Henry Hubble - VP of IR & Secretary

Doug Terreson - Morgan Stanley Doug Leggate - Citigroup Arjun Murti - Goldman Sachs Nicki Decker - Bear Stearns Paul Cheng - Lehman Brothers Dan Barcelo - Banc of America Paul Sankey - Deutsche Bank Mark Gilman - The Benchmark Company Mark Flannery - Credit Suisse Oxy Oswald Clint - Sanford Bernstein John Herrlin - Merrill Lynch

Good day and welcome to this Exxon Mobil Corporation fourth quarter 2006 earnings conference call. Today's call is being recorded. At this time, for opening remarks, I would like to turn the call over to the Vice President of Investor Relations and Secretary, Mr. Henry Hubble. Please go ahead, sir.

Thank you. Good morning and welcome to Exxon Mobil's teleconference and webcast on our fourth quarter and full-year 2006 financial and operating results. As you are aware from this morning's press release, we had another strong quarter as our longstanding commitments to the integrity of our operations, disciplined investment and our integrated business model continued to deliver superior results. At this time, I would like to draw your attention to our cautionary statement. Please note that estimates, plans and projections are forward-looking statements. Actual results, including resource recoveries, volume growth and project plans and outcomes could differ materially due to factors I'll discuss and factors noted in our SEC filings. Please see "Factors Affecting Future Results" in the Form 8-K we furnished this morning which are available through the investor information section of our website. Please also see the frequently used terms, the supplement to this morning's 8-K and the 2005 financial and operating review on our website. This material defines certain financial and operating terms I will use today, shows Exxon Mobil's net interest in specific projects and includes information required by SEC Regulation G. Now I'm pleased to turn your attention to the specific results. Exxon Mobil's fourth quarter net income was $10.3 billion, or $1.76 per share. These results included a $410 million one-time gain from the recognition of tax benefits related to historical investments in non-US assets. Excluding this gain, normalized earnings were $9.8 billion or $1.69 per share. This represents a decrease of $480 million versus last year's record fourth quarter. While absolute earnings were lower, normalized earnings per share were up from last year, due to the reduction in shares outstanding associated with our share purchase program. For the full year 2006, net income of $39.5 billion was a record, and increased $3.4 billion from 2005. Normalized earnings were also a record at $39.1 billion, up $5.2 billion from 2005. Before I discuss the specific business results, I would like to share some of the milestones achieved since the last earnings call. In the upstream, production commenced from the Dalia field in Angola Block 17, located in water depths of over 1,200 meters, 135 kilometers offshore. Dalia is estimated to contain close to 1 billion barrels of recoverable reserves and is expected to reach peak production of about 225,000 barrels of oil per day during the first quarter of this year. Also starting up in the fourth quarter was the Fram East field in the Troll area of the Norwegian North Sea. We anticipate the recovery of approximately 60 million barrels of oil and 70 billion cubic feet of natural gas from the field. Fram East is expected to reach peak production of about 45,000 barrels of oil per day and 45 million cubic feet of natural gas per day in 2008. Another milestone during the quarter was the early processing of LNG at RasGas Train 5 in Qatar. Start-up of the liquefaction train was only 29 months after contract award, a significant achievement for such a large facility and testament to the success of our design one, build many approach and outstanding project execution of the Qatar Petroleum and Exxon Mobil joint venture. Offshore facilities that will supply the natural gas to the train on a long-term basis should be complete by the end of the first quarter. RasGas Train 5 is designed to produce 4.7 million tons per year of LNG for anticipated delivery to market in Asia and Europe. Also in the quarter, we continued to ramp up crude oil production at our Sakhalin 1development in Russia producing over 200,000 barrels a day at year end. Production is expected to reach 250,000 barrels per day by the end of the first quarter. Exxon Mobil also expanded its exploration opportunities during the quarter with new agreements for exploration in the deepwater [Sanakin] Basin southwest of the Philippine Islands. In the downstream, the British Safety Council awarded the prestigious 2006 Sword of Honor to our US and UK-based marine transportation affiliates. The award was recognition of our commitment to workplace safety and health, high operating standards and disciplined management systems. As a multi-year recipient of this award, we continue to emphasize consistent and disciplined safety, health and environmental management in all aspects of our operations. In our lubes business, we announced that Exxon Mobil will become the title sponsor for the Porsche One Mobil 1 Super Cup, further progressing 10 years of close commercial and technical global collaboration with Porsche. Porsche exclusively recommends Mobil 1 and every new Porsche engine leaves the assembly line filled with Mobil 1 oil. During the quarter, our refining and supply business continued to grow profitability through crude diversification, running 41 crudes new to individual refineries, 16 of which were new to Exxon Mobil. In December, we completed a de-bottleneck of our Antwerp, Belgium refinery. This project increased distillation and conversion capacity at a fraction of grassroots costs and enhanced our ability to process advantage crudes. Our worldwide refinery capacity growth rate is equivalent to building a new refinery every three years but at significantly lower cost than new built. Turning to the chemicals business. During the quarter, we announced the progression of a feasibility study with the Saudi Basic Industries Corporation, to expand the [Yenta] and [Kemya] petrochemical joint ventures in Saudi Arabia. The project will include expansion of capacity for carbon black, butyl rubber and thermolplastic specialty polymers for international and emerging local markets. Start-up is anticipated in the 2011 through 2012 timeframe. In November, we announced an expansion of halobutyl rubber capacity at our Baytown, Texas plant that will increase production by 60%. This expansion, part of the Company's commitment to meet the strong global halobutyl rubber demand growth, follows an expansion that quadrupled capacity at Baytown in 2002. Targeted for completion during the second quarter of 2008, this project builds on Exxon Mobil's 70 years of experience in butyl rubber research and development, services and customer application. Turning now to the business results. Upstream earnings in the fourth