.S.-based employees of ExxonMobil and its
heritage companies. This database, the largest of its
kind in the oil and gas industry, allows for efcient
assessment of mortality patterns among this population. EMBSI epidemiologists maintain the registry
by systematically collecting vital statistics from the

Product safety policy

1.

2.

Identify &
manage risks

Specify
precautions

Identify and manage


risks associated with
our products; decline
to manufacture or sell
products that cannot,
through proper design,
procedures and practices, provide an
appropriate level of
safety for people and
the environment.

Specify precautions
required in the handling,
transport, use, and disposal of our products,
and take reasonable
steps to communicate
them to employees,
customers, and others
who may be affected.

states, and categorizing and storing job history and


mortality data. EHSR information is used for periodic health studies that analyze broad and causespecic mortality among employees and compare
it to the general population. To date, analyses have
demonstrated a favorable overall health status for
our employees, and conrm that health risks are
being managed effectively.

Product stewardship
ExxonMobil applies a rigorous and consistent approach to identify and evaluate risks associated
with new and modied products and their manufacture, use, and disposal. Similarly, ExxonMobil is
continuously adapting new technologies to improve
product performance. In order to ensure minimal
effects on both people and the environment, we
regularly use new, scientic information in the production of our additives, which are used for industrial
diesel engines, lubricants, and metalworking.
ExxonMobil tests and monitors product safety and
health factors. We communicate results characterizing any risks and specify proper management
processes to customers, third parties, and the public.
The product safety policy set by ExxonMobil and its
afliates reects our commitment to high operational
standards. To help meet this commitment, the company developed the Product Stewardship Information
Management System (PSIMS). PSIMS provides a

3.

Comply
with laws

Comply with all


applicable laws and
regulations, and apply
responsible standards
where laws and regulations do not exist.

4.

ExxonMobil Biomedical Sciences, Inc.


ExxonMobil Biomedical Sciences, Inc. (EMBSI), a global organization
based in New Jersey, is dedicated to providing science-based services to
assist ExxonMobil and its afliates in meeting safety, health, and environmental objectives. EMBSI has a broad range of technical expertise among
its approximately 150-member staff, including toxicology, environmental
sciences, chemistry, epidemiology, human factors, and exposure sciences.
These skills are marshaled to help ensure that ExxonMobils product safety
and health proles are accurately described and that our facilities are built
and operated in a manner protective of safety, health, and the environment.
EMBSI scientists work closely with the Medicine and Occupational Health
organization, whose 500 members include physicians, nurses, and industrial
hygienists, as well as with other individuals across the Corporation dedicated to safety, health, and environmental excellence.

common process and uses a single global computer


system that supports the safe handling, transport,
use, and disposal of our products.
In 2005, PSIMS became fully operational for all
ExxonMobil businesses. Use of PSIMS gives
ExxonMobil tools to assess product characteristics in
compliance with complex laws and regulations in the
countries in which we sell products. Where laws and
regulations do not exist, PSIMS provides responsible
standards to specify precautions to those who might
be affected by our products, including employees,
customers, and suppliers.

5.

6.

Work with
government
agencies

Identify
& control

Conduct
& support
research

Work with governmental


agencies and others,
as appropriate, to
develop responsible
laws, regulations, and
standards based on
sound science and
consideration of risk.

Identify and control


potentially adverse
health, safety, and environmental effects
as priority considerations in the planning
and development of
products.

Conduct and support


research to extend
knowledge about the
health, safety, and
environmental effects of
our products; promptly
apply signicant ndings
and, as appropriate,
share them with our
employees, contractors,
customers, the
scientic community,
governmental agencies,
and the public.

7.

Review
& evaluate

Review and evaluate


our operations to
measure progress
and foster policy
compliance.

49

Workplace performance
The devastation of Hurricanes Katrina and Rita
caused signicant disruption to the supplies of
raw materials critical to the manufacture of many
ExxonMobil products. Assuring availability of these
products in some instances required reformulation
of our products while still meeting customers performance needs. When reformulation was needed,
ExxonMobil scientists evaluated and conrmed the
safety of the products for people and the environment before proceeding with the changes.

Employment policies and practices


ExxonMobils Standards of Business Conduct provide a framework for responsible operations with
regard to employment practices around the world.

We support these standards with guidelines that


ensure we are operating ethically and responsibly
in all our employment practices.
Freedom of association and right to collective
bargaining. We recognize and respect our employees right to join associations and choose representative organizations for the purpose of engaging in
collective bargaining.
Elimination of forced or compulsory labor. We
do not make use of forced or compulsory labor.
ExxonMobil recruits its employees and provides
working conditions, including payment of wages
and benets, in compliance with applicable laws
and regulations.

Our policy on nondiscrimination is clear and straightforward. ExxonMobil


We were
asked

A question about
equal opportunity
protections for gay,
lesbian, and bisexual
employees.
I have been a
shareholder of
Exxon for over 10
years. Overall, I have
been impressed
with the companys
performance as well
as its attitude and
response to global
issues. I am, however,
troubled by the
apparent lack of
effort to address
the companys equal
opportunities policy
to protect gay,
lesbian, and bisexual
employees
unambiguously.
e-mail to
citizenship @
exxonmobil.com

50

policy prohibits any form of discrimination or harassment, including for sexual orientation, in any
company workplace. In support of this position, we maintain a comprehensive education, training,
and stewardship program to ensure this policy is implemented and followed throughout our
worldwide operations.
While having strong anti-discrimination and anti-harassment policies is important, having programs
in place to communicate, enforce, and monitor them is equally critical. ExxonMobil employs a
comprehensive program for making sure the policies are understood and followed by employees
and managers worldwide:
Communicate: Policies are communicated during new-hire orientation programs and through
subsequent business practices reviews, periodic employee mailings, and additional supervisor and
employee training classes. Training includes the use of ExxonMobils Working Together booklet,
which uses case studies, including a case study on sexual orientation, to raise awareness and to
emphasize the companys zero-tolerance policy to all forms of harassment and discrimination.
Enforce: All employees are required by policy to promptly report instances of inappropriate workplace behavior to their management or designated Human Resources contact. Teams of professionals
are assigned to fully investigate these reports. Appropriate discipline is imposed for violations of the
Corporations policies based on the specic circumstances. This can include termination of employment.
Monitor: Senior operating managers are accountable for stewarding the performance of their
organizations in implementing the companys Equal Opportunity Employment (EEO) and antiharassment policies. This includes regular upline reporting of discrimination and harassment
complaints that result in corrective actions.
Do you have a question regarding ExxonMobils employment policies or practices?
Please write to us at citizenship @ exxonmobil.com.

Elimination of child labor. We forbid the use of


children in our workforce throughout our worldwide operations. All ExxonMobil employees are
above the legal employment age in the country of
their employment.
Equal employment opportunity (EEO). Our
policy is to provide equal employment opportunity
in conformance with all applicable laws and regulations to individuals who are qualied to perform
job requirements.
We are committed to promoting a highly productive work environment that treats all employees with
respect, values diverse perspectives, encourages
individual growth and achievement, and rewards
people based on their performance. We have built
a diverse global workforce that is focused on producing superior business results. We are committed
to maintaining an environment characterized by
open communication, trust, and fair treatment.
Nondiscrimination and equal opportunity.
Discrimination and harassment based on any personal characteristic, including sexual orientation,
are not tolerated. ExxonMobils strict adherence to
these policies ensures that employees worldwide
understand and enforce them.
In addition to providing equal employment opportunity, we also undertake special efforts to:
Create

and support educational programs, as


well as recruiting sources and practices, that foster
employment and career development for minorities
and women;

Develop

and offer work arrangements that help to


meet the needs of a diverse workforce in balancing
work and family obligations;
Foster

a work environment free from sexual, racial,


religious, or other harassment;
Make

reasonable accommodations that enable


qualied disabled individuals to perform the essential functions of their jobs; and,

Emphasize

management responsibility in these


matters at every level of the organization.
ExxonMobil also takes afrmative action to employ
and advance qualied disabled U.S. veterans, veterans of the Vietnam era, and other protected veterans.

Harassment. Under our policy, harassment is any


inappropriate conduct that has the effect of creating
an intimidating, hostile, or offensive work environment; unreasonably interfering with an individuals
work performance; or affecting an individuals
employment opportunity. Harassment in any form
is prohibited at ExxonMobil.
We evaluate harassment policy compliance through
an annual stewardship process and we thoroughly
investigate any harassment claims. All employees,
including supervisors and managers, are subject to
disciplinary action, up to and including termination,
for any act of harassment. In addition, contractors
who are in violation of this policy may be denied
access to our work sites.
Nonretaliation and grievance system. We encourage employees to ask questions, voice concerns, and
make suggestions regarding ExxonMobils business
practices. Employees are expected to report to
management suspected violations of the law or of
the Corporations policies or internal controls. Policy
or control issues include employee rights, ethics,
environmental, health and safety-related issues,
and whistle-blowing. ExxonMobil promptly investigates such reports and takes action if warranted. No
retaliation may be taken or threatened against any
employee for voicing concerns. We believe opendoor communication helps promote fairness and
respect for the dignity of all employees, as well as
effective engagement between management and
the workforce.

