----

----

**FORM        40 - F**

**PETRO-CANADA**

| **Canada**                                                                                                         | **1311,                  1321, 1382, 5541**                                                                                           | **Not                  Applicable**                                                                     |
|--------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------|
| (Province                  or otherjurisdiction                  ofincorporation                  or organization) | (Primary                  standard industrial classification                  code number, if                  applicable)            | (I.R.S.                  employeridentification                  number,if                  applicable) |
|                                                                                                               |                                                                                                                                  |                                                                                                    |
|                                                                                                               | 150                  - 6th Avenue S.W.Calgary,                  AlbertaCanada                  T2P 3E3(403)                  296-8000 |                                                                                                    |
| (Address                  and telephone number of registrant’s principal                  executive office)  |

**CT        Corporation System**

**111        Eight Avenue - CT**

**New        York, New York 10011**

**(212)        894-8940**

**Common        Shares****New York Stock Exchange**

**None**

**5%        Senior Notes due        2014**

**9        1/4% Debentures Due        2021**

**7        **
**7/8**
**% Debentures Due 2026**

**7%        Debentures Due        2028**

**4%        Senior Notes Due        2013**

**5.35%        Senior Notes Due        2033**

**5.95%        Senior Notes Due        2035**

**CAUTIONARY        NOTICE REGARDING FORWARD LOOKING INFORMATION**

**ANNUAL            **
**INFORMATION FORM 2005**

**LYNE            RICARD, Engineering Manager, Montreal Refinery, Downstream**

*“I            like working at Petro-Canada because of the dynamic and competent people            who are            the heart of this refinery. I am confident in Petro-Canada’s future because the            Company has real values that do not fade. I watch the Olympics with my            kids and            they’re proud that I work for a company that supports the            athletes!”*

**PETRO-CANADA            MARCH 14, 2006**

----

**TABLE          OF CONTENTS**

|  Conversion                      Factors                                                                                                           |  1      |
|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------------|
|  Non-Generally                      Accepted Accounting Principles Measures                                                                        |  1      |
|  Legal                      Notice - Forward-Looking Information                                                                                   |  1      |
|  **Corporate                    Structure**                                                                                                        |  **2**  |
|  Incorporation                      of Petro-Canada                                                                                                |  2      |
|  Intercorporate                      Relationships                                                                                                 |  3      |
|  Business                      of Petro-Canada                                                                                                     |  3      |
| **General                    Development of the Business**                                                                                              |  **5**  |
|  Three-Year                      History                                                                                                           |  5      |
|  **Description                    of the Business**                                                                                                |  **7**  |
|  Business                      Environment                                                                                                         |  7      |
|  Risk                      Management                                                                                                              |  8      |
|  Upstream                                                                                                                                          |  13     |
|  North                      American Natural Gas                                                                                                   |  13     |
|  East                      Coast Oil                                                                                                               |  18     |
|  Oil                      Sands                                                                                                                    |  21     |
|  International                                                                                                                                     |  25     |
|  Upstream                      Production and Prices                                                                                               |  29     |
|  Reserves                                                                                                                                          |  37     |
|  Downstream                                                                                                                                        |  49     |
|  Research                      and Development                                                                                                     |  55     |
|  Human                      Resources                                                                                                              |  55     |
|  Social                      and Environmental Policies                                                                                            |  55     |
|  Environmental                      Expenditures                                                                                                   |  57     |
|  **Select                      Financial Data**                                                                                                    |  **58** |
|  Capital                      Expenditures on Property, Plant and Equipment and                      Exploration                                   |  60     |
|  Dividends                                                                                                                                         |  61     |
|  **Description                    of Capital Structure**                                                                                           |  **62** |
|  General                      Description of Capital Structure                                                                                     |  62     |
|  Constraints                                                                                                                                       |  62     |
|  Credit                      Ratings                                                                                                               |  63     |
|  **Market                    for Securities**                                                                                                      |  **64** |
|  Trading                      Price and Volumes                                                                                                    |  64     |
|  Prior                      Sales                                                                                                                  |  65     |
|  **Directors                    and Officers**                                                                                                     | ** 66** |
|  Directors                                                                                                                                    |  66     |
|  Additional                      Disclosure Relating to Directors                                                                                  |  69     |
|  Share                      Ownership                                                                                                              |  71     |
|  Corporate                      Governance                                                                                                         |  71     |
|  Audit                      Committee Disclosure                                                                                                   |  73     |
|  **Interest                    of Management and Others in Material Transactions**                                                                 |  **73** |
| ** Transfer                    Agents and Registrars**                                                                                             | ** 74** |
| ** Material                    Contracts**                                                                                                         | ** 74** |
| ** Interest                    of Experts**                                                                                                        | ** 74** |
| ** Additional                    Information**                                                                                                     | ** 74** |
| ** Schedule                    A - Report on Reserves Data by Senior Officer Responsible for                    Reserves                    Data** | ** 75** |
| ** Schedule                    B - Report of Management and Directors on Reserves Data and Other                    Information**                  | ** 77** |
| ** Schedule                    C - Audit, Finance and Risk Committee**                                                                             | ** 79** |

----

**Conversion          Factors**

| 1                    cubic metre (liquids)     | = | 6.29                    barrels         |
|------------------------------------------------|---|-----------------------------------------|
| 1                    cubic metre (natural gas) | = | 35.30                    cubic feet     |
| 1                    litre                     | = | 0.22                    imperial gallon |
| 1                    square kilometre          | = | 247.10                    acres         |
| 1                    hectare                   | = | 2.47                    acres           |
| 1                    cubic metre               | = | 1,000                    litres         |

**Non-Generally          Accepted Accounting Principles Measures**

**Legal          Notice - Forward-Looking Information**

*This            AIF contains forward-looking statements. Such statements are generally            identifiable by the terminology used, such as “plan,” “anticipate,” “intend,”“expect,” “estimate,” “budget” or other similar wording. Forward-looking            statements include, but are not limited to, references to business strategy            and            goals, future capital and other expenditures, drilling plans, construction            activities, refinery turnarounds, the submission of development plans,            seismic            activity, refining margins, oil and gas production levels and the sources            of            growth thereof, results of exploration activities and dates by which            certain            areas may be developed or may come on-stream, retail throughputs, pre-production            and operating costs, reserves and resources estimates, reserves            life-of-field-estimates, natural gas export capacity and environmental            matters.            By their very nature, these forward-looking statements require Petro-Canada            to            make assumptions that may not materialize or that may not be accurate.            These            forward-looking statements are subject to known and unknown risks and            uncertainties, and other factors which may cause actual results, levels            of            activity and achievements to differ materially from those expressed or            implied            by such statements. Such factors include, but are not limited to: imprecision            of            reserves estimates of recoverable quantities of oil, natural gas and            liquids            from resource plays and other sources not currently classified as reserves;            general economic, market and business conditions; industry capacity;            competitive            action by other companies; fluctuations in oil and gas prices; refining            and            marketing margins; the ability to produce and transport crude oil and            natural            gas to markets; the effects of weather and climate conditions; the results            of            exploration and development drilling and related activities; fluctuation            in            interest rates and foreign currency exchange rates; the ability of suppliers            to            meet commitments; actions by governmental authorities, including increases            in            taxes; decisions or approvals of administrative tribunals; changes in            environmental and other regulations; risks attendant with oil and gas            operations, both domestic and international; international political            events;*
*expected            rates of return;*
* *
*and            other factors, many of which are beyond the control of Petro-Canada.            These            factors are discussed in greater detail in filings made by Petro-Canada            with the            Canadian provincial securities commissions and the United States (U.S.)            Securities and Exchange Commission (SEC), and the “Risk Management” section of            this AIF. Specifically, production may be affected by such factors as            exploration success, startup timing and success, facility reliability,            planned            and unplanned gas plant and other facilities shutdowns and turnarounds,            success            of restarts following turnarounds, reservoir performance and natural            decline            rates, water handling and production from coal bed methane wells and            drilling            progress. Capital expenditures may be affected by cost pressures associated            with            new capital projects, including labor and material supply, project management,            drilling rig rates and availability, and seismic costs.*

----

*Statements          concerning oil and gas reserves and resource estimates in this AIF may          be deemed          to be forward-looking statements as they involve the implied assessment          that the          resources described can be profitably produced in the future.*

