News

Nexen, OPTI Receive Go-Ahead for Long Lake Oil Sands Project

August 7, 2003

Calgary, Alberta, Aug.7, 2003 – Joint-venture partners Nexen Inc. and OPTI Canada Inc. have received approval from the Alberta Energy and Utilities Board ("EUB"), and legislative assent from the Province of Alberta to proceed with the $3.0-billion Long Lake oil sands project.

In its decision, the EUB praised the companies' efforts to engage local communities in their project planning. "The Board commends OPTI and Nexen for their proactive approach to consultation and their success in reaching agreement and understanding with a number of aboriginal communities and other stakeholders."

"This is great news," said Gary Nieuwenburg, Vice President, Synthetic Crude for Nexen. "Securing approval without a hearing is a major milestone for the Long Lake Project that reflects the joint-venture partners' commitment to involve community stakeholders and regulatory authorities from the outset of the project."

"With regulatory approval in place we are continuing our efforts to allow the partners to make a final commercial decision on the Long Lake Project by the end of the year," said Sid Dykstra, President & CEO of OPTI. "The input we've received has resulted in enhancements to the project and we will continue to actively collaborate with our stakeholders as we move forward."

The Long Lake Project, located 40km southeast of Fort McMurray in northern Alberta, is a 50/50 joint venture of OPTI and Nexen. The first phase of the project consists of 70,000 barrels per day of steam assisted gravity drainage oil production, integrated with an upgrading facility using patented OrCrude™ upgrading technology combined with commercially available hydrocracking and gasification. The Long Lake lease has a long reserve life, will provide steady cash flow, and has ample capacity to expand beyond this first phase of the project.

The project will produce an end product of 38-degree API premium synthetic crude with very low sulphur content, making it a highly desirable refinery feedstock. Production from the Long Lake Project is planned to start in 2006 with the upgrader commencing operation in 2007.

For further information contact:

FORWARD LOOKING STATEMENTS

Certain statements in this report constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as "plan", "expect", "estimate", "budget", "outlook" or other similar
words.

The forward-looking statements are subject to known and unknown risks and uncertainties and other factors which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such statements. Such factors include, among others: market prices for oil and gas and chemicals products; the ability to explore, develop, produce and transport crude oil and natural gas to markets; the results of exploration and development drilling and related activities; economic conditions in the countries and regions where Nexen or OPTI carry on business; actions by governmental authorities including increases in taxes, changes in environmental and other laws and regulations; renegotiations of contracts; and political uncertainty, including actions by insurgent or other armed groups or other conflict. The impact of any one factor on a particular forward-looking statement is not determinable with certainty as such factors are interdependent upon other factors, and management's course of action would depend on its assessment of the future considering all information then available. Any statements as to possible commerciality, development plans, capacity expansions, drilling of new wells, ultimate recoverability of reserves, future production rates, cash flows and changes in any of the foregoing are forwardlooking statements.

Although we believe that the expectations conveyed by the forward-looking statements are reasonable based on information available to us on the date such forward-looking statements were made, no assurances can be given as to future results, levels of activity and achievements. Readers should also refer to Nexen's Annual Report on Form 10-K for a discussion of the factors.