Global workforce
At year-end 2005, ExxonMobils worldwide workforce numbered approximately 84,000 employees.
Approximately 38 percent of our employee population was located within the United States and
62 percent internationally. Expatriates, dened as
those working outside of their home countries on
ExxonMobil assignments, comprised 4 percent of our
total workforce. In 2005, ExxonMobil paid $12 billion
in salary and benets to worldwide employees.
We are dedicated to maximizing the number of local
employment opportunities wherever we do business. The development of a global workforce that is
representative of our geographic presence promotes
workforce diversity and access to local knowledge,
and helps integrate the Corporation into localities
around the world.

Pablo Cruz
Americas South
Industrial and
Wholesale Manager,
Fuels Marketing
Pablo Cruzs career with
ExxonMobil has spanned
nine jobs in 15 years.
Since he joined Esso
Chile in 1991 as an
industrial sales trainee
and then territory
manager, Pablo has
served as a marketing
analyst in Coral Gables,
Florida, and lead country
manager in Guatemala.
In his current position
as Americas South
industrial and wholesale
manager for our Fuels
Marketing business,
Pablo credits his
advancement to the
various supervisors
during his career who
gave him opportunities
for both technical and
leadership training,
and networking with
colleagues who have
had varied career paths.
Pablo says,As long as
you are exible about
the types of jobs and
locations that might
be offered to you, the
possibilities are endless.
I truly believe that there
are no barriers for
anyone at this company,
regardless of race,
nationality, or gender.
You are the primary
person responsible for
your success.

51

Workplace performance
New professional employees: men/women
U.S.

2005 management and professional new


hires: female hires by region

Non-U.S.

1500

United States
213

Canada
69

Africa /
Middle East
48

Asia Pacific
428

1000

Raquel Castro
scholarship recipient
Our initial studies of
labor markets in a number of developing locations showed a serious
shortage of available
skilled staff during the
1990s. These shortages
were compounded by
serious educational
limitations in some
countries where we
operate. A scholarship
initiative was designed
to directly impact the
quantity and quality
of potential future
employees. Offshore
universities have been
used to ensure the quality of the educational
experience and also to
improve bilingualism
of needed resources.
Particularly in Angola,
we have been very
successful in securing
post-graduate employment for Corporationsponsored scholars.
Over the past ve
years, we have hired
11 students who have
successfully completed
their university degrees.
We have an additional
student in the process
of being hired, and
another who will graduate later this year. Many
of these employees are
doing exceptionally well
and are potential future
leaders of Esso Angola.

52

500

Latin
America
103
Europe
135

0
Men Women

2004

Men Women

2005

ExxonMobil recognizes that investing in local workforces around the world is essential to the long-term
sustainability of our business. We are particularly
focused on hiring local employees in emerging
and developing economies. Local employees are
being trained in increasing numbers for operational
and leadership roles in both their home countries
and around the world. Talented employees may
be developed through assignments throughout
the Corporations global operations. For example,
ExxonMobils Malaysian operations take pride in exporting talent to company locations worldwide, with
over 110 Malaysian professional and management
employees currently working internationally.
In 2005, ExxonMobil hired nearly 2400 professional
employees worldwide. Some 42 percent of these
new hires were women, and more than 70 percent
were hired outside the United States. New-hire
professional employees are classied as such at the
time of employment and typically bring a highly
technical or specialized skill set to the business.
Training and leadership development. By investing in the local workforce and infrastructure, we are
building a legacy of economic progress, enabling
host countries to reap the long-term benets of
their resources. In addition, the development of
employees in a manner consistent with company
policy and cultural expectations is a key benet
the company can offer to society in areas where
we operate. Training and development are also a
part of ExxonMobils program to ensure diversity
and inclusion in the workplace, and to encourage
participation at all levels of the organization.

Total: 996

In 2005, our training expenditures totaled $51.5 million and reached approximately 51,000 participants
worldwide. To strengthen our technical capacity,
we conducted nearly 700 in-house technical courses
for some 18,000 employees.
ExxonMobil identies and develops future leaders on a worldwide basis, drawing upon our diverse
employee population. During 2005, 2100 employees around the world participated in ExxonMobils
leadership-development training programs.
Approximately 20 percent of participants were
women, and 60 percent were non-U.S. employees.
The ExxonMobil Leadership Development Advisory
Group, composed of senior ExxonMobil executives
representing all business units and functions, helps
ensure that corporate leadership training programs
are aligned with development needs and related
business priorities. ExxonMobil offers ve core
leadership development training programs globally, including the Supervisor Program, Enterprise
Leadership Program, Manager Forum, New Leader
Program, and Global Leader Forum. Each of these
programs is designed to build competitive advantage by aligning leaders with ExxonMobils
fundamental business principles, accelerating the
development of effective leadership, transferring
leadership and management best practices across
the Corporation, and focusing learning toward
on-the-job application.

Investing in diversity
As a multinational company with ever-growing
global operations, ExxonMobil considers enhancing employees skills in communicating and working
across cultures to be essential. We have continued
to develop and update several targeted programs
and workshops to provide employees with opportunities to improve their cross-cultural effectiveness.
In 2005, we introduced a new cultural program,
Working Globally, aimed at bridging cultural gaps in
global work teams. We have delivered this program
in several locations, including Bangkok, Budapest,
Curitiba, and Houston. GlobeSmart is another
cultural education asset employed by ExxonMobil.
A Web-based teaching tool, it is designed to provide extensive information on conducting business
in various countries, and is used extensively in the
Working Globally program.
ExxonMobil closely monitors its diversity performance and continuously strives for improvement.
While the principles that form the foundation of our
diversity framework are the same in every country,
we recognize that the denition of diversity varies across the world due to cultural differences.
Therefore, we do not use one global denition of
diversity or one global diversity performance metric.
Improving gender and ethnic balance.
ExxonMobil is committed to improving the gender
balance in our company and to promoting leadership opportunities for women globally. Currently,
women comprise about 23 percent of our worldwide
workforce, excluding company-operated retail stores.
Approximately 11 percent of executive employees
are women, compared to 10 percent in 2002.
In the United States, our focus is on increasing the
representation of women and minorities, including
African-Americans, Hispanics, Asians, and Native
Americans. The percentage of women and minorities employed in our U.S. operations is unchanged
despite an overall decline in the number of U.S.
employees. Minorities make up approximately 31.7
percent of our U.S. workforce, and 19.5 percent of
ofcials and managers.
Support networks. In the United States,
ExxonMobil supports networks for female, AfricanAmerican, and Hispanic employees that provide
mentoring, coaching, and strategies to enhance
personal and professional development. These

Workplace exibility program in action


Rich Molloy, well test specialist
Being in Red Hook, New York, during his fathers
critical illness was very important to Rich Molloy,
a senior engineer at ExxonMobil Exploration
Company. Richs typical activities involve rotating
to various rig sites globally for drill well testing.
When his fathers condition deteriorated last
summer, Rich worked with his management team
to adopt a schedule that permitted working from upstate New York at
times when he was not on-site at an overseas location. This proved to be
an excellent solution that accommodated both personal needs and
business priorities.
Sherry Englande, senior tax attorney
Returning to work after the birth of her second child,
Sherry Englande realized she needed more time to
manage her young family. Working with her management team, Sherry assumed a part-time schedule that enables her to work three days a week, and
her work activities were adjusted to t her new
schedule. Sherry nds the program meets her need
for exibility while allowing her to continue her professional development.

organizations foster open and honest communications with all levels of management on relevant
diversity and inclusion issues. Each of our networks
is sponsored by a senior manager who assists with
aligning the groups objectives with ExxonMobils
business needs. Each of the network groups is open
to all employees. Employee network groups also
contribute time and energy to community efforts by
participating in volunteer activities such as Junior
Achievement, Habitat for Humanity, and the United
Negro College Fund Walk-a-Thon.
Partnerships and internships. In 2005, ExxonMobil
provided more than 650 intern and co-operative
assignments to top students throughout the world.
Through practical work experience, scholarships,
and university grants, ExxonMobil hopes to interest
the best and brightest students in science and
engineering careers.
In several countries, we link our involvement in
education and technology to internships that have
the potential to lead to full-time employment. We
see this initiative as central to our companys health
and future.

53

Workplace performance

Jide Ayo-Vaughan
Deepwater Operations
Manager, Nigeria
When Jide Ayo-Vaughan
became deepwater
operations manager
for Esso Exploration
& Production Nigeria
Ltd., he brought back
to his native country
leadership experience
gained from running the
companys Louisiana /
Gulf of Mexico production operations. He is
managing the start-up
and operation of Erha, a
major new development
off the Nigerian coast.
The development and
training are more standardized now than ever.
This makes it possible
for the non-U.S. professionals to get support
comparable to the
U.S.-based employees.
This is supported even
further as we operate
under global functional
organizations and all
subsidiaries are managed under similar
guidelines with the
same tools and goals.
The company is supportive of the non-U.S.
employees in line with
the company guidelines
and business needs,
says Jide.

