Nexen Acquires Interest in Campos Basin

Nexen Inc. has acquired a 20% interest in a 2,060 square kilometer exploration license in the Campos Basin, approximately 100 kilometers offshore Brazil, by way of a farm-in arrangement. Nexen's partners in Block BC-20 include ChevronTexaco with a 30% interest and Petrobras, the operator, with a 50% interest. The terms of the arrangement are subject to approval by the ANP (AgĂȘncia Nacional de Petroleo), Brazil's National Petroleum Agency.

Block BC-20 offers several 3-D seismically defined exploration prospects on trend with recent discoveries on adjacent blocks. The first well in a two-well drilling program planned for this year will spud in the third quarter. This well will test a structure located in about 1,700 meters of water.

Nexen's strategy in Latin America is to target material, moderate risk plays in proven oil prone basins where we have multiple opportunities to follow-up on discoveries. Attractive fiscal terms, regular bid rounds and a large inventory of industry farm-in opportunities ensure access to the resource. In capturing this opportunity, we are taking advantage of our deepwater experience gained in the Gulf of Mexico and offshore Nigeria, as well as our comprehensive understanding of the political and economic climate gained through involvement in Brazil's chemical industry since 1999.

"This opportunity advances our Latin American growth strategy and builds on our strong relationships with two experienced deep-water players, ChevronTexaco and Petrobras," said Charlie Fischer, Nexen's President and CEO. "These relationships have already resulted in significant discoveries at Ukot and Usan on Block OPL 222 offshore Nigeria with ChevronTexaco, and the discovery and development of the Guando field in Colombia with Petrobras."