*Readers          are cautioned that the foregoing list of important factors affecting          forward-looking statements is not exhaustive. Furthermore, the forward-looking          statements contained in this AIF are made as of the date of this AIF, and,          except as required by applicable law, Petro-Canada does not undertake any          obligation to update publicly or to revise any of the included forward-looking          statements, whether as a result of new information, future events or otherwise.          The forward-looking statements contained in this AIF are expressly qualified          by          this cautionary statement.*

*Petro-Canada’s          staff of qualified reserves evaluators generates the reserves estimates          used by          the Company. Our reserves staff and management are not considered independent          of          the Company for purposes of the Canadian provincial securities commissions.          Petro-Canada has obtained an exemption from certain Canadian reserves disclosure          requirements to permit it to make disclosure in accordance with SEC standards          in          order to provide comparability with U.S. and other international issuers.          Therefore, Petro-Canada’s proved reserves data and other oil and gas formal          disclosure is made in accordance with U.S. disclosure requirements and          practices, and may differ from Canadian domestic standards and practices.          Where          the term barrel of oil equivalent (boe) is used in this AIF, it may be          misleading, particularly if used in isolation. A boe conversion ratio of          six          thousand cubic feet (Mcf): one barrel (bbl) is based on an energy equivalency          conversion method primarily applicable at the burner tip and does not represent          a value equivalency at the wellhead. *

*The          SEC permits oil and gas companies, in their filings with the SEC, to disclose          only proved reserves that a company has demonstrated by actual production          or          conclusive formation tests to be economically and legally producible under          existing economic and operating conditions. The use of terms such as “probable,”“possible,” “recoverable,” or “potential” reserves and resources in this AIF          does not meet the guidelines of the SEC for inclusion in documents filed          with          the SEC. *

|  **CORPORATE                    STRUCTURE** |
|--------------------------------------------------|

**Incorporation          of Petro**
**-Canada**

*Canada          Business Corporations Act*

----

**Intercorporate          Relationships**

| **Name**                                           | **Jurisdiction                    of Incorporation** | **Purpose**                                                                                                                                                                              |
|----------------------------------------------------|------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3908968                    Canada Inc.             | Canada                                               | A                    Canadian subsidiary holding Petro-Canada’s International                    interests                                                                         |
| Petro-Canada                    U.K. Holdings Ltd. | United                    Kingdom (U.K.)             | A                    subsidiary of 3908968 Canada Inc. that holds Petro-Canada’s U.K.                    interests                                                                 |
| Petro-Canada                    U.K. Limited       | U.K.                                                 | A                    subsidiary of Petro-Canada’s U.K. Holdings Ltd. through which                    Petro-Canada’s operations are conducted in the                    U.K. |

**Business          of Petro**
**-Canada**

----

**Upstream**

| **North                    American Natural Gas**               |   | **East                    Coast Oil**                                                      |
|-----------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------|
| §  Western                    Canada             |   | §  Hibernia                    (20% Interest)                               |
| -  *Alberta                    Foothills*             |   | §  Terra                    Nova (34% Interest)                             |
| -  *Southeastern                    Alberta*          |   | §  White                    Rose (27.5% Interest)                           |
| -  *West                    Central Alberta*          |   | §  Other                    Significant Discoveries and Exploration Acreage |
| -  *Northeastern                    British Columbia* |
| §  U.S.                    Rockies               |   |                                                                                       |
| §  Mackenzie                    Delta/Corridor   |   |                                                                                       |
| §  Alaska                                        |   |                                                                                       |

| **Oil                    Sands**                                                                                               |   | **International**                                           |
|--------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------|
| §  Syncrude                    (12% Interest)                                                                   |   | §  Northwest                    Europe       |
| §  MacKay                    River (100% Interest)                                                              |   | §  North                    Africa/Near East |
| §  Fort                    Hills (55% Interest)                                                                 |   | §  Northern                    Latin America |
| §  Other                    *In                    Situ*                    Oil                    Sands Leases |   |                                                        |

**Downstream**

| **Refining                    and Supply**             |   | **Sales                    and Marketing**                |   | **Lubricants**                                                     |
|--------------------------------------------------------|--------|-----------------------------------------------------------|--------|--------------------------------------------------------------------|
| §  Montreal                    Refinery |   | §  Retail                    Operations    |   | §  Mississauga                    Lubricants Centre |
| §  Edmonton                    Refinery |   | §  Wholesale                    Operations |   |                                                               |

----

**GENERAL          DEVELOPMENT OF THE BUSINESS**

**Three-Year          History**

**2005**

| §   | achieved                    record operating earnings adjusted for unusual items of $2.4                    billion and                    cash flow of $4 billion; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | met                    production targets and replaced 195% of proved plus probable                    reserves over                    five years; and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | strengthened                    its portfolio with the Fort Hills acquisition, first oil at White                    Rose and                    an agreement to sell mature Syrian                    assets. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**2004**

**2003**

----

**DESCRIPTION          OF THE BUSINESS**

**Business          Environment**

**Business          Environment in 2005**

**Competitive          Conditions**

----

**Risk          Management**

**PETRO**
**-CANADA’S          RISK PROFILE**

**BUSINESS          RISKS**

***Exploration***

***Reserves          Estimates***

| 1 | Further                    detail regarding the Audit, Finance and Risk Committee can be                    found on                    page 73 of this AIF and a copy of its Charter is attached as                    Schedule                    C. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Proved                    reserves replacement ratio is calculated by dividing the year-over-year                    net change in proved reserves, before deducting production, by                    the annual                    production over thesame                    time period. The reserves replacement ratio is a general indicator                    of the                    Company’s reserves growth. It is only one of a number of metrics which                    can                    be used to analysea                    company’s upstream business. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

***Project          Execution***

***Non-Operated          Interests***

***Environmental          Regulations***

***Emission          Of Greenhouse Gases***

----

***Government          Regulations***

***Counterparties***

**O**
**PERATIONAL          RISKS**

**F**
**OREIGN          R**
**ISKS**

----

**M**
**ARKET          RISKS**

***Commodity          Prices***

***Foreign          Exchange***

***Interest          Rates***

*Derivative          Instruments*

----

----

**Upstream**

**North          American Natural Gas**

***Business          Summary and Strategy***

| §   | transitioning                    further into unconventional gas                    plays; |
|--------------------|--------------------------------------------------------------------------------------------|

| §   | optimizing                    core properties in Western Canada and developing coal bed methane                    and                    tight gas in the U.S. Rockies; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | stepping                    out of traditional operating areas, with an increased focus on                    exploration; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

| §   | developing                    LNG import capacity at Gros-Cacouna, Quebec; and |
|--------------------|--------------------------------------------------------------------------------|

| §   | building                    the northern resource base for long-term                    growth. |
|--------------------|-------------------------------------------------------------------------------------------------|

***Western          Canada and U.S. Rockies***

----

**PETRO-CANADA          OWNERSHIP AND CAPACITY**

| Petro-Canada                    Operated Plants | Working                    Interest Ownership*(%)* | Gross                    Licensed Capacity*(MMcf/d)* | Net                    Licensed Capacity*(MMcf/d)* |
|-------------------------------------------------|----------------------------------------------------|------------------------------------------------------|----------------------------------------------------|
|                                            |
| Brazeau                    Sweet                | 47                                                 | 78                                                   | 37                                                 |
| Brazeau                    Sour                 | 30                                                 | 107                                                  | 32                                                 |
| **Total                    Brazeau**            |                                               | **185**                                              | **69**                                             |
|                                            |                                               |                                                 |                                               |
| Hanlan                    Sweet                 | 41                                                 | 44                                                   | 18                                                 |
| Hanlan                    Sour                  | 46                                                 | 380                                                  | 175                                                |
| **Total                    Hanlan**             |                                               | **424**                                              | **193**                                            |
|                                            |                                               |                                                 |                                               |
| Wilson                    Creek Sweet           | 52                                                 | 12                                                   | 7                                                  |
| Wilson                    Creek Sour            | 52                                                 | 22                                                   | 11                                                 |
| **Total                    Wilson Creek**       |                                               | **34**                                               | **18**                                             |
|                                            |                                               |                                                 |                                               |
| Boundary                    Lake Sweet          | 100                                                | 20                                                   | 20                                                 |
| Boundary                    Lake Sour           | 50                                                 | 66                                                   | 33                                                 |
| Parkland                    1                   | 44                                                 | 18                                                   | 8                                                  |
| Parkland                    2                   | 35                                                 | 12                                                   | 4                                                  |
| Wildcat                    Hills                | 66                                                 | 124                                                  | 82                                                 |
| Bearberry                                       | 100                                                | 94                                                   | 94                                                 |
| Ferrier                                         | 99                                                 | 119                                                  | 118                                                |
| Gilby                    East                   | 100                                                | 52                                                   | 52                                                 |
| **Total                    2005**               |                                               | **1,148**                                            | **691**                                            |