54

In Egypt, ExxonMobil has partnered with the Save


the Children Federation in a project named INJAZ
(the Arabic translation of achievement). During the
fall and spring of 2004, ExxonMobil made a strong
contribution to the Egyptian community through the
volunteer work of 18 employees who actively participated in the INJAZ project. Implemented in two
public schools in Cairo, the project enabled students
to benet from employees knowledge of science,
technology, economics, and entrepreneurship.
Volunteers committed one hour per week to attend
classes for a duration of 10 weeks. Throughout
2005, ExxonMobil Egypt continued its participation
in the initiative, increasing the number of volunteers
involved and broadening the school coverage. INJAZ
provides long-term business benet to ExxonMobil
Egypt through nurturing a receptive base of future
leaders and potential employees.
In Brazil, our diversity initiatives encourage the training of students in industry-related subjects in addition to providing funding and access to education.
Many of these students subsequently provide a
pool of potential new hires and future employees.
At inception, the program focused on Afro-Brazilians
who could join Esso Brazils student-trainee program and then potentially join the company. The
Esso School Program, which trains and selects
students to work part-time in our facilities, and
the Mais Integration Program, created in partnership with the School-Business Integration Center
and the Committee for Democracy in Information
Technology, are both efforts to promote education improvements in the country, as well as a more
diverse Esso Brazil workforce.
Creating a more flexible workplace. ExxonMobil
recognizes that employees have needs and priorities
in their personal lives, and that providing exibility
makes good business sense and enhances workplace
productivity. ExxonMobils Workplace Flexibility
Programs were improved in 2005 to strengthen their
effectiveness in a number of areas:
Improvements to increase retention of employees
who need additional exibility to continue employment at various points in their career;

Providing supervisors with tools to foster a work


environment that ensures productivity while making
reasonable accommodations for exibility; and,
Encouraging employees to work effectively, knowing the company will support them as business
needs allow, when they have a personal need.

Prohibiting bribery and corruption


As a matter of policy, ExxonMobil complies with
all governmental laws, rules, and regulations applicable to our business. We expect employee candor
at all levels, and adherence to company policy and
controls. Employees are responsible for reporting
suspected violation of law or corporate policy
to management.
Each year, all managerial, professional, and technical
employees are required to conrm that they have
read and are familiar with the policies set forth in
our Standards of Business Conduct that prohibit
corruption of any type.
Our management framework to prevent bribery and
corruption includes clear guidance on ethics, gifts
and entertainment, conicts of interest, antitrust,
and directorship policies. Sound nancial control is
fundamental to our business operating model, and
we have established effective control mechanisms
for our worldwide operations. Responsibilities for
authorizing, approving, and recording transactions
are appropriately segregated to reduce risks of
a single employee having exclusive knowledge,
authority, or control over any signicant transaction
or group of transactions.
Approximately one-third of corporate business activities and operating units are audited by our internal
audit department each year, and all operating units
undergo regular self-assessments to provide assurance that operating standards are met. ExxonMobil
employs more than 240 internal auditors, who are
deployed throughout its facilities and business units
at an annual cost of more than $50 million. Internal
auditors have unrestricted access to all facilities,
personnel, and records, and are specially trained
to identify and report on control issues. They also
conduct independent investigations of situations in
which noncompliance with ExxonMobils Standards
of Business Conduct may have occurred. Signicant
matters are reported to the Audit Committee of the
Board of Directors.

Every year, internal auditors and management


conduct investigations of suspected violations of law,
business practices, or internal control procedures.
Such violations include conicts of interest, exceeding transaction authority limits, excessive entertainment charges, falsied expense reports or accounting entries, misuse of company purchases and credit
cards, or petty theft. Policy violations by employees
lead to disciplinary actions up to and including
separation from the company.
We provide a number of mechanisms for reporting
suspected violations of law or ExxonMobils business
practices. All persons responding to employees
questions, concerns, complaints, and suggestions

are expected to use appropriate discretion regarding


anonymity and condentiality, although the preservation of anonymity and condentiality may or may
not be practical, depending on the circumstance.
No action may be taken or threatened against any
employee for asking questions, voicing concerns,
or making complaints in conformity with company
procedures, unless the employee acts with willful disregard of the truth. In addition, all payments to third
parties are expected to comply with the Foreign
Corrupt Practices Act and ExxonMobils Guidelines
for Payments to Third Parties.

Workplace
priority areas for

2006

Continue taking action


toward our goal that
Nobody Gets Hurt at all
ExxonMobil locations,
with behavior-based
safety initiatives for employees and contractors.
Company-wide deployment of IMPACT to
further strengthen
incident learnings.
Continue to enhance
global employee skill
development to build
capabilities throughout our worldwide
operations.

The Global Reporting Initiative (GRI)

We were
asked

A question about
Corporate Social
Responsibility
reporting.
I am a student
researching Corporate
Social Responsibility
with a focus on multinational companies,
and I nd the report
very informative. But
why do you not use
the Global Reporting
Initiative (GRI)?

is a voluntary initiative that addresses


the need for companies to adopt a comparable reporting format for citizenship or corporate
responsibility reports. While we recognize the value of this initiative, we have focused on an approach we believe is more relevant to the issues and indicators particular to our industry, while
encouraging effective participation and ensuring governance and transparency of methodology.
Last year, we adopted the Oil and Gas Industry Guidance on Voluntary Sustainability Reporting,
which is most appropriate to our industry yet consistent with many indicators used in the GRI.
This Guidance was developed by the International Petroleum Industry Environmental Conservation
Association (IPIECA) and the American Petroleum Institute (API) through a three-year process.
Participants worked to analyze the risk and opportunities to their sector, share best practices,
and adopt common reporting language and concepts applicable to the oil and gas industry. In this
years report, we have included a table on page 68 that identies the API/IPIECA indicators we
have reported for 2005 along with the corresponding GRI indicators.
In addition to supporting appropriate reporting guidelines, ExxonMobil is actively supporting the
development of guidance for organizational social responsibility in the form of ISO 26000. The
development of this international standard involves governments, industry, NGOs, consumers, trade
unions, and many others, spanning a wide variety of countries in an effort to achieve consensus
on social responsibility options available for all types of organizations.
Do you have a question regarding ExxonMobils citizenship policies or practices?
Please write to us at citizenship @ exxonmobil.com.

e-mail to
citizenship @
exxonmobil.com

55

Section six

Community & social performance


Focus areas

Share best practices


Our worldwide initiative,
Best Practices in External
Affairs, trains and encourages afliates to seek and
practice excellence in
community relationships
at every level.

1200
public consultation
sessions in
2005 in Chad

The Chad-Cameroon
project held 1200 public
consultation sessions
in 2005, reaching more
than 25,000 people.

Engage in
public policy
ExxonMobil employees
engage in public policy
discussions with lawmakers and other policymakers on a range of issues
affecting our business.

Build capacity
Our worldwide afliates
help build capacity in
many communities,
strengthening local
and regional business
environments.

ExxonMobil believes in creating a


positive and lasting social impact by developing
successful partnerships built on mutual trust and
respect. With operations in close to 200 countries
and territories and throughout our 120-year history,
we have a long tradition of making a positive contribution in the communities and economies in which
we operate.

Strategic community investment


ExxonMobil makes a continuous effort to enhance
the quality of our community engagement and
external relations. In 2005, we completed the worldwide rollout of our new Best Practices in External
Affairs (BPEA) initiative. BPEA, now the companys
primary management system for external affairs
globally, is a strategic planning and management
tool that teaches and encourages ExxonMobil
afliates to seek and practice excellence in community relationships at every level. It is an integral
component of our Operations Integrity Management
System (OIMS).
The ExxonMobil BPEA initiative focuses on all aspects of external affairs, ascribing a guiding principle
to each. By keeping the guiding principles exible,
we enable external affairs decisions to be planned
and tailored to the unique business, country, and
community context of every operation.
Community relationships. ExxonMobil is committed to ongoing engagement with our communities. During the life of a project or facility, we
meet regularly with community leaders, community

56

Invest in
communities

Promote security
and human rights

Two programs, the Africa


Health Initiative and the
newly launched Educating
Women and Girls
Initiative, were a focus
of ExxonMobils global
giving in 2005.

