ConocoPhillips, Venezuela unable to reach agreement

ConocoPhillips and the Venezuelan government have been unable to reach agreement regarding ConocoPhillips' migration to an Empresa Mixta structure mandated by Venezuela decree law 5.200.

Offshore staff

HOUSTON -- ConocoPhillips and the Venezuelan government have been unable to reach agreement regarding ConocoPhillips' migration to an Empresa Mixta structure mandated by Venezuela decree law 5.200.

Pursuant to the decree, ConocoPhillips says, Petróleos de Venezuela S.A. or its affiliates will directly assume activities associated with ConocoPhillips' interests in the Petrozuata and Hamaca heavy-oil ventures and the offshore Corocoro development project.

While negotiations continue between ConocoPhillips and Venezuelan authorities concerning compensation for the company's interests, the company expects to record a complete impairment of its entire interest in its oil projects in Venezuela, totaling $4.5 billion in its 2Q financial results. Although the company is hopeful that the negotiations will be successful, it has preserved all legal rights including international arbitration.

Prior to the expropriation of its interests, ConocoPhillips held a 50.1% interest in Petrozuata, a 40% interest in Hamaca, and a 32.5% interest in Corocoro.

6/28/2007

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