----

**NORTH          AMERICAN**
**          NATURAL GAS SALES BY MARKET**

|                                                                | **2005**       | 2004                                  |
|---------------------------------------------------------------------|----------------|---------------------------------------|
|                                                                | ***(MMcf/d)*** | ***(%                    of Total)*** | *(MMcf/d)* | *(%                    of Total)* |
| **Sales                    to aggregators**                         |           |                                  |   |   |
| Canwest                    Gas Supply Inc.                     | **14**         | **2**                                 | 16 | 2 |
| ProGas                    Limited                                   | **38**         | **5**                                 | 35 | 4 |
| Cargill                    Incorporated                             | **20**         | **2**                                 | 17 | 2 |
| Others                                                              | **3**          | **-**                                 | 6 | 1 |
| **Total                    sales to aggregators**                   | **75**         | **9**                                 | 74 | 9 |
| **Direct                    sales**                                 |           |                                  |   |   |
| Alberta                                                             | **286**        | **35**                                | 368 | 44 |
| U.S. Midwest                                                   | **160**        | **20**                                | 159 | 18 |
| British                    Columbia and U.S. Pacific Northwest | **112**        | **14**                                | 106 | 12 |
| California                                                          | **45**         | **6**                                 | 45 | 5 |
| U.S.                    Rockies                                     | **41**         | **5**                                 | 19 | 2 |
| Eastern                    Canada                                   | **12**         | **1**                                 | 12 | 1 |
| Saskatchewan                                                        | **7**          | **1**                                 | 8 | 1 |
| **Total                    before internal sales**                  | **663**        | **82**                                | 717 | 83 |
| Sales                    within Petro-Canada                        | **75**         | **9**                                 | 72 | 8 |
| **Total                    direct sales**                           | **738**        | **91**                                | 789 | 91 |
| **Total                    sales**                                  | **813**        | **100**                               | 863 | 100 |

----

**Royalty          Regime**

***Mackenzie          Delta/Corridor, Northwest Territories***

***Alaska***

***LNG***

** **

----

***L****ink          to Petro-Canada’s Corporate and Strategic          Priorities***

|                                                                                                              | **2005                    PROGRESS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | **2006                    GOALS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|-------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **DELIVERING                    PROFITABLE GROWTH WITH A FOCUS ON OPERATED, LONG-LIFE                    ASSETS** | §  drilled                    100 gross wells in Western Canada and 290 wells in the Western                    Canada                    Medicine Hat region1;§  drilled                    310 wells, added 37,000 net acres of land and obtained 407 permits                    for new                    coal bed methane wells in the U.S. Rockies;§  filed                    regulatory application for the LNG facility at Gros-Cacouna;                    and§  increased                    joint land position with partner in Alaska to 2.5 million acres and                    acquired 410,000 acres in the Mackenzie Corridor.                                                                                | §  create                    a stronger exploration focus;§  expand                    growth of unconventional gas plays to about 25% of                    production;§  optimize                    core asset concentric opportunities; and§  advance                    exploration prospects in the Mackenzie Delta/Corridor and                    Alaska.                                                                                                                                                                                                                    |
| **DRIVING                    FOR FIRST QUARTILE2** **OPERATION OF OUR                    ASSETS**            | §  achieved                    better than 98% reliability3 at                    Western Canada facilities; and§  conducted                    major turnarounds at Wildcat Hills, Wilson Creek and Gilby gas                    plants,                    with no lost-time incidents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | §  achieve                    reliability rate approaching 99%;§  conduct                    major turnaround of the Hanlan gas plant; and§  continue                    to leverage costs through strategic alliances and preferred                    suppliers.                                                                                                                                                                                                                                                                                                                                  |
| **CONTINUING                    TO WORK AT BEING A RESPONSIBLE COMPANY**                                          | §  saw                    44% increase in total recordable injury frequency compared to                    2004. While                    contractor injury frequency improved, an upswing in employee                    injuries had                    a negative effect;§  continued                    to reduce injury severity;§  improved                    employee and contractor safety culture through initial phase                    of                     behaviour-based                    safety programs;§  proactively                    remediated and reclaimed old sites; and§  saw                    slight increase in regulatory exceedances compared to                    2004. | §  reduce                    total recordable injury frequency and regulatory exceedances;§  continue                    safety culture improvements by rolling out the next phase of                     behaviour-based                    safety for employees and contractors;§  drive                    for continuous improvement in contractor safety performance;§  develop                    and implement stakeholder relations strategy; and§  proactively                    remediate and reclaim old sites on a risked                    basis. |

----

**East          Coast Oil**

***Business          Summary and Strategy***

| §   | delivering                    top quartile safety and operating                    performance; |
|--------------------|-------------------------------------------------------------------------------------------------|

| §   | sustaining                    profitable production through reservoir extensions and add-ons;                    and |
|--------------------|----------------------------------------------------------------------------------------------------------------------|

| §   | pursuing                    high potential development                    projects. |
|--------------------|-------------------------------------------------------------------------------------|

***Hibernia***

----

***Terra          Nova***

***White          Rose***

***Offshore          Oil Royalty Regime***

----

***Other          Offshore Exploration and Development***

***Link          to Petro-Canada’s Corporate and Strategic          Priorities***

|                                                                                                              | **2005                    PROGRESS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | **2006                    GOALS**                                                                                                                                                                                                                                                                                                                                                                                                                            |
|-------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **DELIVERING                    PROFITABLE GROWTH WITH A FOCUS ON OPERATED, LONG-LIFE                    ASSETS** | §  achieved                    first oil production from the White Rose development;§  signed                    joint operating agreement for Hebron; and§  received                    regulatory approval for Far East development at Terra                    Nova.                                                                                                                                                                                                                                                                                                        | §  secure                    Hebron project provincial benefits agreement and begin front-end                    engineering and design;§  achieve                    first production from the Far East development at Terra Nova;§  advance                    in-field Hibernia growth prospects; and§  delineate                    West White Rose prospect.                                |
| **DRIVING                    FOR FIRST QUARTILE OPERATION OF OUR ASSETS**                                         | §  improved                    Terra Nova reliability to 90%; and§  maintained                    relatively flat operating and overhead costs excluding insurance                    premium                    surcharges and startup costs for White Rose.                                                                                                                                                                                                                                                                                                                                 | §  conduct                    a 70- to 90-day turnaround scheduled at Terra Nova for regulatory                    compliance and first quartile reliability initiatives; and§  achieve                    White Rose plateau production.                                                                                                                                                                                      |
| **CONTINUING                    TO WORK AT BEING A RESPONSIBLE COMPANY**                                          | §  saw                    6%                    increase in total recordable injury frequency compared to 2004;                    §  worked                    with regulators to address the outcomes of the 2004 oily water                    discharge;§  conducted                    Terra Nova turnaround ahead of schedule and with improved safety                    record;                    and§  improved                    the produced water system resulting in zero regulatory exceedances                    for                    2005. | §  reduce                    total recordable injury frequency;§  apply                    lessons learned from oily water discharge to prevent future incidents;                    §  maintain                    zero regulatory exceedances; and§  ensure                    major TLM focus during the significant Terra Nova turnaround                    and                    startup. |