An active participant in
the Voluntary Principles on
Security and Human Rights,
we rolled out detailed
guidance for implementing
the principles in seven
countries in 2005.

associations, and NGOs that are interested in our


operations. Dialogue helps us better understand
the viewpoints and concerns of the diverse communities in which we operate, and provides us with
an opportunity to share information on operational
processes, environmental safeguards, future plans,
and strategies.
Sakhalin: consultation is key. In Sakhalin, Russia,
public and government trust in the integrity of our
operations is the single most important resource for
sustaining timely progress toward business objectives.
A strong consultation process with indigenous peoples and other interested local groups has proven
invaluable in bringing real community concerns to
timely mediation and resolution. For example, close
consultation on local needs with the indigenous
people of Sakhalin has helped the ExxonMobil afliate Exxon Neftegas Limited (ENL) understand important local issues. As a result of the consultation, ENL
offered its bridge over Chayvo Bay to local reindeer
herders for their annual migration. The process of
regular and close consultation helps to ensure that
we maintain strong local relationships.
United Kingdom: actively listening. During
development and construction of the South Hook
LNG regasication terminal in Wales, ExxonMobil
and its co-venturer Qatar Petroleum conducted a
large-scale consultation to seek views from those
impacted by the development and to keep people
informed. In addition to conducting multiple meetings with individual groups, we made available
specialists from the project team in convenient

Best Practices in External Affairs (BPEA)

Leadership

Communication

Demonstrate management
commitment to proactive
external relationships
through personal
involvement and active
participation throughout
the organization.

Engage a variety of
audiences on an ongoing
basis in open, forthright,
and proactive dialogue.

Government

Continuous
improvement
Review external
affairs activities annually
to maximize their
effectiveness.

Media
Build and maintain positive
relationships to maximize the
opportunity for communicating
our messages with fairness,
balance, and accuracy.

The BPEA process involves


eight guiding principles against
which we analyze and measure
our interaction and engagement
with the community at large.
These principles are intended to
help make our communications
activities more effective by
focusing on the right things to
do and by doing them well.

Engage regularly with opinion


formers and government
officials to build relationships,
gain insights, and promote
the Corporations interests.

Crisis management

Community
relations

Workforce
involvement

Focus and create realistic


expectations by consulting
communities in the design
and implementation of
external affairs programs.

Provide opportunities
to create mutual
understanding and respect
through involvement
in the community.

Prepare in advance to
address the needs of the
community and the media
to maintain credibility.

57

Community & social performance


(Left) Exxon Neftegas
Limited (ENL) consulted
with indigenous groups
on Russias Sakhalin Island
to help ensure that operations would not unduly
affect the traditional industries of shing, hunting,
and herding. Every year
since 2004, the company
has coordinated with reindeer herders to allow them
to use an ENL bridge,
sparing them a dangerous
water crossing while maintaining traditional annual
migration routes.
(Right) In Indonesias
Aceh Province, which
is still recovering from
the impact of the 2004
tsunami, ExxonMobil
continues to support the
North Aceh Womens
Council for Family Welfare
in establishing over 100
sustainable community
preschools.

locations over 12-hour periods for one-on-one


drop-in discussions. We assured the community
that the facility will be built and operated to the
highest safety and environmental standards, and
that biodiversity sensitivities are factored into project
planning. For example, work was halted in an area
to permit the archeological excavation of a metalworking site dating back some 1000 years.
Australia: bringing the public into planning. In
Australia, ExxonMobils Altona renery and Yarraville
fuels and lubricants plant are situated in built-up
urban areas, so continuous communication with our
neighbors is essential. Both facilities have Community
Liaison Committees (CLC) that include members
of the public as well as representatives from the
Environmental Protection Authority and local councils.
These CLCs meet on a regular basis to raise concerns
or issues relating to the operation of the facilities, as
well as to discuss opportunities for improvements.
The CLCs are key contributors in the development
of the facilities environment improvement plans,
which include objectives and targets for further
improving environmental performance over the
next three years.
Chad-Cameroon: progress report. The ChadCameroon pipeline project has had a positive socioeconomic impact on the people in those countries:
The project team held 1200 public consultation
sessions in 2005, reaching more than 25,000 people;
More

than 14,000 individual land users in Chad


and Cameroon have been paid more than $15
million in compensation since project inception, in
addition to more than $5 million in supplemental
community compensation programs;

58

Additional contributions to health, education, and


environmental programs have exceeded $8 million
since project activities rst began;
Early construction and project employment goals
were exceeded, providing thousands of jobs for
local citizens;
More than $140 million in wages have been paid
to national employees in Chad and Cameroon.
Wages paid to Chadian and Cameroonian workers
in 2005 exceeded $30 million;
More than 59 percent of Chadians and Cameroonians
employed on the project held supervisory skilled
positions and semi-skilled positions at the end of
2005. Over 84 percent of workers are nationals; and,
Local companies have beneted from the project:
Some $160 million was spent with local suppliers
during 2005 in Chad and Cameroon. Since construction began, over $600 million has been spent with
more than 1000 local Chadian companies.

Project assessment and consultation


Before investing in major projects in new areas,
ExxonMobil prepares comprehensive Social
Impact Assessments (SIAs), which are part of a full
Environmental Impact Assessment. This formal process identies potential risks to the community
as well as local needs and aspirations.
SIAs identify methods for enhancing the benets
that can ow from our operations impacts on a community as well as methods for offsetting potentially
negative impacts. Often, the opportunities we
identify form the basis for a sustainable community
development program that involves joint participa-

tion and planning with the local community and


government. In addition, our purposeful efforts to
identify and enhance opportunities add value to a
projects presence within a community.
Public consultation is a cornerstone of the SIA process. This entails identifying key community stakeholders, setting up forums or meetings, and talking
about projects with impacted communities. Our
intent is to invite the participants to express their
questions and concerns. We take their comments
into consideration and make concerted efforts to
address them, either by incorporating a solution or
mitigation plan, or by providing additional information or clarication.
Data required for an SIA are gathered by social
scientists, who use a number of research methods,
including literature surveys, interviews of those
affected by the project (especially project-area inhabitants), town hall-type meetings, and discussions
with NGOs active in the project area. To help make
our public consultation initiatives as effective as possible, we frequently consult with NGOs concerning
the initiatives planning and organization.
To track accomplishments, many projects dene
specic socioeconomic stewardship parameters.
These may include the number of local, regional or
national workers; the amount of training provided
to workers; damages compensation paid by type
(cash or in-kind); community compensation paid;
and, grievances received and resolved.

Respecting property rights


In addition to engaging with communities to
determine an operations social and environmental
impacts, ExxonMobil upholds property rights in all of
the nations in which we operate. In the rare instances
involving resettlement, we work to resettle and
compensate people fairly and justly.
For example, our Chad-Cameroon Project has an
extensive land rights program for compensation, resettlement, and retraining. The project put into place
an individual compensation program to address direct site-specic impacts on affected households, as
well as supplemental community-compensation programs in both Chad and Cameroon. This program
addresses the more diverse and geographically
dispersed long-term impacts related to construction
activities and the presence of permanent installations such as the pipeline, pump stations, oil wells,
and oil-processing facilities.

Social Impact Assessment (SIA) in action


Esso Highlands Limited, operator of the Papua New Guinea Gas Project,
commissioned an SIA as part of its project planning for a new gas pipeline
and associated developments. The SIA was developed by a multidisciplinary team of social scientists with recognized expertise and prior
eld experience in Papua New Guinea. The ethnographic eld investigations in the Project Impact Area included:
A

total of 1174 household surveys across 82 census areas to obtain quantitative metrics on education, literacy, household standards, income and
expenditure patterns, health, and governance. The survey documented
approximately 11,000 people. The sampling rate was estimated to be 43
percent of households recorded in a previous 2000 census;

Structured

and unstructured interviews with key community groups to


obtain qualitative information about general sociocultural conditions and
issues, as well as signicant cultural heritage sites; and,

Multiple archeological eld surveys to determine the location, extent, and


importance of cultural sites. Field archeologists worked closely with village
liaison ofcers, local representatives, and community members.

Since the projects compensation program began,


more than $15 million in cash and in-kind payments
have been distributed to more than 14,000 individual land users. A supplemental community and
regional compensation program addresses potential
project effects beyond the direct impacts on land
use and crops. A total of 354 communities were
eligible for the program88 in Chad and 266 in
Cameroonreceiving total compensation of more
than $5 million. Following a consultation process,
eligible communities have chosen a variety of microdevelopment projects, including water towers and
wells, schools, granaries, village markets, and community gathering places.

Indigenous communities
Some of the worlds oil and gas reserves overlay territories used and inhabited by indigenous communities. By virtue of their separation from mainstream
society, indigenous communities can be especially
vulnerable to development and change. ExxonMobil
works to help address the special needs of indigenous communities in the areas where we operate.
Company businesses that interact with indigenous
communities have programs and practices in place to
maintain good relationships with the communities.
Cameroon. Through an environmental foundation,
we have continued our Indigenous Peoples Plan in
Cameroon. This program provides improvements in

59

Community & social performance


Canada. Our afliate, Imperial Oil, created the
Imperial Native Network in 1991 with eight founding
members of aboriginal descent. The networks goal
is to increase awareness in the local workforce about
aboriginal people and to create stronger relationships between the Cold Lake operation and the
regions First Nations and Metis communities.

ExxonMobil Venezuela
is helping young people
in 13 rural schools with a
comprehensive program
that starts with facility
repair and the purchase
of desks, textbooks, and
other supplies. Several
teacher training sessions
are then sponsored to improve the schools education program and develop
these schools into models
for other communities.