quarter were $6.2 billion, down $820 million from 2005, which was our highest fourth quarter on record. Lower natural gas realizations reduced gas volumes and net other items were the primary drivers for the earnings change, partly offset by improved crude realizations. We continued to capture the benefit of strong industry conditions with upstream after-tax unit earnings of $15.99 per barrel for the quarter. Oil-equivalent volumes declined slightly versus the same quarter last year, driven by lower gas demand in Europe. Excluding entitlement effects and divestments, oil-equivalent volumes were up 2%. Liquids production increased about 50,000 barrels per day or 2% versus the same quarter last year as the impact of project start-ups and increased Middle East volumes more than offset mature field declines and entitlement effects. Gas volumes decreased 520 million cubic feet per day or about 5% versus the fourth quarter of 2005, due to the impact on demand of warmer weather in Europe. New project volumes and better up time, including the absence of hurricane effects in the US, offset natural field declines. Turning now to the sequential comparison. Versus the third quarter of 2006, upstream earnings decreased by $270 million as lower realizations driven by an almost $10 per barrel decrease in crude prices reduced earnings by $820 million. However, this impact was largely offset by the increased volumes -- by increased volumes. Oil-equivalent volumes were up nearly 6% from the third quarter. Liquids production increased 1% sequentially as we concluded to ramp up production at Sakhalin 1, while natural gas production was up 14%, due to seasonal demand increases in Europe. Now looking at the full year results. Excluding special items, full year 2006 upstream earnings were a record $26.2 billion, an increase of $3.5 billion or 15% over 2005. The most significant factor driving that increase was markedly higher crude and natural gas realizations partly offset by production mix effects and net other items. Full year equivalent production was up 4% versus 2005 with increased volumes in Africa and the Middle East. Liquids volumes were up 6% from 2005, while natural gas volumes were up 1%. Excluding divestments and entitlement effects, oil-equivalent volumes were up 6.6%. For further data on regional volumes, please refer to the press release and IR supplement. Now let's turn to the downstream results. Downstream normalized earnings in the fourth quarter were nearly $2 billion, down $430 million from the fourth quarter last year. Lower margins reduced earnings by $820 million with markedly lower fuels refining and marketing margins partially offset by stronger lubes earnings. Other factors included positive LIFO and BorEx effect. Sequentially, fourth quarter earnings decreased by $780 million. The primary drivers were lower refining and marketing margins, while reduced earnings -- which reduced earnings by $790 million. Improved refining operations more than offset seasonally lower fuels, marketing and lube sales. Other factors included positive LIFO impacts offset by higher planned maintenance and turnaround expenses. Full year 2006 downstream normalized earnings were a record at just under $8.5 billion. Earnings increased $570 million from 2005, primarily due to stronger fuels and lubes marketing margins. Volume mix effects reduced earnings by $480 million reflecting higher planned turnaround activity, partially offset by self-help margin enhancement items, including raw material optimization and product upgrades. Other earnings effects improved earnings by $300 million, primarily positive BorEx and LIFO impacts. Focusing now on our chemical results. Fourth quarter normalized earnings of $1.2 billion were up about $400 million versus the fourth quarter of 2005, reflecting higher margins, stronger volumes and positive LIFO effects partially offset by costs associated with turnaround activity. Sequentially, fourth quarter chemical earnings decreased by $110 million, reflecting seasonal volume mix and other effects partially offset by positive LIFO impacts. Full year 2006 normalized chemical earnings were at a record, almost $4.4 billion, $980 million higher than full year 2005. Stronger margins in our integrated polyolefins and specialties businesses and higher volumes were the largest contributors to the improvement. Full year chemical prime product sales increased by about 2%, reflecting higher volumes across most business lines. Our record 2006 earnings confirmed that our unique portfolio of chemical product lines, broad geographic coverage and integration with our downstream and upstream facilities provides us with a competitive advantage and delivers industry leading performance. Turning now to the corporate and financing segment. As I mentioned earlier, we had a special tax item in the corporate and financing segment this quarter. Excluding that special item, the Corporation recorded fourth quarter earnings of $420 million in the segment, up about $360 million from the fourth quarter of 2005, primarily due to favorable tax items and increased interest income. Excluding special items, full year 2006 corporate and financing earnings of $24 million were up by approximately $180 million from 2005, primarily due to higher interest income. The effective tax rate for the fourth quarter was 37%. For full year 2006, the effective tax rate was 43%. The Corporation distributed a total of almost $8.9 billion to shareholders in the fourth quarter through dividends and share purchases to reduce shares outstanding. That's up almost $2.1 billion from the fourth quarter of 2005. Included in the $8.9 billion of fourth quarter distributions was $7 billion to purchase shares in excess of dilution. These purchases reduced the number of shares outstanding by 1.8%. For the full year 2006, we purchased $25 billion of shares in excess of dilution and reduced shares outstanding by 6.6%, further demonstrating our ongoing commitment to return cash to our shareholders. CapEx in the fourth quarter was $5.1 billion. That takes full year CapEx to $19.9 billion, in line with our previous guidance, and an increase of approximately $2.2 billion from 2005, reflecting increased upstream investments. Fourth quarter cash flow from operations and asset sales was $9.6 billion, including $2.4 billion in contributions to the US pension plan. At the end of the year, our cash balance was $32.8 billion and debt was $8.3 billion. Finally, I would like to mention two upcoming events. First in mid-February, we'll be releasing our 2006 reserves performance data. And second, as many of you will have already seen, our analyst meeting this year will take place on March 7th, including a live audio webcast beginning at 9 a.m. Eastern, 8 a.m. Central Time. The meeting will include an update of our forward business plans. Exxon Mobil's presenters will be led by Chairman and CEO Rex Tillerson. That concludes my prepared remarks and I would now be happy to take your questions.