----

**Oil          Sands**

***Business          Summary and Strategy***

*in          situ*
*in          situ*

***Oil          Sands Mining - Syncrude***

----

***Oil          Sands In Situ - Bitumen***

*in          situ*

*in          situ*

----

**Fort          Hills Acquisition**

***Royalty          Regime***

***Integrated          Oil Sands Development***

----

***Link          to Petro-Canada’s Corporate and Strategic          Priorities***

|                                                                                                              | **2005                    PROGRESS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | **2006                    GOALS**                                                                                                                                                                                                                                                                                                                                    |
|-------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **DELIVERING                    PROFITABLE GROWTH WITH A FOCUS ON OPERATED, LONG-LIFE                    ASSETS** | §  secured                    a position in oil sands mining with Petro-Canada becoming operator                    and                    owning a 55% interest in Fort Hills;§  acquired                    the Dover UTF and oil sands leases adjacent to MacKay River;§  progressed                    construction of the Syncrude Stage III expansion; and§  undertook                    an extensive drilling program at Lewis.                   | §  advance                    Fort Hills and MacKay River expansion development plans;§  start                    up Syncrude Stage III expansion; and§  increase                    MacKay River production to between 27,000 b/d and 30,000 b/d                    by                    year                    end. |
| **DRIVING                    FOR FIRST QUARTILE OPERATION OF OUR ASSETS**                                         | §  decreased                    MacKay River unit operating costs by 22%;§  achieved                    average reliability at MacKay River of 98%, up from 79% in 2004;                    and§  saw                    Syncrude non-fuel unit operating costs increase by 47%.                                                                                                                                                                                         | §  decrease                    MacKay River non-fuel unit operating costs by 15%;§  decrease                    Syncrude non-fuel unit operating costs by 25%; and§  sustain                    MacKay River reliability at 2005 levels or better.                                                                      |
| **CONTINUING                    TO WORK AT BEING A RESPONSIBLE COMPANY**                                          | §  saw                    no change to total recordable injury frequency compared to                    2004;§  on                    behalf of Downstream, completed recycled waterline for reusing                    wastewater                    at the Edmonton refinery; and§  established                    the McLelland Lake Wetland Complex Sustainability Committee to                    assist in                    the management of the patterned fen. | §  maintain                    focus on total recordable injury frequency; and§  ensure                    regulators, First Nations and other key stakeholders affected                    by major                    projects are properly consulted and                    engaged.                                                |

----

**International**

***Business            Summary and Strategy***

| §   | optimize                    and leverage existing assets; |
|--------------------|-----------------------------------------------------------|

| §   | seek                    out new, long-life opportunities;                    and |
|--------------------|----------------------------------------------------------------------------------|

| §   | build                    a balanced exploration program. |
|--------------------|----------------------------------------------------------|

***Northwest          Europe***

----

***Other          Developments***

***North          Africa/Near East***

----

***Northern          Latin America***

----

**Business          Development Opportunities**

***Link          to Petro-Canada’s Corporate and Strategic          Priorities***

|                                                                                                              | **2005                    PROGRESS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | **2006                    GOALS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|-------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **DELIVERING                    PROFITABLE GROWTH WITH A FOCUS ON OPERATED, LONG-LIFE                    ASSETS** | §  advanced                    Buzzard development on schedule and on budget;§  achieved                    first oil at Pict in June 2005;§  progressed                    exploration with two discoveries in the U.K. sector of the North                    Sea and                    the Hejre appraisal; and§  was                    awarded eight blocks in the 23rd U.K. licensing round and five                    Norwegian                    production licences.                                                                                                                                                                 | §  achieve                    first production by year end at Buzzard in the U.K. sector of                    the North                    Sea and at De Ruyter and L5b-C in the Netherlands sector of the                    North Sea;                    §  conduct                    11-well drilling program with balanced risk profile;§  complete                    seismic program in Trinidad and Tobago and refine exploration                    well                    locations; and§  advance                    field development plans for LaCeiba in Venezuela and Saxon in                    the U.K.                    sector of the North Sea. |
| **DRIVING                    FOR FIRST QUARTILE OPERATION OF OUR ASSETS**                                         | §  completed                    Hanze turnaround in nine days versus planned 14 days;§  participated                    in peer benchmarking studies for North Sea producing facilities;                    and§  secured                    lease on new London office building on very favourable                    terms.                                                                                                                                                                                                                                                                                                                                   | §  conduct                    North Sea Triton de-bottlenecking study;§  ensure                    De Ruyter operations readiness;§  increase                    technical and environment, health and safety co-operation in                    Libya;§  improve                    reliability and uptime on the Scott platform; and§  roll                    out International management system.                                                                                                                                                                                                                                                     |
| **CONTINUING                    TO WORK AT BEING A RESPONSIBLE COMPANY**                                          | §  reduced                    total recordable injury frequency by 22% compared to 2004;§  initiated                    program of Zero Harm inspections by management;§  rolled                    out Zero Harm supervisory training for leaders;§  worked                    with community to minimize impact of onshore well in Tunisia;§  developed                    oil spill strategy and coastline mapping for offshore well in                    Tunisia;                    and§  initiated                    plan to protect forest reserve during seismic operations in                    Syria. | §  maintain                    focus on total recordable injury frequency;§  consult                    with communities in Trinidad and Tobago in preparation for exploration                    drilling program;§  reduce                    oil in produced water at Triton; and§  introduce                    Employee Assistance Program for International                    employees.                                                                                                                                                                                                                                                                          |

***Discontinued          Operations***

----

**Upstream          Production and Prices**

**AVERAGE          DAILY PRODUCTION OF CRUDE OIL, NGL,**

**BITUMEN,          SYNTHETIC CRUDE OIL AND NATURAL GAS**

|                                                                                                                                                        | Years                    Ended December 31, |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------|
|                                                                                                                                                        | **2005**                                         | 2004 | 2003 |
|                                                                                                                                                        | **Before                    Royalties**          | **After                    Royalties** | Before                    Royalties | After                    Royalties | Before                    Royalties | After                    Royalties |
| **Crude                    oil and equivalents*****(thousands                    of barrels/day - Mbbl/d)***                                                |                                             |   |   |   |   |   |
| East                    Coast Oil                                                                                                                           | **75.3**                                         | **69.6** | 78.2 | 75.1 | 86.1 | 84.0 |
| Oil                    Sands1                                                                                                                               | **47.0**                                         | **46.5** | 45.2 | 44.8 | 36.1 | 35.7 |
| North                    American Natural Gas                                                                                                               | **14.7**                                         | **11.2** | 15.3 | 11.4 | 16.9 | 12.6 |
| Northwest                    Europe                                                                                                                         | **33.7**                                         | **33.2** | 40.4 | 40.4 | 37.7 | 37.7 |
| North                    Africa/Near East                                                                                                                   | **49.8**                                         | **44.0** | 50.9 | 43.7 | 53.4 | 43.3 |
| Total                    crude oil and NGL                                                                                                                  | **220.5**                                        | **204.5** | 230.0 | 215.4 | 230.2 | 213.3 |
| **Natural                    gas production*****(MMcf/d)***                                                                                                 |                                             |   |   |   |   |   |
| North                    American Natural Gas                                                                                                               | **668**                                          | **512** | 695 | 530 | 693 | 521 |
| Northwest                    Europe                                                                                                                         | **66**                                           | **66** | 85 | 85 | 80 | 80 |
| North                    Africa/Near East                                                                                                                   | **-**                                            | **-** | - | - | - | - |
| Northern                    Latin America                                                                                                                   | **72**                                           | **56** | 72 | 51 | 63 | 63 |
| **Total                    natural gas**                                                                                                                    | **806**                                          | **634** | 852 | 666 | 836 | 664 |
| **Total                    production from continuing operations****2** ***(thousands                    of barrels of oil equivalent/day - Mboe/d)*** | **355**                                          | **310** | 372 | 326 | 370 | 324 |
| **Discontinued                    operations**                                                                                                              |                                             |   |   |   |   |   |
| Crude                    oil and NGL *(Mbbl/d)*                                                                                                             | **65.9**                                         | **20.3** | 75.7 | 23.7 | 89.7 | 34.6 |
| Natural                    gas production *(MMcf/d)*                                                                                                        | **25**                                           | **4** | 21 | 3 | 32 | 6 |
| **Total                    production from discontinued operations****2**** *****(Mboe/d)***                                                           | **70**                                           | **21** | 79 | 24 | 95 | 36 |
| **Total                    production****2**** *****(Mboe/d)***                                                                                        | **425**                                          | **331** | 451 | 350 | 465 | 360 |
| Proved                    oil and NGL reserves3,                    4 *(millions                    of barrels - MMbbls)*                                   | **866**                                          | **733** | 801 | 674 | 796 | 650 |
| Proved                    natural gas reserves *(trillions                    of cubic feet - Tcf)**4*                                                 | **2.2**                                          | **1.7** | 2.5 | 2.0 | 2.5 | 2.0 |

| 2 | Natural                    gas is converted to oil equivalent using six Mcf of gas to one                    boe. |
|---|-------------------------------------------------------------------------------------------------------------------|

| 3 | Includes                    reserves of synthetic crude oil from Syncrude mining operation. |
|---|---------------------------------------------------------------------------------------------|

| 4 | Syria                    proved reserves before royalties of 49 MMboe are included as                    at December                    31, 2005. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------|