The network helps the Cold Lake operation to


walk the talkon Imperials aboriginal policy. The
policy sets out the companys beliefs and values on
aboriginal relations, including respect for aboriginal culture, open and honest communication, and
support for the economic and social aspirations of
aboriginal communities.

the lives of the Bakola/Bagyeli people who inhabit


an area near the pipeline. The program provides
both short- and long-term improvements to living
standards, with initiatives including health care,
education, agriculture, and housing.
Venezuela. Through ExxonMobil Venezuelas comprehensive social investment program for our afliate
Operadora Cerro Negro, we have established a long
and fruitful relationship with the community of Mamo,
inhabited by approximately 80 Indian Karia families
in the southeastern Anzotegui state. Through consultations that began in 1999, we started by including
their public school in our School Adoption Program,
and then proceeded to repair, refurbish, and re-equip
it. Since then, we have assisted the Karia with the
schools annual maintenance, and have involved its
teachers in a special training program.
Productive and frequent consultations have continued, and our relationship has strengthened. Two
years ago, we included a more comprehensive community-education program, called Education for Life,
which develops the communitys capability to take
charge of its own destiny by developing skills and
values among teachers, parents, and school children.
In parallel, four years ago we started a pilot program in Mamo, called the Community Integral Farm
Project, to generate a sustainable development plan
based on modern, integral farming technology for
Karia families to secure a regular source of income.
Since then, we have created a second farm in another community. Next year, we will establish a third.
Finally, we have sought to foster awareness of, and
appreciation for, the Karia nation and its way
of life in a 200-page book, Karias Caribs of the
21st Century, which has been donated to libraries
and education centers.

60

Today, the network has 21 ofcial members, who


meet quarterly to look at ways they can support the
company in carrying out its aboriginal policy, including creating opportunities to increase employment
and strengthen relationships with the local aboriginal
population. Two members from the Imperial Native
Network act as liaisons and assist the companys
aboriginal affairs advisor in building long-term relationships in aboriginal communities.
A number of successful initiatives have resulted from
the networks recommendations, ranging from a
native internship program to achievement awards
for local aboriginal students.
The program has not been without challenges.
When the network was formed, staff had low initial
awareness regarding aboriginal issues and limited
knowledge about barriers preventing aboriginal
workers from entering the workforce. In response,
the network spent much time and effort to help
address this issue, working closely with employees, contractors, and management. As awareness
increased, the network began various outreach
activities in the local communities.
A clear business driver also helped overcome difculties. Given that the operation impacts traditional
lands used by the First Nations, it was critical that
Imperial work very closely with aboriginal communities to involve them in the operations. It was also
important to draw qualied workers from these
communities as the company continues to develop,
and to maintain a workforce that reects the diversity of local communities. In addition, the network
helped identify potential opportunities to work with
local aboriginal-owned businesses, and has increased
awareness among aboriginal youth in northeastern
Alberta about job opportunities at the company, as
well as the skills needed to obtain employment.

Capacity building

In Malaysia, ExxonMobil
employees serve as
mentors in the Young
Entrepreneur program,
which gives students,
such as these at the SMK
Convent Bukit Nanas
school in Kuala Lumpur,
access to hands-on
experience with industry
professionals. The program
fosters the development
of tomorrows successful
employees and business
leaders.

Capacity building refers to the promotion of skills,


knowledge, and experience of local citizens outside
the company who can contribute to the independent
economic development of the societies in which we
operate. ExxonMobil believes in strengthening and
assisting economic growth by means of investment,
employment, education, the transfer of knowledge
and skills, the purchase of local goods and services,
and support for the rule of law.
Our success depends on stable operating environments, sound governance systems, trained and
skilled employee pools, and markets for our products. However, lack of access to education, health
care, and economic opportunities can present a barrier to achieving a higher standard of living and quality of life. In the emerging and developing countries
where we operate, ExxonMobil employs a variety of
economic support and incentive programs to reduce
the dependency of governments and communities
on our presence over the medium and long term.
ExxonMobil operations create jobs, strongly support
and promote education and training and, where
possible, use qualied local suppliers of goods and
services. When operating in communities that lack
local capabilities, we work with governments and
communities to develop them.
For contributions and social investments, we work
to ensure that every project we fund has a capacitybuilding element, either human or organizational.
We also work to design projects so that the projects
themselves, or at the very least their benets, will
be sustainable over the long term, with or without
continued funding. In 2005, our worldwide afliates advanced capacity building in many communities, strengthening local and regional business
environments.
Angola. Esso Angola has made a commitment
to jointly nance the creation of the Center for
Enterprise Support to increase the competitiveness
of local Angolan companies in the petroleum services sector. The center will help provide legal and
technical advice to local enterprises and will foster
contacts for Angolan companies with nancial institutions, investors, and technology companies. The
center will also provide private sector development,
job creation, skills, and knowledge transfer to help
build indigenous capacity.
Malaysia. In Malaysia, we have been actively
involved in an after-school program for the past 15
years. The ExxonMobil Young Entrepreneur (EYE)
program aims at educating and inspiring young

people to value free enterprise, business, and


economics. The program provides students with
hands-on experience in running their own companies, guided by ExxonMobil Malaysia employees
who volunteer as advisors. Since its inception, the
program has helped prepare more than 1500 students from about 70 schools for entrepreneurship or
business careers. In 2004 and 2005, two ExxonMobil
Malaysia employees who served as program advisors
were themselves former EYE program students.
Canada. ExxonMobil Canada awarded the Nova
Scotia Community College a $1.4 million contract
to develop a platform operations training program.
Under the contract, the college will provide training
for about 50 ExxonMobil Canada employees, who
will be working both onshore and offshore on a new
compression platform as part of the Sable project.
Instruction will feature the use of several advanced
computer programs, including software that simulates a virtual compression deck. A platform process
simulator will enable both participants and students
interested in the oil and gas industry to practice
system operations.
Sakhalin, Russia. Our technical training programs
for suppliers and contractors continued to reach
more Sakhalin residents in 2005. Working with the
U.S. Agency for International Development (USAID),
we helped welders improve their skills through
certied classes, and granted micronance loans
to encourage development of small- and mediumsized businesses, improving the oil services sector on
Sakhalin. ENL, along with its partners in the Sakhalin1 Consortium, contributed another $200,000 to the
loan fund of small- and medium-sized businesses in
North Sakhalin in 2005, and a second ofce for the

61

Community & social performance


Security and respect for human rights can and
should be compatible; and,

Micronance activities
are one of the many
ways ExxonMobil fosters
education and increased
opportunities for women
in Nigeria as part of
the companys community investment initiative.
These Ibeno women
are members of the
Upenekang Nka Uforo
Iban Cooperative Society
and manage a cold room
and sh kiln.

Human

rights violations are not acceptable and


should be condemned.

Promoting respect for human rights begins with


striving to do no harm and to do positive good in the
communities we affect. The following rules of conduct
help us to achieve these two overarching objectives:
Do no harm.
with all applicable laws and with
ExxonMobils Standards of Business Conduct;
Comply

Proceed only with the free, prior, and informed


consultation of the impacted communities;
Provide

fair compensation for property rights


and customary rights;

program was opened in Okha. Ofcials from USAID


and ENL met with contractors at Sakhalin-1 project
sites this year to start bringing together local entrepreneurs, business opportunities, and nancing for
the benet of all.
Since 2002, ENL has recruited 110 operations
technicians and engineers for its production facilities
located either on Sakhalin Island or the DeKastri
terminal on the Russian Federation mainland.
Each new employee completes a ve-year training
program in preparation for a future role in operations.

Human rights
ExxonMobils Standards of Business Conduct
provide a worldwide framework for responsible
operations. It is consistent with the spirit and intent
of the United Nations Universal Declaration of
Human Rights as it applies to private companies,
and with the Fundamental Principles and Rights at
Work of the 1998 International Labor Organization
Declaration. These policies support our commitment
to human rights and include freedom of association,
elimination of forced or compulsory labor, abolition
of child labor, and equal employment opportunity.
While recognizing that host governments have the
responsibility for maintaining law and order, security,
and respect for human rights, we believe:
We

have an important role to play in promoting


respect for human rights;

Our

business presence can and should have a


positive inuence on the treatment of people in
the communities in which we operate;

62

Enforce policies prohibiting bribery and


corruption; and,
Implement

the Voluntary Principles on Security


and Human Rights.
Do positive good.
local job and business opportunities;

Provide
Help

build the local capacity of communities


and institutions; and,

Support

the Extractive Industries Transparency


Initiative (EITI).

Security and human rights. ExxonMobil has continued its role as an active participant in the dialogue
on the Voluntary Principles on Security and Human
Rights. In 2005, we rolled out a detailed guidance
for implementing the principles, the ExxonMobil
Framework on Security and Human Rights, in seven
countries: Angola, Cameroon, Chad, Equatorial
Guinea, Indonesia, Nigeria, and Venezuela.
Areas for improvement of security practices were
identied in each country, and included communicating expectations to various levels of government, reporting security incidents, vetting private
security providers, and requiring training for private
security personnel.
Rollout to the remainder of ExxonMobil-operated
facilities will be conducted throughout 2006. The
Framework will be integrated into OIMS, which
details the expectations to be met in the design,
construction, and operation of our facilities. Regular
assessment of compliance ensures that these expectations are met.

