The Mackenzie Delta Producers Group and the Mackenzie Valley Aboriginal Pipeline Corporation (MVAPC) have announced their intent to begin preparing regulatory applications needed to develop onshore natural gas resources in the Mackenzie Delta, including a Mackenzie Valley Pipeline.

Since initiating a feasibility study into Mackenzie Delta gas development
in early 2000, the Producers Group -- Imperial Oil Resources, Conoco
Canada, Shell Canada Limited and ExxonMobil Canada -- has consulted with
more than 100 parties, including Northern communities, governments and oil
and gas companies. During the project definition phase, the public will
continue to be consulted to ensure their input is represented and
considered.

In October 2001, the Producers Group and the MVAPC, representing the
Aboriginal peoples of the Northwest Territories, signed a memorandum of
understanding to guide future work on economic and timely development of a
Mackenzie Valley Pipeline. The memorandum was signed in the Aboriginal
community of N'Dilo, near Yellowknife, N.W.T. The pipeline would be
anchored by nearly six trillion cubic feet of natural gas at the Taglu,
Parsons Lake and Niglintgak gas fields, and would be accessible to other
existing and future natural gas discoveries in the Mackenzie Delta and
Mackenzie Valley regions.

Today's announcement signals the producers' intent to move from the
feasibility study phase to the project definition phase. This phase
includes technical, environmental, consultation and commercial work
required to prepare, file and support regulatory applications for field,
gas-gathering and pipeline facilities. Work will also begin to develop
benefit plans, access agreements and other arrangements in support of the
applications.

"Announcing our intent to proceed with the project definition phase
demonstrates the confidence of the Producers Group and the MVAPC that
development of Mackenzie Delta gas, including a Mackenzie Valley Pipeline,
is potentially commercial and can be beneficial to the people of the North
and to all resource developers," said K.C. Williams, senior
vice-president, Imperial Oil, on behalf of the Producers Group. "The
historic memorandum of understanding signed in October has the support of
Aboriginal leaders who represent about three-quarters of the Aboriginal
people of the Northwest Territories. We remain committed to continuing the
dialogue with all Aboriginal leaders and communities, independent of
whether they have ratified the memorandum of understanding. While we are
optimistic, the ultimate decision to build the pipeline can only be made
after obtaining regulatory approval, and will be a function of many
factors, including natural gas markets, construction costs, and regulatory
and fiscal certainty."

Nellie Cournoyea, chair of the MVAPC, said, "The decision by the MVAPC and
the Producers Group to proceed with the preparation of regulatory
applications is a significant step toward a Mackenzie Valley Pipeline. The
business partnership negotiated with the producers allows all Aboriginal
people of the North to participate in and benefit from this opportunity,
including parties who have not yet indicated their support."

"We are very pleased with the progress made over the past year," added
Henry Sykes, president of Conoco Canada. "Moving to the project definition
phase is a significant milestone in the development of this opportunity.
This is pioneering work and we're creating new ways of doing business
including better ways of partnering with northern communities. We can now
start preparing the regulatory applications needed for the development of
the Parsons Lake gas discovery, which we operate on behalf of ourselves
and ExxonMobil Canada."

Ray Woods, senior operating officer, Resources, Shell Canada Limited,
said: "We are one step closer today to developing Mackenzie Delta natural
gas resources, including Shell's Niglintgak discovery. We would like to
recognize the efforts of the MVAPC in helping to build the broad-based
support that was key to taking the decision to proceed with the project
definition phase."

Expenditures required to complete the project definition phase, which
includes the preparation and regulatory review of the applications, are
estimated at about $200 million to $250 million (Cdn.). Timing is
dependent on a number of factors, including the regulatory review process.
As part of regulatory application preparation, an environmental impact
assessment including plans for environmental protection and subsequent
monitoring will be prepared.

As the holder of the natural gas rights at Taglu, the largest of the three
discovered Mackenzie Delta gas fields, Imperial is the designated operator
of the gas gathering and pipeline systems.