[Operator Instructions] We'll take our first question from Doug Terreson from Morgan Stanley. Please go ahead, sir. Doug Terreson - Morgan Stanley: Congratulations on solid numbers, Henry.

Thanks, Doug. Doug Terreson - Morgan Stanley: In the upstream, you mentioned that weather effects were significant for European natural gas sales in relation to the year ago period.

Yes. Doug Terreson - Morgan Stanley: And on this point, can we attribute the year-over-year decline in product sales in Europe and Asia Pacific to the same factor? And if not, could you comment on the other major factors that were at work in the period?

Well, when you look at the product volume sales, I mean, there are some impacts associated with weather -- and overall demand on obviously, heating oil sales in the area. But if you look at the weather effects, when we saw Europe was about 18% warmer than last year. The United States was about 22% warmer as measured in degree days. And then if you look at the actual volumes that were down about 145 fourth quarter versus fourth quarter '05, there's a piece of that that is retail divestments. It's part of our ongoing divestment programs in the retail marketing area. You also saw -- that was offset some by higher INW and then we also had lower throughput in Europe and we saw some of that show up in fuel oil sales, associated with the Antwerp refinery being down in that time frame. Doug Terreson - Morgan Stanley: Sure.

So those were the primary impacts. Doug Terreson - Morgan Stanley: Okay. And also in A&P, I just wanted to get an update on project status and specifically on a couple of projects and specifically how you guys view your position on Point Thompson in Alaska, [Natuna] in Indonesia and Papua, New Guinea gas and kind of the brief next steps on those three projects.

