creating new energy markets through teamwork and technology

Remarks by Rex W. Tillerson
Chairman and CEO, Exxon Mobil Corporation
Seventh Doha Conference on Natural Gas
Doha, Qatar
March 9, 2009

It is a pleasure to be in Qatar once again, and I am honored to have this opportunity to address the Seventh Doha Gas Conference.

The Doha Conference has rapidly become a major event in the energy industry. And like the nation of Qatar, it has become a place where innovative ideas are being launched and a brighter future is being built.

Natural gas is playing and will continue to play an increasingly important role in building this brighter future. As the theme of this year’s conference suggests, it represents a “cleaner fuel for tomorrow.” To meet growing energy needs and to mitigate the growth of greenhouse-gas emissions, we must develop and deliver greater supplies of natural gas to markets worldwide.

To highlight the critical importance of increased natural gas supplies, consider the scale of the energy demand challenge we face. Despite the current economic downturn, global energy demand is expected to be about 35 percent higher in the year 2030 than it is today. Much of this increase will come from developing countries as growing populations seek higher standards of living. About 1.6 billion people worldwide still are without electricity, and about 2.4 billion people continue to depend on basic, carbon-intensive fuels such as charcoal. Providing access to safe, reliable, affordable, and cleaner energy sources is our industry’s primary responsibility.

To fulfill this responsibility and meet the world’s growing energy needs, we must continue to develop a diverse energy portfolio. All economic sources are needed. Within this mix, natural gas is expected to be the fastest-growing major fuel source, increasing by more than 50 percent by the year 2030, when it will have overtaken coal as the second-largest global fuel source. Much of this demand for natural gas will come from the power-generation sector, reflecting the fact that it is not only an efficient fuel source, but also produces fewer emissions than other sources such as coal.

Strengthening and enlarging the international market for natural gas is essential to fulfilling its potential. During economically challenging times such as these, the urge to focus inwards and disengage from the global marketplace can be strong. But nothing could be more counterproductive. An international market for natural gas — enabled by partnerships, spurred by technological innovation, and supported by sensible and stable public policy — is more important than ever. It is a key to hastening the recovery of our global economy and facilitating the search for solutions to our environmental challenges.

Keeping these facts in mind, it is evident why Qatar is an example to the world. We must learn from Qatar’s vision and Qatar’s policies.

We will need new supplies of energy — like natural gas from the North Field. We will need advanced technologies that enable us to achieve new economies of scale for liquefied natural gas. And we will need stable, sensible policy frameworks that encourage long-term investment — policy frameworks such as those upheld by the Government of Qatar.

Under the wise leadership of His Highness the Emir of the State of Qatar, the country has created the strong business environment necessary to attract the levels of significant investment required to develop Qatar’s oil and natural gas resources — as well as encourage the teamwork and technology that can maximize the value. And these conditions were created in an oil and gas price environment that was not unlike what we have today.

At ExxonMobil, we are proud of our long relationship with the government and people of Qatar — and we are honored to have played a role in Qatar’s impressive rise.

The extent of our friendship is unique and historic, spanning the entire energy value chain — from production to distribution to marketing.

Our joint success is a testament to what is possible when national and international energy companies work together. And it is a reminder that, with teamwork and technology, we can meet the world’s growing need for energy — and bring progress and prosperity to millions.

In order to bring required new energy supplies to market, our industry must commit to enormous, long-term, capital-intensive, and technologically sophisticated projects. The International Energy Agency estimates that cumulative investment in global energy supply and infrastructure needed to the year 2030 will exceed $25 trillion.

All of the elements needed to ensure future projects are executed successfully can be found in the State of Qatar, where the government’s policies have delivered dramatic results for all to see. On behalf of the men and women of ExxonMobil, I thank you for your friendship and your role in helping our joint ventures succeed.

Qatar’s achievements began with a unique opportunity. In the early 1990s, Qatar faced the challenge of developing the world’s largest non-associated gas resource, the North Field. Qatar’s leadership then made several very important commitments to free and open trade policies, the rule of law, and contract sanctity — all of which put in place the conditions necessary for significant, long-term investment. Qatar’s leaders decided to seek a range of options that would deliver the maximum value for their resources — from LNG to pipeline gas to petrochemicals.

