AQUIFER USE AND MAINTENANCE

10 YEARS OF HISTORY

FORWARD-LOOKING STATEMENT

Certain statements in this presentation constitute “forward-looking statements” or “forward-looking information”. All of the forward-looking statements in this presentation are qualified by the assumptions that are stated or inherent in such forward-looking statements. Although Nexen believes these assumptions are reasonable, the reader should not place an undue reliance on these assumptions and such forward-looking statements.

The forward-looking statements are subject to known and unknown risks and uncertainties and other factors that may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such statements. Except as required by law, Nexen undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained herein are expressly qualified by this cautionary statement. Readers should also refer to the risk factors and uncertainties contained in our 2012 Annual Information Form and to the quantitative disclosures about market risk and our forward-looking statements contained in our 2012 Management Discussion and Analysis available at www.nexeninc.com or www.sedar.com, or in CNOOC Limited’s Annual Report on Form 20-F, which is available at www.cnoocltd.com or www.sec.gov.

Any reserves estimates in this disclosure were prepared February 2013 with an effective date of December 31, 2012. The estimates of reserves and future net revenue have been prepared by an internal qualified reserves evaluator in accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101") and the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook"). Nexen’s estimates of reserves are prepared in accordance with SEC requirements and are attached to our 2012 Annual Information Form.

All financial information contained within this presentation is in Canadian dollars unless noted otherwise.

Nexen Energy ULC is a wholly-owned subsidiary of CNOOC Limited, which is listed on the NYSE, the Stock Exchange of Hong Kong and the TSX. Information regarding CNOOC Limited is available at www.cnoocltd.com.

2

3

CNOOC LIMITED: GLOBAL ASSETS

Nigeria

Cambodia

Indonesia

Australia

Congo

Myanmar Trinidad and Tobago

Algeria

Argentina

Uganda

Qatar

Iraq

Gulf of Mexico

USA

Production Development Exploration Nexen Assets

Equatorial Guinea

Canada

Papua New Guinea

Gabon

North Sea

Colombia

Yemen

Poland

Brazil

NEXEN OIL SANDS

• Nexen holds billions of barrels of contingent recoverable oil sands resource, including:

– Long Lake

– Kinosis

– Syncrude Canada – 7.23% WI

– Hangingstone – 25% WI

– Other projects

• Expected to produce decades of steady production, cash flow & value

• On behalf of CNOOC Limited, Nexen provides strategic oversight for an equity interest of 12.39 % in MEG Energy

4

*For information about our oil sands resource estimates, see our November 15 , 2010 news release, available at www.nexeninc.com or www.sedar.com

Long Lake Acreage Kinosis Acreage Hangingstone Future Phase Acreage Upgrader MEG Energy Syncrude

LONG LAKE

• In-situ oil sands extraction project 40 km south east of Fort McMurray

• Uses steam assisted gravity drainage and integrated upgrading on site

• OrCrude technology and hydrocracking/gasification used to produce Premium Synthetic Crude (PSCTM)

• Pilot (Pad 1) from March 2003 to August 2006

• Commercial production of bitumen in 2008, first PSCTM production in 2009

5

LONG LAKE – UNIQUE PROCESS

6

PRODUCED WATER TREATMENT

7

BFW TANK

ST

EA

M

GE

NS

POND

PRODUCED WATER

UPGRADER RECYCLE

SOURCE WELLS

PRODUCED WATER

UPGRADER RECYCLE

SOURCE WELLS

HLS A AFTER FILTERS A - E

WAC PRIMARIES A - E

HLS B AFTER FILTERS F - J

POLISHERS A - C

HLS C AFTER FILTERS K - N

WAC PRIMARIES F - G

POLISHERS D - E

BFW TANK

PRODUCED WATER

SOURCE WELLS

Water Usage Groundwater and pond water makeup to Hot Lime Softeners Reduced losses (near zero in 2013) in the reservoir have led to low use of brackish water (273 m3/day) and low recycle rate

PROCESS OVERVIEW

Fresh and Saline Water Source Wells

Upgrader & Cogens

LONG LAKE SAGD WELLS AND CENTRAL PROCESSING FACILITY

9

Local geology and hydrostratigraphy

11

SUB-REGIONAL FLOW

SW

NE

SW NE

Adapted from Rakhit 2002

Colorado Group

Drift

Grand Rapids

Clearwater

Wabiskaw-McMurray

Devonian formations

1. Topographically-driven system from hills to rivers 2. Groundwater flows: > vertically in aquitards (low k units) > laterally in aquifers 3. ‘Slow’ system: > vertical recharge = low 10s of mm/year (a few % of annual precipitation) > velocities in aquifers = a few to low 10s of m/year 4. Bedrock units are (severely) sub-hydrostatic > McMurray pressures are commonly 1000-1500 kPa sub-hydrostatic > Slow recharge combined with great horizontal k and deeply incised rivers

Gregoire Channel (Quaternary-age)

GROUNDWATER MONITORING NETWORK

• Water source and monitoring wells in various aquifers:

– Quaternary sediments

– Gregoire Channel

– Grand Rapids B

– Clearwater A

– McMurray

Map Reference: 2013 Annual Groundwater Use Report: Quaternary, Grand Rapids and Clearwater Source Wells, Long Lake Project (Water Act Licence No. 00235895-01-00) Matrix Solutions Inc., March 2014