Well, if you start with Point Thompson, basically there -- we've had an indication from -- or the state basically has taken away the -- or modified or did not approve our modified development plan there and revoked the leases, and we are currently in the process of pursuing that with them. We filed a couple of cases, as you may know. We asked for reconsideration of that -- those lease cancellations, which was denied. We're asking that to be reconsidered by the Superior Court and then we'll go -- we'll take it from there. We are also pursuing damages associated with the cancellation of those leases. Doug Terreson - Morgan Stanley: Sure.

When you look at Natuna, basically we are engaged in discussions there. Obviously, we'd like to move that forward. We're working with the Indonesian government on it. It's a challenging project. As you know, very high CO2 contents, and so we're basically working to have an amicable procedure going forward. Doug Terreson - Morgan Stanley: Okay.

And then Papua, New Guinea, basically we continue to look at different options there on how we'll progress that project, and right now, it looks like LNG has a possibility but we are basically going through -- still at the concept stage there. Doug Terreson - Morgan Stanley: Okay. Thanks a lot. Henry, thanks.

Yes.

We'll take our next question come from Doug Leggate with Citigroup. Please go ahead, sir. Doug Leggate - Citigroup: Thank you. Good morning, Henry.

Hi, Doug. Doug Leggate - Citigroup: Couple of things, Henry. I guess on the numbers really to help us reconcile things a bit. Could you walk us through the LIFO impacts and actually quantify them? On the downstream, just a follow-up, could you break out for me, please, the marketing and refining deltas both sequentially and year-over-year?

Yes, okay. Just starting with LIFO, if you look at the total impact of LIFO, there was about $400 million, and this is really a reflection of our ongoing efforts to optimize inventories and improving the efficiency of our entire supply chain, essentially. And so, if you look at those splits, there was about $280 million associated with downstream in 2006, most of that in the non-US. And then in chemical, we had $120 million positive, and that was split a little higher percentage in the US, about $70 in the US and the balance in non-US operations. And then if you are doing a comparison year-on-year, it was about $183 million above last year because this is something that we've had ongoing, -- as you know, ongoing effects as we continue to be able to optimize our inventory performance. Doug Leggate - Citigroup: Great.

And then your other question was around the -- just the marketing breakdowns. Looking at the fourth quarter, comparisons there. Doug Leggate - Citigroup: Yes. It looked like your capture rates were much better. I think the LIFO impacts account for a large part of it, so maybe it's not as critical as I thought it was.

Yes, if you look at -- if you just look at the fourth quarter versus fourth quarter comparison, most of the marketing -- I mean, most of the margin effects were in refining. And then that was -- and that was the big piece, small bit in marketing. Doug Leggate - Citigroup: Okay. Great. I don't know if that counts as two questions but let me try just squeezing in another one real quick. Your cash balance declined for, I guess, for the first time in quite a while. Any impact on your buyback plans going forward?

We haven't -- we're not announcing any change there. Doug Leggate - Citigroup: Okay. Great. Thanks, sir. Thanks a lot.

We'll take our next question from Arjun Murti from Goldman Sachs. Please go ahead. Arjun Murti - Goldman Sachs: Thank you. Henry, I recognize you have your analyst meeting coming up next month and you'll certainly make more comments on this front there, but your ENT capital spending has grown at a kind of a solid double digit clip over the last five years as you have spent on all of these major developments.

Yes. Arjun Murti - Goldman Sachs: You still have a big queue of developments to come.

Yes. Arjun Murti - Goldman Sachs: There's been industry inflation. You've done better than industry, but there is still industry inflation. Is there any reason to think your ENT capital spending doesn't continue to grow at a double digit rate or have there been some recent one-off factors in the last year or two that might slow the growth rate in the ENT capital spending going forward?

Well, I mean, it's really -- the growth that you see in our -- is really a reflection of the projects that we have in the queue and we have a good pipeline of projects. We are continuing to advance those. So last year -- we'll be updating this as we get together in March, but last year, basically, we were showing ourselves close to $20 billion going out in the future time frame. We'll be updating that basically reflecting the projects and the status of those projects and we'll talk more about it at the meeting. Arjun Murti - Goldman Sachs: That's great, and I guess in terms of my second question, obviously Angola has joined OPEC. This has been a major source of your West African growth. I know it is very hard to predict what countries will do or say in terms of limiting or controlling growth going forward but do you all think of Angola any differently now that it's part of OPEC? Do you sit there and say maybe we slow down future projects in that country? Is there any change in your outlook for Angola as a result of it?

