MARSH SURVEY:  NATIONAL OIL COMPANIES FACE RISKIER WORLD BUT ARE NOT WELL PREPARED

New York, August 7, 2008 — Limited oil and gas resources, the recruitment and retention of a qualified workforce, and energy price volatility are among the most critical risk issues currently facing the world's national oil companies (NOCs), according to a new report published by Marsh, the world’s leading insurance broker and risk advisor. The report also found a gap between the importance of these risks and how well they are managed.

The findings, detailed in the Marsh Oil and Gas Risk Report: 2008, include the results of a survey of NOCs conducted during the Marsh National Oil Companies' conference in Dubai earlier this year. More than 400 delegates were asked to rate the relevance of risks identified by the World Economic Forum and how effectively they felt they were managed by their firms.

The participants ranked the top five risks, in order, as:

• Availability of oil and gas resources
• Recruitment and retention of a qualified workforce
• Energy price volatility
• Environmental impact of operations
• Political/regulatory risk issues

The survey found the overall level of risk facing the industry remains high. Marsh's NOC Risk Index score rose from 4.49 out of a possible 6 in 2007 to 4.51 in 2008.  By contrast, the Risk Management Effectiveness Index score was 3.8. On the topics, availability of oil and gas resources as a risk issue was rated 5.3 out of a possible 6. It was also the top-ranked risk in 2007 but with a rating of 4.9.

Jim Pierce, Marsh's Global Energy Practice Leader, said: "It is no surprise that our survey has found that National Oil Companies are facing a riskier business environment. However, of more concern is the gap between the importance of the risk and how well it is managed. As the custodians of 90% of the world’s oil reserves, it is vital that these companies develop strategies that deal effectively with most important risks facing their business.

"While the relationship between the importance of the risks and management's effectiveness in tackling them has remained relatively stable between 2007 and 2008, this gap is increasing in some instances, most notably among those risks identified as the most critical."

As well as the NOC survey results the report includes articles from the following leading industry commentators:

• Dr Erol Hakanoglu, Lehman Brothers — "Enterprise Risk Management"
• Matthew R. Simmons, Simmons & Company International — "National oil companies and declining production risk"
• Dr. Mohammed Benayoune, The Achievement Centre, Middle East — "The Middle East's talent management issue and what to do about it"
• Adrian Slywotzky and Bob Orr, Oliver Wyman — "How vulnerable is the value in energy industry business models?"
• Eddie McLaughlin, Michelle Jakes and James Maxwell, Marsh — "Key risks for national oil companies"
• Jonathan Groves, Marsh — "National oil companies and captive insurance companies"

The report is available here.

Marsh has 26,000 employees and provides advice and transactional capabilities to clients in over 100 countries. Marsh is a unit of Marsh & McLennan Companies (MMC), a global professional services firm with more than 55,000 employees and annual revenue exceeding $11 billion. MMC also is the parent company of Guy Carpenter, the risk and reinsurance specialist; Mercer, the provider of HR and related financial advice and services; Oliver Wyman, the management consultancy; and Kroll, the risk consulting firm.  MMC's stock (ticker symbol: MMC) is listed on the New York, Chicago and London stock exchanges.  MMC's Web Site is www.mmc.com.

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