----

**AVERAGE          DAILY PRODUCTION OF CRUDE OIL, NGL,**

**BITUMEN,          SYNTHETIC CRUDE OIL AND NATURAL GAS**

**BEFORE          ROYALTIES BY QUARTER**

|                                                                                              |        | **2005****Three                    Months Ended** |           | 2004Three                    Months Ended |        |
|---------------------------------------------------------------------------------------------------|--------|---------------------------------------------------|-----------|-------------------------------------------|--------|
|                                                                                              |   | **Mar. 31**                                  |      | **June 30**                          |   | **Sept. 30** |   | **Dec. 31** |   | Mar. 31 |   | June 30 |   | Sept. 30 |   | Dec. 31 |   |
| **Crude                    oil and equivalents*****(Mbbl/d)***                                    |   |                                              |      |                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| East                    Coast Oil                                                                 |   |                                              | **77.9**  |                                      |   | **77.8** |   |   | **64.7** |   |   | **81.1** |   |   | 87.5 |   |   | 85.4 |   |   | 71.5 |   |   | 68.4 |   |
| Oil                    Sands1                                                                     |   |                                              | **38.3**  |                                      |   | **48.9** |   |   | **52.1** |   |   | **48.3** |   |   | 47.4 |   |   | 40.7 |   |   | 45.4 |   |   | 47.1 |   |
| North                    American Natural Gas                                                     |   |                                              | **16.2**  |                                      |   | **14.5** |   |   | **14.0** |   |   | **14.0** |   |   | 15.1 |   |   | 13.7 |   |   | 15.7 |   |   | 16.9 |   |
| Northwest                    Europe                                                               |   |                                              | **34.3**  |                                      |   | **26.3** |   |   | **38.7** |   |   | **35.6** |   |   | 46.8 |   |   | 43.7 |   |   | 36.6 |   |   | 34.8 |   |
| North                    Africa/Near East                                                         |   |                                              | **48.1**  |                                      |   | **49.7** |   |   | **50.4** |   |   | **50.9** |   |   | 51.7 |   |   | 50.5 |   |   | 51.0 |   |   | 50.7 |   |
| **Total                    crude oil and equivalents**                                            |   |                                              | **214.8** |                                      |   | **217.2** |   |   | **219.9** |   |   | **229.9** |   |   | 248.5 |   |   | 234.0 |   |   | 220.2 |   |   | 217.9 |   |
| **Natural                    gas*****(MMcf/d)***                                                  |   |                                              |      |                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| North                    American Natural Gas                                                     |   |                                              | **702**   |                                      |   | **654** |   |   | **666** |   |   | **649** |   |   | 677 |   |   | 691 |   |   | 690 |   |   | 720 |   |
| Northwest                    Europe                                                               |   |                                              | **78**    |                                      |   | **61** |   |   | **58** |   |   | **65** |   |   | 104 |   |   | 85 |   |   | 79 |   |   | 74 |   |
| North                    Africa/Near East                                                         |   |                                              | **-**     |                                      |   | **-** |   |   | **-** |   |   | **-** |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Northern                    Latin America                                                         |   |                                              | **75**    |                                      |   | **74** |   |   | **72** |   |   | **65** |   |   | 67 |   |   | 71 |   |   | 74 |   |   | 74 |   |
| **Total                    natural gas**                                                          |   |                                              | **855**   |                                      |   | **789** |   |   | **796** |   |   | **779** |   |   | 848 |   |   | 847 |   |   | 843 |   |   | 868 |   |
| **Total                    production from continuing operations****2** ***(Mboe/d)***       |   |                                              | **357**   |                                      |   | **349** |   |   | **353** |   |   | **360** |   |   | 390 |   |   | 375 |   |   | 361 |   |   | 362 |   |
| **Discontinued                    operations**                                                    |   |                                              |      |                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Crude                    oil and NGL *(Mbbl/d)*                                                   |   |                                              | **68.9**  |                                      |   | **67.1** |   |   | **65.2** |   |   | **62.4** |   |   | 83.4 |   |   | 76.6 |   |   | 71.8 |   |   | 70.8 |   |
| Natural                    gas production *(MMcf/d)*                                              |   |                                              | **28**    |                                      |   | **26** |   |   | **25** |   |   | **24** |   |   | 21 |   |   | 21 |   |   | 20 |   |   | 23 |   |
| **Total                    production from discontinued operations****2**** *****(Mboe/d)*** |   |                                              | **74**    |                                      |   | **71** |   |   | **69** |   |   | **66** |   |   | 87 |   |   | 80 |   |   | 75 |   |   | 75 |   |
| **Total                    production*****(Mboe/d)***                                             |   |                                              | **431**   |                                      |   | **420** |   |   | **422** |   |   | **426** |   |   | 477 |   |   | 455 |   |   | 436 |   |   | 437 |   |

| 1 | Includes                    production of synthetic crude oil from Syncrude mining operation. |
|---|-----------------------------------------------------------------------------------------------|

----

**AVERAGE          DAILY PRODUCTION OF CRUDE OIL, NGL,**

**BITUMEN,          SYNTHETIC CRUDE OIL AND NATURAL GAS**

**AFTER          ROYALTIES BY QUARTER**

|                                                                                          |   | **2005****Three                    Months Ended** |      | 2004Three                    Months Ended |       |
|-----------------------------------------------------------------------------------------------|--------|---------------------------------------------------|-----------|-------------------------------------------|------------|
|                                                                                          |   | **Mar. 31**                                  |      | **June 30**                          |       | **Sept. 30** |   | **Dec. 31** |   | Mar. 31 |   | June 30 |   | Sept. 30 |   | Dec. 31 |   |
| **Crude                    oil and equivalents*****(Mbbl/d)***                                |   |                                              |      |                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| East                    Coast Oil                                                             |   |                                              | **74.5**  |                                      |       | **73.6** |   |   | **60.4** |   |   | **70.4** |   |   | 85.0 |   |   | 82.4 |   |   | 68.2 |   |   | 65.2 |   |
| Oil                    Sands1                                                                 |   |                                              | **37.9**  |                                      |       | **48.4** |   |   | **51.6** |   |   | **47.8** |   |   | 47.0 |   |   | 40.3 |   |   | 45.0 |   |   | 46.5 |   |
| North                    American Natural Gas                                                 |   |                                              | **11.9**  |                                      |       | **10.9** |   |   | **10.6** |   |   | **10.8** |   |   | 11.1 |   |   | 10.1 |   |   | 11.6 |   |   | 12.6 |   |
| Northwest                    Europe                                                           |   |                                              | **34.3**  |                                      |       | **25.2** |   |   | **38.0** |   |   | **35.2** |   |   | 46.8 |   |   | 43.7 |   |   | 36.6 |   |   | 34.8 |   |
| North                    Africa/Near East                                                     |   |                                              | **44.6**  |                                      |       | **41.7** |   |   | **42.8** |   |   | **46.8** |   |   | 42.0 |   |   | 41.7 |   |   | 43.9 |   |   | 45.5 |   |
| **Total                    crude oil and equivalents**                                        |   |                                              | **203.2** |                                      |       | **199.8** |   |   | **203.4** |   |   | **211.0** |   |   | 231.9 |   |   | 218.2 |   |   | 205.3 |   |   | 204.6 |   |
| **Natural                    gas*****(MMcf/d)***                                              |   |                                              |           |                                      |       |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| North                    American Natural Gas                                                 |   |                                              | **534**   |                                      |       | **503** |   |   | **527** |   |   | **488** |   |   | 508 |   |   | 531 |   |   | 522 |   |   | 556 |   |
| Northwest                    Europe                                                           |   |                                              | **78**    |                                      |       | **61** |   |   | **58** |   |   | **65** |   |   | 104 |   |   | 85 |   |   | 79 |   |   | 74 |   |
| North                    Africa/Near East                                                     |   |                                              | **-**     | ** **                                | ** ** | **-** | ** ** | ** ** | **-** | ** ** | ** ** | **-** |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Northern                    Latin America                                                     |   |                                              | **75**    |                                      |       | **49** |   |   | **51** |   |   | **53** |   |   | 67 |   |   | 40 |   |   | 49 |   |   | 45 |   |
| **Total                    natural gas**                                                      |   |                                              | **687**   |                                      |       | **613** |   |   | **636** |   |   | **606** |   |   | 679 |   |   | 656 |   |   | 650 |   |   | 675 |   |
| **Total                    production from continuing operations**2 ***(Mboe/d)***       |   |                                              | **318**   |                                      |       | **302** |   |   | **309** |   |   | **312** |   |   | 345 |   |   | 327 |   |   | 313 |   |   | 317 |   |
| **Discontinued                    operations**                                                |   |                                              |           |                                      |       |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Crude                    oil and NGL *(Mbbl/d)*                                               |   |                                              | **22.6**  |                                      |       | **20.0** |   |   | **19.3** |   |   | **19.4** |   |   | 28.6 |   |   | 24.9 |   |   | 21.3 |   |   | 22.0 |   |
| Natural                    gas production *(MMcf/d)*                                          |   |                                              | **5**     |                                      |       | **4** |   |   | **4** |   |   | **4** |   |   | 3 |   |   | 6 |   |   | 2 |   |   | - |   |
| **Total                    production from discontinued operations**2** *****(Mboe/d)*** |   |                                              | **23**    |                                      |       | **21** |   |   | **20** |   |   | **20** |   |   | 29 |   |   | 26 |   |   | 22 |   |   | 22 |   |
| **Total                    production**2** *****(Mboe/d)***                              |   |                                              | **341**   |                                      |       | **323** |   |   | **329** |   |   | **332** |   |   | 374 |   |   | 353 |   |   | 335 |   |   | 339 |   |