By combining the unique strengths of Qatar Petroleum and ExxonMobil in a model NOC-IOC partnership, we were afforded the opportunity to work together and seek innovative solutions neither of us could have accomplished alone. And that successful working model continues today.

Qatar and Qatar Petroleum have a focused vision for national energy development, a unique understanding of their natural resources — along with their own technical, commercial, and managerial expertise.

Thanks to our solid partnership and combined efforts, Qatar Petroleum and ExxonMobil have found innovative solutions to improve offshore production; the processing, transportation and sale of LNG; domestic gas supply; and petrochemical operations.

The result of this partnership speaks for itself.

With new projects starting up over the next two years, Qatar Petroleum and ExxonMobil Joint Ventures in Qatar will bring more new LNG capacity to market than any other existing LNG venture. And over this two-year period, our joint ventures are expected to increase annual LNG production in Qatar to more than 60 million tons.

None of this would have been possible without innovation. The technological breakthroughs our partnership has achieved in increasing the size and efficiency of LNG carriers is a striking example.

In July, a South Korean shipyard held a celebration to mark the naming of the first Q-Max ship, the Mozah, named for Her Highness Sheikha Mozah Bint Nasser Al-Missned. In August, naming ceremonies were held for five more Q-Max ships.

These impressive new ships were developed in conjunction with our partner Qatar Petroleum. They can transport up to 80 percent more LNG cargo than current conventional-size ships. They are also exceedingly more energy efficient than conventional tankers. In fact, energy efficiency has improved by 40 percent per delivered BTU of LNG with corresponding lower unit greenhouse-gas emissions

Such innovations enable us as partners to achieve economies of scale for the North Field resource, and allow us to affordably supply Qatari LNG to distant markets, including many in Europe and the United States.

Of course, the on-going success of projects of this scale requires human talent to ensure teamwork and technology come together.

That is why our local affiliate ExxonMobil Qatar Incorporated committed to and is working to achieve the target Qatar has set for employment in the oil and gas sector — a 50 percent Qatarization rate.

At ExxonMobil Qatar, we are hiring, training and developing Qataris for key engineering and managerial roles. Such efforts began early. We recruit from Qatar University and other colleges at Education City, and we provide on-the-job training for our Qatari employees by providing them important work experiences at our operations worldwide.

We have also built a research center at the Qatar Science and Technology Park, which will be inaugurated one week from today. At the Park, we will address challenges associated with the unparalleled growth of Qatar’s gas industry.

And we will collaborate with academic and research institutions in Qatar and share technological breakthroughs through consulting and training.

The development of the capability to reach global markets for liquefied natural gas and the leadership of Qatar are reasons the world can face the future for energy with greater confidence and optimism.

By increasing the availability and affordability of natural gas, we are diversifying the world’s energy portfolio. We are strengthening global energy security. And with increased natural gas production we are bringing to market a cleaner-burning fuel source.

There is no doubt that in the decades to come, Qatar will continue to be a fulcrum of the international LNG market and a leader in supplying energy to fuel the world’s economic growth. And just as important for that future is the example of what Qatar’s wise and stable policies have made possible. In the current weak global economy, the challenge to achieve best value for competing LNG supplies will require the same close cooperation and commitment to stable policies that has underpinned earlier success in Qatar. While these weak demand conditions may persist well into 2010, Qatar LNG is well positioned to deal with the current weak demand environment due to its low cost supplier position and connections to markets the world over due to Qatar’s favorable supply chain and logistics position.

In closing I would like to congratulate His Highness Sheikh Hamad bin Khalifa Al-Thani the Emir of Qatar on the launch of Qatar’s National Vision 2030.

This is a truly world-class vision, which will ensure appropriate focus on the Four Pillars of human, social, economic and environmental development.

ExxonMobil is proud of its more than fifteen years of work with the State of Qatar and Qatar Petroleum and of our achievements in the energy sector here in Qatar. We are also proud of our corporate social responsibility activities, which are fully aligned with the Four Pillars that support the National Vision 2030. We look to the future with optimism toward working with the leadership in Qatar and the respective authorities in the years to come in realizing that national vision.

Thank you.