No, we are very pleased with our Angolan developments and as you have no doubt seen, the exploration is going on in Block 31, 32. We have been pleased with progress there. But those projects will have to -- I mean, they are looking at how to bring those together to have a successful development. But we're still very encouraged with Angola, and don't really see this as a change from our perspective. Arjun Murti - Goldman Sachs: That's great. Thank you very much.

Yes.

And we'll take our next question come from Nicki Decker from Bear Stearns. Please go ahead. Nicki Decker - Bear Stearns: Good morning, Henry.

Hi, Nicki. Nicki Decker - Bear Stearns: So just specifically on the production volumes, can you talk about what happened in Africa? The Africa liquids production was a little bit lower than we had expected. And then for my second question, as we look into next year, and all of the factors that are affecting production, other than organic growth of sales and PSC effects and OPEC issues, is there any reason to believe that your production might vary from your targeted 3% to 4% growth next year? I'm sorry, in 2007. That would be this year?

Yes, right. Just starting with the Africa piece of this. The African volumes are primarily driven by lower Angola volumes due to the entitlement effects and we have been seeing those going on a continuing basis. Some of that production comes from -- in fact, all of it is production sharing contract related. And those PSCs, they have -- that entitlement is reduced when the cumulative production or cumulative profitability thresholds are reached so there's been continuing impacts there as we have seen higher prices, all of which basically has made those projects more attractive and really we're very pleased with their performance. If you look at the other impact in that time frame, we did have some unscheduled downtime in Nigeria that also impacted in the period that may have been part of the miss that you had. Nicki Decker - Bear Stearns: Okay. So can you talk about the impact in Nigeria, Henry?

I mean, it was basically associated with -- I will have to get some specifics about what that -- what that was. Yes, let me come back to you on that, because I don't have anything right at the tip of my fingers here. Nicki Decker - Bear Stearns: Okay.

When we look at -- when we look at the production, we don't really -- I don't really have a product target going forward. The 3% that we have talked about, when you look at -- that's an outcome of the projects that we have in the plans, and as we said, it will be lumpy depending on how projects come on, and it was a reflection of those projects over a longer period of time. So you see -- you are going to see some positive peaks when you have more projects coming on and dips in that, and we really haven't tried to get into year by year kind of outlook on that. Nicki Decker - Bear Stearns: Thanks, Henry.

Yes. Well, I guess the bulk -- from what I'm looking here, maybe the bulk of that Nigerian piece is associated with declines. And I just don't have any specifics on the outages at this point. Nicki Decker - Bear Stearns: Okay. Great. Thank you.

And we'll take our next question from Paul Cheng from Lehman Brothers. Please go ahead. Paul Cheng - Lehman Brothers: Hi, good morning. Henry, on the -- if we are looking at over the next four months if I look at, say, from a collective basis for the quarter is going to reach the payoff period, what may be a job in your production related debt?

And you're talking about Angola or --? Paul Cheng - Lehman Brothers: No, I mean on your global portfolio. I mean, you must have some project that you are bringing on a lot of project over the last three years with the high prices. I presume that some of them over the next 12 months will reach the payoff period and it's such that your report production will see a reduction. Any kind of --?

Yes, I -- Paul Cheng - Lehman Brothers: -- rough number you can share that the impact may be for next year, for 2007?

Right. No. I don't have -- we'll talk about our production profile, which we'll take into those -- into account those kinds of effects when -- as we are doing that forward projection. But again, it's going to depend on the price. It depends on specific contracts. There are a lot of individual production and they're -- depending on when they started up and the time frame that they have been running, how they have been performing, all of those things will impact that, and it will be incorporated into that forward projection, but I don't have anything that I can give you in terms of a forward, forward look on that. Paul Cheng - Lehman Brothers: Okay. If I could, I want to sneak in two more questions in here.

Yes. Paul Cheng - Lehman Brothers: One, if you can give us an update where is the [Kitachee] project for you? I mean with the rapid rise in the cost, is the project still a go or that you guys having some second thought? And also I think during the -- your recovery (inaudible), you had indicate some of the foreign exchange gain or loss, I think in both chemical and the O&M, I don't know whether you have that in the upstream, if you can break it down for us versus the third quarter, what is the impact?