In Indonesia, the Aceh region where ExxonMobils


afliate operates the Arun eld and facilities, is
currently experiencing a peace movement and a cessation of the civil conict that has challenged this region for 29 years. The August 15, 2005, peace agreement between the government of Indonesia and the
separatist rebels of the Free Aceh Movement called
for complete demobilization and disarmament of
the rebel forces and withdrawal of all elements of
nonlocal military and nonlocal police forces. The
key provisions of the peace agreement have been
implemented on schedule and in accordance with
the stated guidelines, improving the prospects for
an enduring settlement.

Political involvement and contributions


ExxonMobil considers registering and voting,
contributing nancially to the party or candidate of
ones choice, keeping informed on political matters,
serving in civic bodies, and campaigning and ofceholding at local, state, and national levels to be
important rights and responsibilities of the citizens
of a democracy.
ExxonMobil policy states that directors, ofcers,
and employees engaging in political activities are
expected to do so as private citizens and not as
company representatives. Personal, lawful political
contributions and decisions not to make contributions do not inuence compensation, job security
or opportunities for advancement.
Where permitted by applicable laws in the United
States and Canada, and as authorized by the Board
of Directors, ExxonMobil makes political contributions to candidate committees and political parties,
associations, and other political organizations. These
contributions are reported to governing agencies
where required by law.
In the United States, political party organizations
and candidates rely on nancial contributions from
individuals, interest groups, companies, unions, and
national political party committees. Numerous federal and state laws regulate nancial contributions
to candidates. ExxonMobil does not contribute to
candidates for federal ofce, whether those candidates are running for president or Congress.

business presence, and where applicable laws allow.


In 2005, Exxon Mobil Corporation contributed a total
of $209,250 to legislative and gubernatorial candidates and caucuses in 15 states.
Canada is the only country outside the United States
where an ExxonMobil afliate makes political contributions. Within certain prescribed limits, political
contributions by corporations are legal in Canada.
Imperial Oil Limited, a majority-owned Canadian
afliate of Exxon Mobil Corporation, follows strict
guidelines when making political contributions.
These contributions are to registered political parties, and all contributions are within the legal limits.
In Canada, all contributions are published by the
Chief Electoral Ofcer. For more information visit
elections.ca.
Like many U.S. companies, ExxonMobil has a
Political Action Committee, or PAC. PACs are authorized by U.S. federal and state law, which permit
corporations to solicit funds from employees and
shareholders for the purpose of providing nancial
support to political candidates. PACs are not corporate accounts, but are separate, segregated funds
containing only contributions made by individual
participants. PACs must le periodic reports with
the Federal Election Commission to show how they
received and used their funds. These reports can
be viewed online at fec.gov.
The ExxonMobil PAC restricts solicitation for voluntary contributions to eligible executive-retirees and
senior-level managers and professionals. Decisions
on whether or not to contribute are left to the discretion of those individuals and are strictly condential.
Contributions go directly to an outside vendor who
collects and manages the funds available to the
ExxonMobil PAC. Neither the names of contributors
nor the amounts of any contributions are released
to ExxonMobil management.

The Corporation posts its contributions to political


organizations at the national and state level on its
Web site, exxonmobil.com/politicalcontributions.

Designations of PAC funds are made to candidates


who favor the strengthening of the free enterprise
system and hold views consistent with the best interests of Exxon Mobil Corporation. In 2005, the rst
half of the 2005 2006 election cycle, ExxonMobil
PAC recorded receipts of $374,150 from individual
participants, and disbursed a total of $281,900,
mostly to federal candidates. ExxonMobil PAC was
ranked number 307 out of nearly 3000 PACs in total
disbursements for the rst half of the election cycle.

In the United States, 28 states allow corporations to


make political contributions from corporate funds.
ExxonMobil makes contributions to state-level
candidates in states where we have a major

The political contributions of ExxonMobil and


Imperial Oil, as well as the contributions of the
ExxonMobil PAC, are reviewed with the Board of
Directors of the Corporation on an annual basis.

ExxonMobil,
perhaps surprisingly
given its late entry
into the (Voluntary
Principles) process
in 2002, has nonetheless made
substantial progress
over the last three
years in designing a
global implementation process now
being tested in
seven target countries. It has taken
a characteristically
centralized approach
focused on framing
specic management
expectations and
measurements,
and then adapting
them to address
country-specic
operating issues
and challenges.
Bennett Freeman
Former U.S. Deputy
Assistant Secretary of
State for Democracy,
Human Rights and
Labor; and Advisor to
Amnesty International

63

Community & social performance


In Angola, malaria
kills more people
than any other
disease. Young
children are especially vulnerable.
Both through its own
highly regarded
programs and, most
recently, in partnership with USAID
and UNICEF under
President George
W. Bushs malaria
initiative, ExxonMobil
has long been an
important player
in working with the
Angolan Ministry
of Health to reduce
the risk children and
pregnant women
have of contracting
the disease. We are
proud to have
ExxonMobil as our
partner and were
condent that
together we can
make a big difference
in helping Angolans
lead better lives.
Kent Hill
Head of USAIDs Global
Bureau for Health, and
the Acting Coordinator
for the Presidents
Malaria Initiative

ExxonMobil 2005 contributions


by focus area

Employee giving campaigns


$6 million
Public policy research
$7 million
Pre-college
education
$12 million
Higher
education
$31 million
Health
$15 million

ExxonMobil 2005 contributions


by geographic area

Arts &
culture
$5 million

Africa
$18 million

Civic &
community
$52 million

United States
$81 million

Canada
$6 million
Latin America
$3 million
Europe
$4 million

Environment
$5 million

Worldwide total: $133 million

Political lobbying and advocacy. ExxonMobil


like many corporations, trade associations, labor
unions, and special interest groupsevaluates and
tracks proposed legislation so that we may effectively explain or advocate the companys position
when necessary. In doing so, ExxonMobil engages
with governments around the world. Such lobbying is highly regulated in the United States, and is
subject to public disclosure. ExxonMobil complies
fully with these regulations. All lobbying in the U.S.
is reported in aggregate in a semi-annual lobbying
report to the U.S. Congress. ExxonMobil rigorously
applies section 162(e) of the Internal Revenue Code.
In preparing this report, ExxonMobil includes in
such reporting the salary and benet costs for U.S.
state and federal lobbying staff as well as overhead
costs such as building rental and utilities. Also
included are payments dened by the government
as nondeductible, contributions, memberships and
business support, professional dues, travel and
related expenses, and state political contributions,
as well as administration fees of the ExxonMobil
Political Action Committee and the ExxonMobil
Citizen Action Team.
A complete list of issues lobbied by ExxonMobil
in the United States in 2005 can be found in our
semi-annual lobbying reports to Congress, which
are a public record and can be accessed online at
sopr.senate.gov.
In 2005, in the United States, ExxonMobil incurred
lobbying expenses totaling $7.1 million under the IRS
Code 162(e) reporting denition. Rankings for the
full year are not yet available; however, ExxonMobil
ranked 32nd at mid-year among a ranking of more
than 3000 rms with registered lobbyists.

64

Asia Pacific
$13 million

Russia /Caspian
$ 6 million

Middle East
$2 million

Worldwide total: $133 million

ExxonMobil engages in public policy discussions


with lawmakers and other policymakers regarding
science, cost-benet analysis, and policy options
on a range of issues affecting our business. For our
position on a broad range of policy issues, go to
our Web site, exxonmobil.com.

