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Letter from General Manager, TOTCO/COTCO S.A.

Johnny Malec, GM TOTCO S.A. / COTCO S.A.

Johnny Malec General Manager, Tchad Oil Transportation Company S. A., Cameroon Oil Transportation Company S. A.

I am very pleased to report that 2016 was a year of significant achievements as COTCO and TOTCO continued their successful adaptation to operating in a multiple-shipper environment.

First, and most important, was our safety performance. With the pipeline companies’ over 1,200 employees and contractors recording hundreds of thousands of hours worked, sometimes involving highly demanding maintenance activities, the Export Transportation System (ETS) has not had a reportable injury in over two and a half years except for a guard receiving a minor bite. This performance is not due to luck; we’ve worked very hard to embed safety as the top priority of all aspects of our operations.

We believe every member of our workforce, now made up almost completely of Cameroonian and Chadian nationals, deserves to work in an environment where “Nobody Gets Hurt.”

Second, the ETS achieved an all-time best reliability record in 2016, with the pipeline experiencing only one unplanned shutdown, an incident that lasted just 45 minutes.

Third, our efforts to become even more cost efficient allowed both companies to reduce the transportation cost per barrel by 8% vs. 2015, even though the volumes transported were 8% lower in 2016.

Our ability to achieve these results was due to the strong commitment of the TOTCO and COTCO employees to three core values that guide all our operations – safety, reliability and efficiency. One of the ways this mindset was instilled in both organizations was to reinforce that cost, while important, should not be the first consideration when planning an activity; doing the job safely and reliably almost always proves to be the most cost effective approach. This does not mean we are not relentless in seeking cost efficiencies. In 2016 our managers began using a set of cost management tools to ensure our spending is precisely optimized to what is strictly needed to achieve the high level of performance expected by our customers.

The Operations and Production section describes some of the activities undertaken in 2016 to maintain the ETS and meet the technical challenges created by the need to transport through the pipeline different blends of crude from three different shippers.

COTCO and TOTCO remain committed to addressing community needs along the pipeline corridor. Over the last few years, our focus has increasingly been on deepening our relationships with the communities and collaborating on projects that are more sustainable. For example, if we are working with a village to build or upgrade a school, we make sure that in addition to providing tools and materials, we build training into the project so the community acquires the skills to maintain the structure in the future. Our goal going forward is for all community support programs to include a sustainability plan.

Another important way COTCO is helping people is through our multi-year collaboration with the Cameroon Ministry of Health (MOH) in fighting diseases and improving healthcare, often with funding from the ExxonMobil Foundation. This collaboration in 2016 led to many achievements in the areas of malaria and other communicable disease prevention, first aid training and emergency preparedness, including one not anticipated at the beginning of the year. According to the MOH, a new joint effort, which involves reducing mortality from snakebites in northern Cameroon including areas near the pipeline, saved 59 lives in the last eight-months of 2016. This particular collaboration, which is expected to save many more lives in the future, is described in more detail in the Health and Safety section.

Looking to the future, I am excited about the energy potential of the region and what it means for COTCO and TOTCO. Our highly experienced and skilled team has been working hard to make sure that we continue to fulfill our duty to our existing producers to provide a safe, reliable and cost effective transportation solution for multiple types of crude. And with the possibility of increased production from existing customers and potential new producers in Chad and Niger, we believe these efforts described in this report have positioned us to be extremely competitive to transport the region’s oil to world markets for the foreseeable future.

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