Yes, I sure can. If you look at the BorEx effects in the third -- versus the third quarter, they were almost nothing. I think for the total corporation, it was under $30 million. So there's nothing in there on BorEx in the sequential comparison. Back on the Qatar question with the GTL project, I mean the technical work continues there. There are cost pressures, no question about that. We are working very hard on the concept of development with the Qatarries and what we have found in all of these projects is the real focus -- you have to get that development concept right or you lose it. And so that -- we're spending the time to get that concept right, and so when we're ready to go forward from there, we will let you know, but we are still optimistic about it. We are working on that development concept. Paul Cheng - Lehman Brothers: So I assume that I think initially, there were some expectations by 2011, 2012. That time frame probably is too aggressive?

We will be updating whatever on those kind of things at the analyst meeting. Paul Cheng - Lehman Brothers: Okay. Thank you.

Right.

We'll take our next question from Dan Barcelo from Banc of America. Please go ahead. Dan Barcelo - Banc of America: Hi, good morning. Regarding the downstream, it seems a lot of your competitors are really looking to sell a lot more refining assets. In particular, these values seem to be a little bit below replacement costs, especially when you compare it to Middle Eastern type new building costs.

Yes. Dan Barcelo - Banc of America: I don't know if you could just comment rather broadly on Exxon's view of, in particular, downstream, in particular in terms of divestments or additions.

Yes. I mean, we're not going to -- I'm not going to speculate on specific divestments. We are always looking at our portfolio. So -- and looking at what is -- why there's more value to somebody else than there is to us, and we'll market things, and you did see us -- I mean we sold our -- our Englestock refinery. So -- but I would tell you that overall, when we look at the refining business, we feel very good about the refining business. We work hard on integration with our chemicals business and because we have those integrated operations with chemicals, with our lubes businesses, it makes them more resilient. The other things, the technologies that we employ in molecule management and other techniques that we have and improving reliability, operations, integrity, we've had very good returns in this business and what we do is -- every one of our refineries has a forward looking plan, a five-year plan, and they are basically planning to stay ahead of whatever that long-term margin trend is, which you have heard us talk about before. If you look at the long-term trend, it is down. We make sure we are staying ahead of that curve. So we feel good about the assets that we have there, but I don't rule out that there might be specific pieces that will be more valuable to somebody else than us, and we'll let you know if those things occur. Dan Barcelo - Banc of America: Perfect. Thanks very much.

And we'll take our next question from Paul Sankey from Deutsche Bank. Please go ahead. Paul Sankey - Deutsche Bank: Hi, Henry. Forgive me if you have answered this question. I know the word capital is being bandied about but my understanding is that you've got some issues there with the LNG trains. Could you just fill us in? I think they are shut down as far as I understand it or at least some of them. Could you just fill us in on the latest news there?

Yes. Well, what you were hearing about, we had some hydrate problems in the pipelines coming in. And basically, those facilities are essentially back up at this point. But it did impact us during the month of January. And what happened, we saw some rising pressure. Our monitoring equipment caught it. So we saw the pressure drop, increasing there, and then basically we are going through a process of clearing that out, which takes a little bit of time. So there was some -- we work with customers because there were some customers we had to restrict volumes on. And they are basically back up now. Paul Sankey - Deutsche Bank: Okay. So the story was -- I think it was Train 4 -- was it 3, 4, and 5 were down, but basically what you are saying is they were only out for, what, I guess a matter of three weeks, two-three weeks?

Yes, and the impact varies -- it's not -- basically, it makes sure that we're cleaning the lines up and so you ended up with less than full impact as you went through this time frame. And then, of course, we are going through a very thorough investigation to understand what variables changed and what caused the problems that we had there so that it won't happen again. Paul Sankey - Deutsche Bank: Right. And for my second question, I'm going to ask you a double question as part of it. Firstly, could you just comment on what your turnaround schedule or downtime will look like in terms of turning around refineries, if there's anything unusual in the US and internationally this quarter and this year? And a follow-on is that it is notable, following up on Doug's question, that volumes are down if we look at the whole year of '06 from '05. Was that disposals or was it -- was there some other reason why your sales of product, petroleum products was quite sharply down compared to global demand? Thanks.

Yes, okay. First off, I mean, just looking at the turnaround schedule, this year was a little bit heavier than typical and we are seeing it being similar next year, so in the same kind of -- in the same kind of range. And that is the primary impact on volumes. The other, again, is divestments, and there's hydrating in our portfolio. It's lower refinery throughputs and then you see that roll through in things like fuel oil sales. You'll see some in the specialty product sales because we had more pull to chemicals and of course, Englestock came out of that -- those numbers as well. So those are -- those were the big impacts. Paul Sankey - Deutsche Bank: Right. And if we look at -- if you look at what the real oil market is doing, I guess it was up by what percent in '06 would you say on your numbers, and what do you expect in '07 and I will leave it there?