Social investment and initiatives


ExxonMobil contributes to developing countries in
many ways. We create jobs and pay wages, transfer
technology, and pay taxes that governments can use
to build schools, roads, and hospitals. Additionally,
ExxonMobil has made a long tradition of direct
philanthropy in making a positive contribution to the
communities and economies in which we operate.
In the United States, the key area of community
investment continues to be the support of education
at both the K through 12 and higher education areas.
ExxonMobil has made a priority to support the teaching and learning of science, technology, engineering, and mathematics (STEM). In 2005, ExxonMobil
partnered with golf professional Phil Mickelson to
communicate the need for young people to study
math and science. Last year, the partnership held
the rst Mickelson ExxonMobil Teachers Academy,
providing 200 elementary teachers with math and
science professional development training.
The Corporation also supports organizations in the
United States that have programs to improve career
opportunities for women and under-represented
groups, with specic focus on the STEM areas.
With support from ExxonMobil, the Society of
Women Engineers provides encouragement and

grants throughout the United States for engineering outreach programs targeted at middle-school
girls. ExxonMobil Foundation continues as the
largest contributor to the National Action Council
for Minorities in Engineering, an organization that
provides scholarships to minority engineering
students. ExxonMobil Foundation also continues the
largest cash-matching gift program in the nation, by
matching employee and retiree gifts to universities
on a 3-to-1 basis.
ExxonMobil Foundation consistently targets its
corporate-funded philanthropy at known barriers to
development in countries in which we operate. We
believe that by focusing on particular issues, we have
the ability to make a discernable difference on both
a local and global scale.
Community investment initiatives, namely the established Africa Health Initiative and the newly launched
Educating Women and Girls Initiative, have been a
focus of ExxonMobils global giving in 2005. These
philanthropic efforts are directed toward developing countries where ExxonMobil has signicant
business operations. While the world is becoming
increasingly energy-dependent on these countries,
many have not yet enjoyed commensurate improvements in health and education, life expectancy, infant
mortality, and living standards.
Africa Health Initiative. As a major investor in
Africa, ExxonMobil is keenly aware of the health and
economic impacts of malaria on our workforce, their
families, and the communities where we operate.
The disease is a leading cause of Africas under-5
mortality and constitutes 10 percent of the continents overall disease burden. While there are proven
and effective interventions in the ght against the
disease, every year at least 300 million acute cases
of malaria occur globally, resulting in more than a
million deaths. Nine of 10 deaths from malaria occur
in sub-Saharan Africa, mostly among young children
and pregnant women.
In Abuja, Nigeria, in April 2000, 44 African heads of
state and governments signed the Abuja Declaration
to Roll Back Malaria in Africa. Signatories committed themselves to an intensive effort to halve the
African mortality rate due to malaria by 2010.
Over the past ve years, ExxonMobil has been working with a growing number of partners to advance
the objectives and strategies of the global initiative to Roll Back Malaria. Through its Africa Health
Initiative, ExxonMobil has awarded grants totaling
more than $20 million, $10 million in 2005 alone, to

Discount voucher model


Mobil Marts

Local NetMark
Office

Subsidize vouchers

Ministry of Health/
Antenatal Clinics

Generate demand

Redeem vouchers

Train health workers

Support local

Promote ITNs to

distributors

for insecticide-treated
bed nets (ITNs)

Reimburse distributors

Provide educational

Distribute discount

for vouchers with proof


of purchase

materials

Sell unsubsidized

women

vouchers to pregnant
women

retail ITNs

Help Us Help: using service stations to


help prevent malaria
The ExxonMobil Africa Fuels Marketing Group has teamed up with the
Academy for Education Developments USAID-funded NetMark project
to develop a new Help Us Help campaign in Nigeria, involving the
companys retail service station network. Help Us Help reinforces the basic
message of NetMarks behavioral-change marketing by teaching preventive action against malaria. The campaign capitalizes on the ExxonMobil
network of Mobil-branded retail outlets as a way of reaching beneciaries,
and uses a variety of materials to transmit the NetMark message.
Another component of the campaign involves coupons for the purchase
of bed nets, which are distributed to pregnant women through prenatal
clinics. Recipients can redeem their coupons at nearby Mobil retail outlets
for a reliable supply of nets and educational materials on how to use
them. In addition, a portion of gasoline sales is donated to provide free
bed nets for local orphanages.

support international and local health organizations


and programs in the ght against malaria and related public health priorities. Grants include support
for programs that build health care capacity at the
community level, promote research and development of new drugs and vaccines, and advocate for
awareness and support from the international to the
community level.
Through such programs, the Africa Health Initiative
supported the distribution and social marketing of
long-lasting insecticide-treated bed nets, education
for health care personnel, drug/vaccine research
and development, and community advocacy
and education.

65

Community & social performance


support for education, the ExxonMobil Foundation
has awarded grants for women and girls in the developing world, investing more than $3 million in 2005.

In October 2005,
ExxonMobil hosted 25
women community leaders
from 18 developing
countries in Washington,
D.C., to attend the Global
Women in Management
Course, a one-month
management training
and capacity-building
course run by the Centre
for Development and
Population Activities
(CEDPA).

As a multinational
company operating
in North Aceh,
ExxonMobil took
care of its neighbors
impacted by the
tsunami. Paktas partnership with ExxonMobil in communitybased programs
aims to recapture
and rehabilitate the
communitys economic conditions
after the tsunami
disaster. The programs focus on
advanced shery
programs managed
in an environmentally
safe and sustainable manner.
Imam Mulyadi
Executive Director,
Pakta Foundation

Improvements in education and increased opportunities for women and girls serve as a foundation
for societal progress, development, and economic
growth. By funding such programs, we believe we
have targeted the most powerful development tool
of all. Research consistently shows that educating
women and girls yields a higher rate of return than
any other community investment available in the
developing world.

In 2005, the Africa Health Initiative awarded 33


grants totaling $10 million to 23 organizations. The
grant portfolio included support for programs and
projects in 10 African countries as well as additional
research and advocacy initiatives based in the
United States and Europe.
Examples of grants awarded as part of the 2005
Africa Health Initiative include:
The United Nations Foundation and the American
Red Cross to provide insecticide-treated bed nets
for distribution to children and pregnant women as
part of vaccination campaigns in Angola, Nigeria,
and Malawi;
The

Academic Alliance to expand its curriculum


at the Infectious Diseases Institute at Makerere
University in Uganda to include a malaria training
program for African doctors;
The Health Store Foundation to incorporate new
malaria treatment protocols as part of a microfranchising program in Kenya;
USAID

Angola to support implementation of the


Presidents Malaria Initiative;

AED/NetMark

to expand the Help Us Help bed


net voucher program in Nigeria;

JHPIEGO to conduct a ve-country assessment

of programs for malaria prevention during


pregnancy; and,
UNICEF to support a community-based malaria
program targeting 37 Angolan municipalities.

Educating women and girls. ExxonMobils new


community investment program, the Educating
Women and Girls Initiative, was launched in July
2005. As an extension of ExxonMobils long-standing

66

Educated women are healthier and less likely to die


in childbirth than women with little or no schooling.
The children of educated mothers are more likely to
survive, go to school, and enjoy better health due to
better nutrition and immunization rates. Educating
women and girls has also been shown to help lower
infant and child mortality rates, prevent diseases associated with poor sanitation, and retard the spread
of HIV/AIDS.
ExxonMobil believes this initiative will support the
achievement of international development goals and
have a profound and lasting impact on individuals,
their families, and the communities where we operate. In 2005, major projects were funded in Qatar,
Kazakhstan, Indonesia, Colombia, Angola, Chad,
Equatorial Guinea, and Nigeria. Projects include
helping girls stay in school, improving school safety,
teacher education and training, school rehabilitation,
professional and vocational education, adult literacy
training, water and sanitation projects, entrepreneurial and small business training, skills training as part
of a micro-enterprise scheme, community leadership
management, and leadership training.
Our project in Astana, Kazakhstan, involved working with USAID and the Kazakhstan Loan Fund to
establish an Enterprise Development Center. The
center, in cooperation with a micro-nance organization, is providing prospective entrepreneurs
with strategic counseling services and training in
the areas of nancial management, marketing, and
human resources management. The center also
provides micro-loans to women-owned small- and
medium-sized businesses. As of year-end 2005, the
Astana branch of the Kazakhstan Loan Fund had 450
active clients, 87 percent of whom are women, with
636 loans issued and very low delinquency rates.
The Business Consulting Portfolio included 19 smalland medium-sized business enterprises. The center
has conducted 59 workshops for 933 individuals on
issues such as nancial reporting analysis, business
planning, and taxes and laws.

I really believe that we all can change the world


by giving every person the same rights, opportunities, and chances, and ExxonMobil Foundation and
CEDPA are doing this by empowering women to give
them the chance that in many cases has been taken
away. During the past few weeks of the Women in
Management course, Ive had the honor to meet a
group of 25 amazing women who are working very
hard to create equality by helping the women and
children of our world, said Giannina Gell, executive
director of Operation Smile, Honduras.
More information on community investment initiatives can be found on our Web site, exxonmobil.
com/community.
Disaster relief. Indian Ocean tsunami: Following the
devastating tsunami that struck several Indian Ocean
nations on December 26, 2004, ExxonMobil, its
employees, retirees, surviving spouses, dealers, and
distributors around the world combined to give more
than $11 million for tsunami relief and reconstruction.
In Malaysia, Thailand, and India, ExxonMobil afliates
supplied diesel for relief vehicles and LPG cylinders
for cooking, while supporting the reconstruction of
school buildings and health stations. Employees
contributed food, clothing, and medical supplies,
and provided multilingual medical assistance.
As reconstruction in Indonesias hard-hit Aceh
province continues, ExxonMobil is supporting
projects including school and health clinic reconstruction, micro-enterprise, university scholarships,
and shing industry redevelopment. ExxonMobils
objective is to support projects that will have a
direct and lasting benet for the people of Aceh
and other impacted communities.
U.S. Gulf Coast hurricanes: In response to the
devastation caused by Hurricanes Katrina and Rita
in September 2005, ExxonMobil pledged more than
$12 million in direct support and matching gifts to
relief and recovery efforts. This included donations
to the American Red Cross Disaster Relief Fund
and to national and local organizations working in
communities that opened their arms to assist in relief
efforts and provide food, shelter, and assistance to
those displaced by the disasters. The Corporation
also provided in-kind donations of fuel and lubricants, totaling almost $1 million, to rst responders
providing hurricane recovery efforts.
In addition, hundreds of ExxonMobil employees
and retirees volunteered in their communities to
assist those impacted by Hurricanes Katrina and
Rita. For both the Indian Ocean tsunami and the

Gulf Coast hurricanes, ExxonMobil Foundation


matched employee contributions in addition to
making corporate donations to relief efforts.