| 1 | Includes                    production of synthetic crude oil from Syncrude mining operation. |
|---|-----------------------------------------------------------------------------------------------|

| 2 | Natural                    gas is converted to oil equivalent using six Mcf of gas to one                    boe. |
|---|-------------------------------------------------------------------------------------------------------------------|

----

***Production          Outlook***

**CONSOLIDATED          PRODUCTION**

*(Mboe/d)*

|                                                    | **2005                    Actual** | 2006                    Outlook (+/-)           |
|---------------------------------------------------------|------------------------------------|-------------------------------------------------|
| **North                    American Natural Gas**       |                               |                                            |
| -                    Natural gas                        | **111**                            | 106                                             |
| -                    Liquids                            | **15**                             | 14                                              |
| **East                    Coast Oil**                   | **75**                             | 94                                              |
| **Oil                    Sands**                        |                               |                                            |
| -                    Syncrude                           | **26**                             | 34                                              |
| -                    MacKay River                       | **21**                             | 25                                              |
| **International**                                       |                               |                                            |
| -                    North Africa/Near East1            | **50**                             | 55                                              |
| -                    Northwest Europe                   | **45**                             | 43                                              |
| -                    Northern Latin America             | **12**                             | 12                                              |
| **Total                    from continuing operations** | **355**                            | 365                    -                    390 |

----

**AVERAGE          PRICES FOR CRUDE OIL, NGL,**

**BITUMEN,          SYNTHETIC CRUDE OIL AND NATURAL GAS**

|                                                                                                                                        |   | Years                    Ended December 31, |           |
|---------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|----------------|
| Average                    annual price received                                                                                            |   |                                             |  **2005** |   |  |  2004 |   |  |  2003 |   |
| **Crude                    oil and NGL** *($/bbl)*                                                                                     |   |                                        |           |   |   |   |   |   |   |   |
| East                    Coast Oil                                                                                                           |   | **$**                                       | **63.15**      |   | $ | 48.39 |   | $ | 39.91 |   |
| Oil                    Sands                                                                                                                |   |                                        | **46.90**      |   |   | 39.90 |   |   | 34.97 |   |
| North                    American Natural Gas                                                                                               |   |                                        | **59.47**      |   |   | 47.02 |   |   | 38.21 |   |
| Northwest                    Europe                                                                                                         |   |                                        | **66.13**      |   |   | 50.37 |   |   | 41.41 |   |
| North                    Africa/Near East1                                                                                             |   |                                        | **65.75**      |   |   | 48.26 |   |   | 38.76 |   |
| **Total                    crude oil and NGL from continuing operations**                                                                   |   |                                        | **60.48**      |   |   | 46.95 |   |   | 38.99 |   |
| Discontinued                    operations                                                                                                  |   |                                        | **61.82**      |   |   | 46.70 |   |   | 38.32 |   |
| **Total                    crude oil and NGL**                                                                                              |   | **$**                                       | **60.79**      |   | $ | 46.89 |   | $ | 38.80 |   |
| **North                    America** *($/bbl)*                                                                                         |   |                                        |           |   |   |   |   |   |   |   |
| Average                    crude oil and NGL sale price                                                                                     |   | **$**                                       | **62.55**      |   | $ | 48.17 |   | $ | 39.63 |   |
| Average                    bitumen sale price                                                                                               |   |                                        | **18.53**      |   |   | 18.37 |   |   | 16.69 |   |
| Average                    synthetic crude oil sale price                                                                                   |   |                                        | **70.41**      |   |   | 52.40 |   |   | 42.67 |   |
| **North                    America average crude oil and NGL, bitumen and synthetic crude                    oil                    price** |   | **$**                                       | **57.18**      |   | $ | 45.47 |   | $ | 38.42 |   |
| **International** *($/bbl)*                                                                                                            |   |                                        |           |   |   |   |   |   |   |   |
| Northwest                    Europe - average crude oil and NGL sale price                                                                  |   | **$**                                       | **66.13**      |   | $ | 50.37 |   | $ | 41.41 |   |
| North                    Africa/Near East - average crude oil and NGL sale price1                                                           |   |                                        | **65.75**      |   |   | 48.26 |   |   | 38.76 |   |
| **International                    - average crude oil and NGL sale price from continuing                    operations**                   |   | **$**                                       | **65.90**      |   | $ | 49.19 |   | $ | 39.86 |   |
| **Natural                    gas** *($/Mcf)*                                                                                           |   |                                        |           |   |   |   |   |   |   |   |
| North                    American Natural Gas                                                                                               |   | **$**                                       | **8.47**       |   | $ | 6.72 |   | $ | 6.50 |   |
| Northwest                    Europe                                                                                                         |   |                                        | **7.35**       |   |   | 5.65 |   |   | 5.42 |   |
| Northern                    Latin America                                                                                                   |   |                                        | **6.62**       |   |   | 4.81 |   |   | 4.01 |   |
| **Total                    natural gas from continuing operations**                                                                         |   |                                        | **8.21**       |   |   | 6.45 |   |   | 6.21 |   |
| Discontinued                    operations                                                                                                  |   |                                        | **6.43**       |   |   | 4.81 |   |   | 4.84 |   |
| **Total                    natural gas**                                                                                                    |   | **$**                                       | **8.16**       |   | $ | 6.41 |   | $ | 6.16 |   |