In terms of overall liquid demand? Paul Sankey - Deutsche Bank: Yes.

Yes, I mean and that's probably the best way to look at it. We do the global balances and what are projected in our original projections would have been higher than how it's turned out this year. And we'd see overall demand worldwide somewhere in the million barrel a day increase, something maybe a little less than that when you took a total global balance. And that really reflects -- when we start looking behind it as to what impacted that, we think weather was a significant factor in there. If you look at the demands in the first quarter of last -- '06 and fourth quarter of '06, also if you look at some of the -- just the pricing between fuel oil and natural gas, there was fuel switching that was going on. So we think those were some of the things that were driving demands a little bit more than overall economics because when we look at the comparisons of -- for the long haul, it really correlates best with economic growth and we really haven't seen any slowdowns in economic growth and that's really what drives it overall in the longer term. Paul Sankey - Deutsche Bank: Thanks, Henry.

Yes.

And we'll take our next question come from Mark Gilman from The Benchmark Company. Please go ahead. Mark Gilman - The Benchmark Company: Henry, good morning. I had two questions. First one relates to Nigeria. It is my understanding that you have opted not to proceed with a grassroots LNG project in Nigeria and I was wondering if you could confirm that and discuss briefly the reasons for that decision. My second question relates to tax rate. If I quickly to through the arithmetic and make the adjustment for the special item, the tax rate gets up to about 39% effective basis for the quarter if I'm doing the math right. Given business mix and things of that sort, where we were in this regard in the first three quarters of '06, a rate in the 42% to 44% range would have seemed to have been where it should have been. I wonder if you comment on, perhaps, some of the factors that are responsible for that difference, and whether they are sustainable going forward.

Yes, right. Well, if you look at the first stuff on the Nigerian LNG project. I mean it's really premature for me to comment on that. We're still in the working phase on that to look at that project so there hasn't been any final decisions made one way or the other there. When you look at the tax impact, the special item was one piece that impacted our overall tax in the period but then as I mentioned also, there were some other items in our corp. and fin that increased -- that were positive to earnings. Those were -- and the reason -- the one was broken out as a special because it was large and it was non-recurring so it was identified as a special. The others -- we have always seen a certain number of tax effects, as you know, just because of the size of the Company, all the different jurisdictions we are involved in, but in the period, there were a number of return finalizations that occurred that basically went all in the same direction so it was a combination of those impacts that ended up. If you look at our longer term projection on tax, we would still guide in the 40%, 45% range and probably toward the higher end of that so typical of what we saw earlier in the year is, I think, the best way to look at it. Mark Gilman - The Benchmark Company: Thanks, Henry.

Yes.

And we'll take our next question from Mark Flannery from Credit Suisse. Please, go ahead, sir. Mark Flannery - Credit Suisse: Hi, Henry.

Hi, Mark. Mark Flannery - Credit Suisse: Could you comment a little bit on what is going on in Asian R&M? We have seen some fairly weak numbers out of the Japanese market recently. You have a big business there. I'm just wondering how weak was that in the fourth quarter and is there any sign that margins or earnings or sales are going to get a bit better up there?

Yes, if you look at the margins in refining, out in the Asia Pacific, they were off. It got pretty weak during the fourth quarter of '06, actually, ex-Japan. It was outside of Japan. Japan had actually strengthened some in the period. And then if you look at -- on the marketing side, it varies but basically we were up. The marketing margins were up in Asia Pacific and Japan, comparing the -- if you go fourth quarter versus fourth quarter. So, most the negative impact on marketing margins or refining margins were US and Europe in those periods -- in the comparative period. Mark Flannery - Credit Suisse: And what about sales volumes, specifically in Japan I'm thinking. Are you seeing any weakness there or --?

Well, I don't know if I've got a breakdown on Japanese demand. Mark Flannery - Credit Suisse: Maybe you can talk about Asia in general, maybe.

Yes. If I look at Asia Pacific, it was down about -- quarter-on-quarter, it was down about 5%, and that really -- it was essentially mostly associated with lower runs and then we see the continuing growth in our chemicals business. We did have more transfers to chemicals so that's the other thing that goes on that's impacted some of those sales. It was basically a positive story there. And those were the bigger impacts. Mark Flannery - Credit Suisse: Okay. Thanks a lot.

