Nexen Produces First Synthetic Crude Oil at Long Lake

Nexen Inc. is pleased to announce first production of Premium Sweet Crude (PSC(TM)) from the upgrader at Long Lake. The main process units in the upgrader have been successfully started up and are operating. Syngas from the upgrader is being used in SAGD operations and this will significantly reduce the need for purchased natural gas. The upgrader is expected to ramp-up to full design rates of approximately 60,000 bbls/d of PSC(TM) over the next 12 to 18 months. As the upgrader ramps up to full capacity, we expect that there will be periods of downtime as we work through the early stages of production. This periodic downtime is normal and consistent with industry experience.

"The production of first synthetic crude oil at Long Lake is a significant milestone and proves that the technology works," said Marvin Romanow, Nexen's President and Chief Executive Officer. "I would like to thank the thousands of people - our employees, our partner OPTI Canada Inc., our contractors, suppliers and government agencies - that have all contributed to this remarkable achievement. This is a world-class facility that we expect will produce premium synthetic crude at a significant cost advantage for the next 40 years."

Nexen Inc. is an independent, Canadian-based global energy company, listed on the Toronto and New York stock exchanges under the symbol NXY. We are uniquely positioned for growth in the North Sea, Western Canada (including the Athabasca oil sands of Alberta and unconventional gas resource plays such as coalbed methane and shale gas), deep-water Gulf of Mexico, offshore West Africa and the Middle East. We add value for shareholders through successful full-cycle oil and gas exploration and development and leadership in ethics, integrity, governance and environmental protection.

Forward-Looking Statements

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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; our ability to explore, develop, produce, upgrade and transport crude oil and natural gas to markets; the results of exploration and development drilling and related activities; the risks inherent in operating in harsh climates; the risks inherent in operating significant facilities which process hazardous and potentially explosive materials under high temperature and pressure; volatility in energy trading markets; foreign-currency exchange rates; economic conditions in the countries and regions in which we carry on business including the increasing costs of materials and labour and the ability of suppliers to meet delivery schedules and cost estimates; governmental actions including changes to taxes or royalties, changes in environmental and other laws and regulations; renegotiations of contracts; results of litigation, arbitration or regulatory proceedings; and political uncertainty, including actions by terrorists, insurgent or other groups, or other armed conflict, including conflict between states. The impact of any one risk, uncertainty or factor on a particular forward-looking statement is not determinable with certainty as these factors are interdependent, and management's future course of action would depend on our assessment of all information at that time.