----

**NORTH          AMERICAN NATURAL GAS**

*($/Mcfe,          unless otherwise indicated)*

|                                                                                               |   | **2005                      Three Months Ended** |      |                             |   | 2004                      Three Months Ended |   |                             |      |                                     |   |
|----------------------------------------------------------------------------------------------------|--------|--------------------------------------------------|-----------|----------------------------------|--------|----------------------------------------------|--------|----------------------------------|-----------|------------------------------------------|--------|
|                                                                                               |   | **Mar.                      31**                 |      | **June                      30** |   | **Sept.                      30**            |   | **Dec.                      31** |      | **Total                      2005****1** |   | Mar.                      31 |   | June                      30 |   | Sept.                      301 |   | Dec.                      311 |   | Total                      20041 |   | Total                      2003 |   |
| Average                      price received                                                        |   | **$**                                            | **6.95**  |                             | **$**  | **7.56**                                     |   | **$**                            | **8.56**  |                                     | **$**  | **11.72** |   | **$** | **8.67** |   | $ | 6.50 |   | $ | 7.03 |   | $ | 6.81 |   | $ | 7.19 |   | $ | 6.89 |   | $ | 6.51 |   |
| Royalties                                                                                          |   |                                             | **(1.68** | **)**                            |   | **(1.75**                                    | **)**  |                             | **(1.83** | **)**                                    |   | **(2.89** | **)** |   | **(2.03** | **)** |   | (1.63 | ) |   | (1.64 | ) |   | (1.68 | ) |   | (1.65 | ) |   | (1.65 | ) |   | (1.61 | ) |
| Operating                      expenses                                                            |   |                                             | **(0.77** | **)**                            |   | **(0.91**                                    | **)**  |                             | **(0.98** | **)**                                    |   | **(1.14** | **)** |   | **(0.95** | **)** |   | (0.65 | ) |   | (0.76 | ) |   | (0.84 | ) |   | (0.80 | ) |   | (0.76 | ) |   | (0.59 | ) |
| Netback                                                                                            |   |                                             | **4.50**  |                             |   | **4.90**                                     |   |                             | **5.75**  |                                     |   | **7.69** |   |   | **5.69** |   |   | 4.22 |   |   | 4.63 |   |   | 4.29 |   |   | 4.74 |   |   | 4.48 |   |   | 4.31 |   |
| Overhead                      expenses (G&A)2                                                  |   |                                             | **(0.16** | **)**                            |   | **(0.23**                                    | **)**  |                             | **(0.21** | **)**                                    |   | **(0.19** | **)** |   | **(0.20** | **)** |   | (0.17 | ) |   | (0.16 | ) |   | (0.16 | ) |   | (0.26 | ) |   | (0.19 | ) |   | (0.15 | ) |
| Netback                      after overhead expenses                                               |   |                                             | **4.34**  |                             |   | **4.67**                                     |   |                             | **5.54**  |                                     |   | **7.50** |   |   | **5.49** |   |   | 4.05 |   |   | 4.47 |   |   | 4.13 |   |   | 4.48 |   |   | 4.29 |   |   | 4.16 |   |
| Processing                      and other income                                                   |   |                                             | **0.08**  |                             |   | **(0.01**                                    | **)**  |                             | **0.01**  |                                     |   | **0.18** |   |   | **0.07** |   |   | 0.04 |   |   | 0.02 |   |   | 0.06 |   |   | 0.11 |   |   | 0.06 |   |   | 0.02 |   |
| Exploration                      expenses                                                          |   |                                             | **(0.55** | **)**                            |   | **(0.24**                                    | **)**  |                             | **(0.46** | **)**                                    |   | **(0.28** | **)** |   | **(0.39** | **)** |   | (0.25 | ) |   | (0.22 | ) |   | (0.36 | ) |   | (0.36 | ) |   | (0.30 | ) |   | (0.29 | ) |
| Depletion,                      depreciation and amortization                                      |   |                                             | **(1.29** | **)**                            |   | **(1.32**                                    | **)**  |                             | **(1.30** | **)**                                    |   | **(1.31** | **)** |   | **(1.30** | **)** |   | (1.04 | ) |   | (1.07 | ) |   | (1.14 | ) |   | (1.16 | ) |   | (1.10 | ) |   | (0.96 | ) |
| Income                      and other taxes                                                        |   |                                             | **(0.90** | **)**                            |   | **(1.44**                                    | **)**  |                             | **(1.52** | **)**                                    |   | **(1.92** | **)** |   | **(1.44** | **)** |   | (0.99 | ) |   | (1.21 | ) |   | (1.03 | ) |   | (1.18 | ) |   | (1.10 | ) |   | (1.20 | ) |
| **Net                      earnings**                                                              |   | **$**                                            | **1.68**  |                             | **$**  | **1.66**                                     |   | **$**                            | **2.27**  |                                     | **$**  | **4.17** |   | **$** | **2.43** |   | $ | 1.81 |   | $ | 1.99 |   | $ | 1.66 |   | $ | 1.89 |   | $ | 1.85 |   | $ | 1.73 |   |
| Production                      *(billion                      cubic feet equivalent - Bcfe)* |   |                                             | **71.9**  |                             |   | **67.4**                                     |   |                             | **69.0**  |                                     |   | **67.4** |   |   | **275.7** |   |   | 69.8 |   |   | 70.4 |   |   | 72.2 |   |   | 75.6 |   |   | 288.0 |   |   | 289.8 |   |

**EAST          COAST OIL**

*($/bbl,          unless otherwise indicated)*

|                                                          |   | **2005                      Three Months Ended** |       |                             |   | 2004                      Three Months Ended |   |                             |       |                                |   |
|---------------------------------------------------------------|--------|--------------------------------------------------|------------|----------------------------------|--------|----------------------------------------------|--------|----------------------------------|------------|-------------------------------------|--------|
|                                                          |   | **Mar.                      31**                 |       | **June                      30** |   | **Sept.                      30**            |   | **Dec.                      31** |       | **Total                      2005** |   | Mar.                      31 |   | June                      30 |   | Sept.                      30 |   | Dec.                      31 |   | Total                      2004 |   | Total                      2003 |   |
| Average                      price received                   |   | **$**                                            | **55.09**  |                             | **$**  | **61.41**                                    |   | **$**                            | **73.37**  |                                | **$**  | **64.23** |   | **$** | **63.15** |   | $ | 42.73 |   | $ | 47.51 |   | $ | 54.43 |   | $ | 50.29 |   | $ | 48.39 |   | $ | 39.91 |   |
| Royalties                                                     |   |                                             | **(2.35**  | **)**                            |   | **(3.33**                                    | **)**  |                             | **(4.76**  | **)**                               |   | **(8.44** | **)** |   | **(4.78** | **)** |   | (1.19 | ) |   | (1.66 | ) |   | (2.56 | ) |   | (2.38 | ) |   | (1.89 | ) |   | (0.95 | ) |
| Operating                      expenses                       |   |                                             | **(3.11**  | **)**                            |   | **(3.85**                                    | **)**  |                             | **(5.42**  | **)**                               |   | **(5.21** | **)** |   | **(4.37** | **)** |   | (2.54 | ) |   | (2.48 | ) |   | (3.29 | ) |   | (2.66 | ) |   | (2.72 | ) |   | (2.70 | ) |
| Netback                                                       |   |                                             | **49.63**  |                             |   | **54.23**                                    |   |                             | **63.19**  |                                |   | **50.58** |   |   | **54.00** |   |   | 39.00 |   |   | 43.37 |   |   | 48.58 |   |   | 45.25 |   |   | 43.78 |   |   | 36.26 |   |
| Overhead                      expenses (G&A)2             |   |                                             | **(0.09**  | **)**                            |   | **0.09**                                     |   |                             | **-**      |                                |   | **(0.54** | **)** |   | **(0.15** | **)** |   | (0.14 | ) |   | (0.16 | ) |   | (0.20 | ) |   | (0.18 | ) |   | (0.17 | ) |   | (0.18 | ) |
| Netback                      after overhead expenses          |   |                                             | **49.54**  |                             |   | **54.32**                                    |   |                             | **63.19**  |                                |   | **50.04** |   |   | **53.85** |   |   | 38.86 |   |   | 43.21 |   |   | 48.38 |   |   | 45.07 |   |   | 43.61 |   |   | 36.08 |   |
| Processing                      and other income              |   |                                             | **-**      |                             |   | **-**                                        |   |                             | **0.46**   |                                |   | **-** |   |   | **0.10** |   |   | 5.81 |   |   | (0.03 | ) |   | 0.24 |   |   | - |   |   | 1.66 |   |   | 0.78 |   |
| Depletion,                      depreciation and amortization |   |                                             | **(9.65**  | **)**                            |   | **(10.06**                                   | **)**  |                             | **(9.97**  | **)**                               |   | **(9.06** | **)** |   | **(9.66** | **)** |   | (8.87 | ) |   | (9.00 | ) |   | (9.18 | ) |   | (9.17 | ) |   | (9.05 | ) |   | (8.42 | ) |
| Income                      and other taxes                   |   |                                             | **(11.63** | **)**                            |   | **(15.34**                                   | **)**  |                             | **(17.43** | **)**                               |   | **(14.65** | **)** |   | **(14.66** | **)** |   | (11.35 | ) |   | (10.85 | ) |   | (12.75 | ) |   | (11.56 | ) |   | (11.58 | ) |   | (8.70 | ) |
| **Net                      earnings**                         |   | **$**                                            | **28.26**  |                             | **$**  | **28.92**                                    |   | **$**                            | **36.25**  |                                | **$**  | **26.33** |   | **$** | **29.63** |   | $ | 24.45 |   | $ | 23.33 |   | $ | 26.69 |   | $ | 24.34 |   | $ | 24.64 |   | $ | 19.74 |   |
| Production                      *(MMbbls)*                    |   |                                             | **7.0**    |                             |   | **7.1**                                      |   |                             | **6.0**    |                                |   | **7.5** |   |   | **27.6** |   |   | 8.0 |   |   | 7.8 |   |   | 6.5 |   |   | 6.3 |   |   | 28.6 |   |   | 31.4 |   |