Yes.

And we'll take our next question from Neil McMahon from Sanford Bernstein. Please go ahead. Oxy Oswald Clint - Sanford Bernstein: Hi, good morning. Hi, it's Oxy Oswald Clint here on behalf of Neil who is at the Shell presentation. Just two questions --

Okay. Oxy Oswald Clint - Sanford Bernstein: Could you give us an update, please, on your decline rifts across the portfolio in 2006 versus 2005? And secondly, you mentioned Dalia in your press update this morning. Can you confirm any spending or the rumors that it's actually progressing well ahead of expectations?

Yes. I mean, as far as I know, Dalia is coming up and ramping up. We're expecting to get up to full rates by the end of the -- I think it's the first quarter, targeted at 225. So I mean, it's come on well, but it's probably better to focus that back at the operator. And then if you look at our declines, there really aren't any big surprises there. We look at the year -- obviously we monitor this very closely, field by field. You do have more decline in the maturer markets but if you look at our overall target, or guidance that we have had, we have said 4% to 6%, closer to the higher end of that range, and we have seen nothing that's really taken us out of there, nothing unusual in that at all. Oxy Oswald Clint - Sanford Bernstein: Okay. That's great. Thank you.

Yes

[Operator Instructions] We'll take our next question from John Herrlin from Merrill Lynch. Please go ahead, sir. John Herrlin - Merrill Lynch: Yes, hi. Henry, I know that later on this month, you are going to announce your reserve additions.

Yes. John Herrlin - Merrill Lynch: But given Aira, Kizomba, Qatar, Obrizagam, would it be fair to say that your production replacement for 2006 would be better than 2005?

I'm not really not going to get -- we'll have it out here shortly. The thing that you have to remember in all of these things, though, is the timing of when a project comes on and when it's funded. That's -- mostly it's decisions and recognition of reserves or actually when you have a full funding decision and you are proceeding forward. So there's often a skewing between when something is funded and when it comes online that those reserves are often recognized at different periods. But we'll update you here shortly. John Herrlin - Merrill Lynch: I thought it was worth a shot. Thanks anyway.

Yes, okay. John Herrlin - Merrill Lynch: Next question is on Venezuela. Even though it's not a large part of your business, lots of headline risks these days. Have you heard from them? When will you hear from them or how are things going there?

Well, it's -- I mean, the discussions continue. We don't really have anything new to report there. Our affiliate has been informed that they would like to migrate to mixed enterprise, and basically the ball is a bit in Venezuela's court right now. So we'll see. We'd like to get an amicable resolution, obviously. We are looking to maintain the shareholder value from the projects that we invested in there and so hopefully we can work out something that will allow us to do all of that. John Herrlin - Merrill Lynch: Great. Last one from me. US production decline rates, just normal field declines?

Yes. There was a little bit in there associated with Prudhoe Bay loadings that impacted in the period, but that's the biggest thing. John Herrlin - Merrill Lynch: Thanks, Henry.

Yes.

[Operator Instructions] We'll take our next question from Mark Gilman from The Benchmark Company. Please go ahead. Mark Gilman - The Benchmark Company: Henry, I guess I get a second shot! My two this time. There was reference to a large pension contribution --

Yes. Mark Gilman - The Benchmark Company: -- in your comments and I'm wondering whether we should expect a similar level contribution for this year.

No. I wouldn't -- we evaluate these things on an ongoing basis. I can't really tell you yes or no on that. We constantly are looking at that and deciding when it makes sense to. We saw an opportunity here and -- for funding that we went ahead and exercised this year but I wouldn't read anything into that on a forward basis. Mark Gilman - The Benchmark Company: Okay, and secondly, can you give us in absolute terms the price finalization impacts on the refining area split US and foreign in the fourth quarter?

Yes, if you look on an absolute basis for price finalization, it was a total of $120 million positive, $60 of that -- 50/50 split, $60 US, $60 non-US. Mark Gilman - The Benchmark Company: Thank you, Henry.

This will conclude today's question-and-answer session. I would like to turn the conference back over to Mr. Hubble for any additional or closing remarks.

I would just like to thank everybody for your time and questions this morning. We certainly look forward to sharing more details on our record 2006 performance and forward business plans at the analysts meeting in March. Hope to see you there. Thanks.

Once again, ladies and gentlemen, this will conclude today's conference. We thank you for your participation. You may now disconnect.