Worldwide community contributions


During 2005, ExxonMobil afliates and ExxonMobil
Foundation combined to provide $133 million in
charitable contributions and community investment
worldwide. (ExxonMobil Foundation is the main
philanthropic arm of the Corporation in the United
States, and funds the Africa Health Initiative and the
Educating Women and Girls Initiative.)
The 2005 worldwide cumulative gure includes funds
invested in social projects through various joint venture arrangements, production sharing agreements,
projects operated by others, and contractual social
bonus arrangements.
ExxonMobil believes that well-designed contributions programs further the success of the Corporation
by raising the standard of living and the stability of
the communities in which we live and do business.
Recipient organizations may include registered
charities, nongovernmental organizations, and
nonprot educational, health-related, and cultural
organizations. The ExxonMobil and ExxonMobil
Foundation contributions programs and budgets
are not permitted to be used to promote product
sales or brand recognition.

Employee volunteerism
Our employees live in, work in, and are a part of
hundreds of communities around the world. As such,
their assessment of community needs is particularly
valuable, and we encourage their active involvement
in local volunteer activities.
In 2005, more than 12,000 ExxonMobil employees, retirees, and their families donated 826,000
volunteer hours to approximately 5800 charitable
organizations in 22 countries. In recognition of these
efforts, Exxon Mobil Corporation and its afliates
donated $9 million to the charitable organizations
where they volunteered. Of the total volunteers,
3500 participants donated more than 186,000 hours
to almost 1000 organizations in countries outside
the United States.

Community &
social priority
areas for

2006
Continue expansion
of the Educating
Women and Girls
Initiative and investigate opportunities in
additional countries.
Repeat the successful
CEDPA Global
Women in Managementcourse and run
a new course taught
in Spanish.
Establish an Africa
Health Initiative network of on-the-ground
ExxonMobil practitioners to share malaria
best-practices from
around Africa.
Actively support the
reconstruction activities initiated after the
Indian Ocean tsunami
and the U.S. Gulf
Coast hurricanes.
Rollout the Framework
on Security and Human
Rights to the remainder
of ExxonMobil operated afliates throughout 2006.

ExxonMobil employees and retirees also donated


$35 million of their own money to charity and relief
organizations through company-sponsored programs in 2005. When combined with corporate
donations, ExxonMobil, together with its employees
and retirees, contributed $168 million to community
investments worldwide.

67

Index
For your use in reading this report, this index refers to the way in which our reporting guidelines, the American Petroleum Institute/
International Petroleum Industry Environmental Conservation Association (API/IPIECA) sustainability reporting indicators (2005),
correspond to Global Reporting Initiative (GRI) indicators (2002). Further reference to GRI can be found on page 55.

API/IPIECA
Overview, prole, and vision
Letter from the CEO
Organizational prole
Report scope and prole
Structure and governance
Engagement
Economic
Governments
Shareholders
Transparency of payments
Customers
Suppliers
Employees
Providers of capital
Management systems
Policies and management systems
Environmental
Emissions
Energy use /efciency
Freshwater use
Biodiversity
Wastes
Spills, discharges
Workplace
Health and safety
Health and safety performance
Employee participation
Workforce health
Product stewardship
Security
Employees
Nondiscrimination
Labor practices
Training and development
Diversity and opportunity
Anti-bribery and anti-corruption policy
Community & social
Capacity building
Community engagement
Land use, resettlement
Human rights and public policy
Human rights policy
Political involvement
Indigenous communities
Social investments

68

ECO-1
ECO-2
ECO-A1

GRI

Where Reported

1.2
2.1 2.7
1.1, 2.10 2.12
3.1 3.4, 3.7 3.8
2.9, 3.93.12

2 3
45
6 7
1215
89, 15

EC8, 9, 10

ECO-3
ECO-A2
ECO-A3

EC1
EC3
EC5
EC6

12
14 15
1516
16
17
12
16

ENV-6, H&S-1

3.16 3.20

1819

ENV-3, 4, A6
ENV-5
ENV-A7
ENV-A9
ENV-A3, A5
ENV-1, 2

EN8, EN9
EN3, EN4
EN5
EN6, 7
EN31
EN13

24 30
24 26
30 31
34 35
33 34
31 32

H&S-4
H&S-2
H&S-3
H&S-5
SOC-9

LA5, 7
LA6

44 47
45 46
47 49
48 50
47

SOC-4
SOC-7
SOC-5
SOC-A3, 4
SOC-2

HR4
HR5
LA9, 17
LA10
SO2

50 51
50 51
51 54
53 54
54 55

SOC-A5
SOC-8
SOC-A7

SO1
SO1
SO1

61 62
56 59
59

SOC-1
SOC-3, A1
SOC-A6
SOC-A4

HR1, 6 ,7, 11
SO3, 5
SO1
EC10, SO1

62 63
63 64
59 60
64 67

PR2

Assurance statement
Scope of the assurance. Lloyds Register Quality Assurance,
Inc. (LRQA) was commissioned by Exxon Mobil Corporation
to review the reporting processes used in the creation of the
ExxonMobil 2005 Corporate Citizenship Report. The objectives of the review were to validate the integrity of the reporting processes and to evaluate consistency with the following
industry guidelines:
IPIECA/API, Oil and Gas Industry Guidance on Voluntary
Sustainability Reporting (April 2005); and,

API, Compendium of Greenhouse Gas Emission Estimation


Methodologies for the Oil and Gas Industry (February 2004).

The scope of the assurance was limited to processes for the


reporting of safety, health, and environmental core IPIECA
performance indicators. Verication of data accuracy was not
included in the review scope. ExxonMobil fully acknowledges
its sole responsibility for the accuracy of all information contained within the report.
Approach. The assurance was based on interviews with
key personnel to identify the processes in place to fulll the
IPIECA core indicators followed by reviews of the processes
for collecting, compiling, and reporting these indicators at
the corporate, functional business, and operating unit levels.
These reviews comprised:
A review of the reported information to conrm the inclusion of all core environmental and health & safety performance indicators referenced in the IPIECA/API Guidance;

A review of the documented reporting requirements


against the applicable industry guidelines to assure consistency of scope, denition, and reporting for each of the
relevant indicators;
A review of the reporting processes at Headquarters
and each of the functional business levels to evaluate
the processes used to assure completeness, consistency,
and accuracy of metrics reporting across ExxonMobils
global operations;

A review of the data reporting processes at a Downstream


and Chemical business operating site to assess local understanding and implementation of reporting requirements; and,

A review of the processes used to aggregate the information at the corporate level for inclusion in the nal report.

Conclusions and ndings. Based on the scope of the assurance and the information presented for review, objective
evidence was available to support the following conclusions:
ExxonMobil has processes in place that ensure sites
that contribute to safety, health, and environmental
metrics understand corporate reporting obligations and
are included in corporate SH&E reporting;

The methods used for calculating each metric are clearly


dened and communicated;

Data collection begins at the operating site level and


is ultimately collated and combined into Corporationwide metrics;

Processes are in place to ensure that the quantitative


indicators are checked for completeness, consistency,
and accuracy;

Responsibility for annually reviewing and updating reporting guidelines is clear and improvement in methodology
is regularly undertaken;

Guidelines for GHG reporting are consistent with and


specically refer to the API Compendium for GHG Emissions
Methodologies for the Oil and Gas Industry; and,
LRQA believes the ExxonMobil reporting system is effective
in delivering safety, health, and environmental indicators
that are useful for assessing corporate performance and for
reporting information consistent with IPIECA/API Guidelines.

Thomas F. Sliva
On behalf of Lloyds Register Quality Assurance, Inc.

Lloyds Register, its afliates


and subsidiaries and their
respective ofcers, employees
or agents are, individually and
collectively, referred to in this
clause as the LR Group. The
LR Group assumes no responsibility and shall not be liable
to any person for any loss,
damage or expense caused
by reliance on the information
or advice in this document or
however provided, unless that
person has signed a contract
with the relevant LR Group
entity for the provision of this
information or advice, and in
that case, any responsibility
or liability is exclusively on the
terms and conditions set out in
that contract.

5959 Las Colinas Blvd.


Irving, Texas 75039-2298
exxonmobil.com
Contact: Elizabeth Beauvais
elizabeth.beauvais @ exxonmobil.com

Printed entirely on 100% recycled paper.


SP-117

Вам также может понравиться