Item 3.     Legal Proceedings.

On November 30, 2004, the New York State Department of Environmental Conservation (“NYSDEC”) proposed a statewide settlement of petroleum bulk storage compliance issues at all active petroleum bulk storage sites in New York, and any investigation and remediation required at those sites. The proposal includes requirements that the company perform a compliance audit at each site, undertake a $1.5 million environmental benefit project, pay a penalty of $5 million, and pay oversight costs. ExxonMobil is evaluating the offer and will respond to the NYSDEC. No formal action has been taken by the NYSDEC regarding these matters.

Refer to the relevant portions of note 16 beginning on page 70 of the Financial Section of this report for additional information on legal proceedings.