GR 9-12

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711 mg/L2350 mg/L

1050 mg/L

1470 mg/L

4280 mg/L

3630 mg/L

3620 mg/L

1450 mg/L

751 mg/L

1810 mg/L

1430 mg/L

5770 mg/L

6840 mg/L

1180 mg/L

1690 mg/L

15?? mg/L623 mg/L

1460 mg/L

1560 mg/L

1800 mg/L

3300 mg/L

5650 mg/L

2510 mg/L

696 mg/L

1180 mg/L

2140 mg/L

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R6R7

Grand Rapids Salinity Mapping

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TDS (mg/L)

14

*

Fresh Source Wells – Water Quality - TDS

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T84

T85

T86

T87

R5R6R7

Clearwater A Salinity Mapping

7 8 9

TDS (mg/L)

16

Note: • Saline source wells have not been produced very much (yet) • Wells not sample in 2013 due to extreme cold and equipment malfunction

Saline Source Wells – Water Quality - TDS

Freshwater Use at Long Lake

17

GR 9-12

GR 6-14

• Use of Freshwater:

1. Demineralized water make-up (UPG and cogens)

2. Utility and plant use (UPG and SAGD) 3. SAGD steam make-up (HLS’s) 4. Potable 5. Others (incl. drilling)

Tho

usan

ds (

m3 )

18

Saline Water Use at Long Lake

0%

5%

10%

15%

20%

25%

0

50

100

150

200

250

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Th

ou

san

ds

m3

Saline Water % SW/FW

• Saline water make-up: • 99,777 m3 in 2013 for

steam make-up (HLS’s)

HISTORIC AQUIFER USE

Pilot Phase

Operating Phase

WELL AND AQUIFER PERFORMANCE

Reference: 2013 Annual Groundwater Use Report: Quaternary, Grand Rapids and Clearwater Source Wells, Long Lake Project (Water Act Licence No. 00235895-01-00). Matrix Solutions Inc., March 2014

21

COMPARISON 2012 TO 2013 DRAWDOWN

22

WATER USE REPORT REQUIREMENTS

• A requirement of Nexen Energy ULC’s License 00235895-01-00, as amended, is to

– “… develop and maintain a groundwater flow model to ensure the long term sustainability of the Grand Rapids Formation aquifer(s) and other aquifers, within the lease area, and in conjunction with the diversion of groundwater for industrial purposes by adjacent lease holders.”

• Further to this, the license specifies that the simulations are to be presented in a report every 2 years.

23

GROUNDWATER MODEL HISTORY

• Nexen and CPC developed independent models in in 2007

• Nexen and CPC retained Golder to construct and calibrate a Joint Regional Groundwater Flow Model in 2010 – 2011

• Model worked on by Matrix Solutions Inc. for 2013 Water Use report (minor modifications)

WELLS IN 2013 MODEL

• Model includes water source wells in:

• Grand Rapids

• Clearwater

• Quaternary

• Gregoire Channel

• Both non saline and saline water use

• Divided into 3 main areas

• West of GC

• Gregoire Channel (GC)

• East and South of GC

Reference: 2013 Annual Groundwater Use Report: Quaternary, Grand Rapids and Clearwater Source Wells, Long Lake Project (Water Act Licence No. 00235895-01-00). Matrix Solutions Inc., March 2014

GR WELLS WEST OF GREGOIRE CHANNEL

• Good match on trends but over predicts in some wells

• Furthest and most western well (closest to Anzac) has a very good match

Reference: 2013 Annual Groundwater Use Report: Quaternary, Grand Rapids and Clearwater Source Wells, Long Lake Project (Water Act Licence No. 00235895-01-00). Matrix Solutions Inc., March 2014

GREGOIRE CHANNEL WELL

GR WELLS EAST OF GREGOIRE CHANNEL

• Good match on trends but over predicts in some wells (but less than in wells west of GC)

• Some very good matches

Reference: 2013 Annual Groundwater Use Report: Quaternary, Grand Rapids and Clearwater Source Wells, Long Lake Project (Water Act Licence No. 00235895-01-00). Matrix Solutions Inc., March 2014

SOUTHERN AND KINOSIS WELLS

• Good to reasonable matches

• Drawdown in Clearwater wells is over predicted

Reference: 2013 Annual Groundwater Use Report: Quaternary, Grand Rapids and Clearwater Source Wells, Long Lake Project (Water Act Licence No. 00235895-01-00). Matrix Solutions Inc., March 2014

GRAND RAPIDS DRAWDOWN 2011 VS 2013

Reference: 2013 Annual Groundwater Use Report: Quaternary, Grand Rapids and Clearwater Source Wells, Long Lake Project (Water Act Licence No. 00235895-01-00). Matrix Solutions Inc., March 2014

30

COMPARISON TO MEASURED

Measured Simulated

Reference: 2013 Annual Groundwater Use Report: Quaternary, Grand Rapids and Clearwater Source Wells, Long Lake Project (Water Act Licence No. 00235895-01-00). Matrix Solutions Inc., March 2014

31

SUMMARY

• Nexen Long Lake uses steam assisted gravity drainage and integrated upgrading on site

• Freshwater Use for:

1. Demineralized water make-up (UPG and cogens) 2. Utility and plant use (UPG and SAGD) 3. SAGD steam make-up (HLS’s) 4. Potable 5. Others (incl. drilling)

• Saline water Make-up for SAGD steam (HLS’s)

• Groundwater model performs relatively well and shows good match on trends

• Nexen’s groundwater monitoring network capably measures the effects of groundwater diversion at Long Lake

32

THE END

• Acknowledgements

– Nexen would like to thank:

• Golder Associates

• Matrix Solutions Inc.

• Questions?