----

**SYNCRUDE**

*($/bbl,            unless otherwise indicated)*

|                                                          |   | **2005                      Three Months Ended** |       |                             |   | 2004                      Three Months Ended |   |                             |       |                                |   |
|---------------------------------------------------------------|--------|--------------------------------------------------|------------|----------------------------------|--------|----------------------------------------------|--------|----------------------------------|------------|-------------------------------------|--------|
|                                                          |   | **Mar.                      31**                 |       | **June                      30** |   | **Sept.                      30**            |   | **Dec.                      31** |       | **Total                      2005** |   | Mar.                      31 |   | June                      30 |   | Sept.                      30 |   | Dec.                      31 |   | Total                      2004 |   | Total                      2003 |   |
| Average                      price received                   |   | **$**                                            | **64.40**  |                             | **$**  | **67.08**                                    |   | **$**                            | **77.16**  |                                | **$**  | **70.82** |   | **$** | **70.42** |   | $ | 45.34 |   | $ | 51.41 |   | $ | 54.81 |   | $ | 58.58 |   | $ | 52.40 |   | $ | 42.67 |   |
| Royalties                                                     |   |                                             | **(0.65**  | **)**                            |   | **(0.66**                                    | **)**  |                             | **(0.78**  | **)**                               |   | **(0.71** | **)** |   | **(0.71** | **)** |   | (0.45 | ) |   | (0.52 | ) |   | (0.55 | ) |   | (0.96 | ) |   | (0.61 | ) |   | (0.48 | ) |
| Operating                      expenses                       |   |                                             | **(44.24** | **)**                            |   | **(26.70**                                   | **)**  |                             | **(26.95** | **)**                               |   | **(34.04** | **)** |   | **(31.90** | **)** |   | (18.54 | ) |   | (22.70 | ) |   | (19.97 | ) |   | (23.66 | ) |   | (21.13 | ) |   | (23.94 | ) |
| Netback                                                       |   |                                             | **19.51**  |                             |   | **39.72**                                    |   |                             | **49.43**  |                                |   | **36.07** |   |   | **37.81** |   |   | 26.35 |   |   | 28.19 |   |   | 34.29 |   |   | 33.96 |   |   | 30.66 |   |   | 18.25 |   |
| Depletion,                      depreciation and amortization |   |                                             | **(1.89**  | **)**                            |   | **(1.89**                                    | **)**  |                             | **(1.96**  | **)**                               |   | **(2.04** | **)** |   | **(1.95** | **)** |   | (1.79 | ) |   | (1.80 | ) |   | (1.79 | ) |   | (1.79 | ) |   | (1.79 | ) |   | (1.78 | ) |
| Income                      and other taxes                   |   |                                             | **(5.18**  | **)**                            |   | **(13.64**                                   | **)**  |                             | **(15.47** | **)**                               |   | **(11.45** | **)** |   | **(12.03** | **)** |   | (7.35 | ) |   | (8.83 | ) |   | (10.57 | ) |   | (10.60 | ) |   | (9.31 | ) |   | (5.26 | ) |
| **Net                      earnings**                         |   | **$**                                            | **12.44**  |                             | **$**  | **24.19**                                    |   | **$**                            | **32.00**  |                                | **$**  | **22.58** |   | **$** | **23.83** |   | $ | 17.21 |   | $ | 17.56 |   | $ | 21.93 |   | $ | 21.57 |   | $ | 19.56 |   | $ | 11.21 |   |
| Production                      *(MMbbls)*                    |   |                                             | **1.7**    |                             |   | **2.5**                                      |   |                             | **2.6**    |                                |   | **2.5** |   |   | **9.3** |   |   | 2.8 |   |   | 2.5 |   |   | 2.7 |   |   | 2.5 |   |   | 10.5 |   |   | 9.3 |   |

**MACKAY          RIVER**

*($/bbl,          unless otherwise indicated)*

|                                                          |   | **2005                      Three Months Ended** |       |                             |   | 2004                      Three Months Ended |   |                             |       |                                |   |
|---------------------------------------------------------------|--------|--------------------------------------------------|------------|----------------------------------|--------|----------------------------------------------|--------|----------------------------------|------------|-------------------------------------|--------|
|                                                          |   | **Mar.                      31**                 |       | **June                      30** |   | **Sept.                      30**            |   | **Dec.                      31** |       | **Total                      2005** |   | Mar.                      31 |   | June                      30 |   | Sept.                      30 |   | Dec.                      31 |   | Total                      2004 |   | Total                      2003 |   |
| Average                      price received                   |   | **$**                                            | **10.88**  |                             | **$**  | **13.92**                                    |   | **$**                            | **31.98**  |                                | **$**  | **15.27** |   | **$** | **18.61** |   | $ | 19.10 |   | $ | 19.61 |   | $ | 25.15 |   | $ | 11.41 |   | $ | 18.37 |   | $ | 16.69 |   |
| Royalties                                                     |   |                                             | **(0.08**  | **)**                            |   | **(0.11**                                    | **)**  |                             | **(0.30**  | **)**                               |   | **(0.12** | **)** |   | **(0.16** | **)** |   | (0.16 | ) |   | (0.15 | ) |   | (0.22 | ) |   | (0.11 | ) |   | (0.16 | ) |   | (0.12 | ) |
| Operating                      expenses                       |   |                                             | **(14.80** | **)**                            |   | **(15.65**                                   | **)**  |                             | **(14.08** | **)**                               |   | **(20.72** | **)** |   | **(16.29** | **)** |   | (18.40 | ) |   | (30.32 | ) |   | (20.08 | ) |   | (17.76 | ) |   | (20.98 | ) |   | (22.34 | ) |
| Netback                                                       |   |                                             | **(4.00**  | **)**                            |   | **(1.84**                                    | **)**  |                             | **17.60**  |                                |   | **(5.57** | **)** |   | **2.16** |   |   | 0.54 |   |   | (10.86 | ) |   | 4.85 |   |   | (6.46 | ) |   | (2.77 | ) |   | (5.77 | ) |
| Overhead                      expenses (G&A)2             |   |                                             | **(0.74**  | **)**                            |   | **(0.80**                                    | **)**  |                             | **(0.69**  | **)**                               |   | **(0.84** | **)** |   | **(0.77** | **)** |   | (0.78 | ) |   | (1.09 | ) |   | (0.96 | ) |   | (0.80 | ) |   | (0.89 | ) |   | (1.39 | ) |
| Netback                      after overhead expenses          |   |                                             | **(4.74**  | **)**                            |   | **(2.64**                                    | **)**  |                             | **16.91**  |                                |   | **(6.41** | **)** |   | **1.39** |   |   | (0.24 | ) |   | (11.95 | ) |   | 3.89 |   |   | (7.26 | ) |   | (3.66 | ) |   | (7.16 | ) |
| Processing                      and other income              |   |                                             | **(0.51**  | **)**                            |   | **0.16**                                     |   |                             | **0.02**   |                                |   | **-** |   |   | **(0.06** | **)** |   | - |   |   | - |   |   | - |   |   | (0.01 | ) |   | - |   |   | 0.04 |   |
| Exploration                      expenses                     |   |                                             | **(0.44**  | **)**                            |   | **(0.04**                                    | **)**  |                             | **0.03**   |                                |   | **(0.07** | **)** |   | **(0.12** | **)** |   | (0.04 | ) |   | (0.05 | ) |   | - |   |   | (0.02 | ) |   | (0.03 | ) |   | (0.11 | ) |
| Depletion,                      depreciation and amortization |   |                                             | **(3.18**  | **)**                            |   | **(3.18**                                    | **)**  |                             | **(3.08**  | **)**                               |   | **(3.53** | **)** |   | **(3.24** | **)** |   | (3.10 | ) |   | (3.37 | ) |   | (3.14 | ) |   | (3.09 | ) |   | (3.16 | ) |   | (3.29 | ) |
| Income                      and other taxes                   |   |                                             | **2.63**   |                             |   | **1.22**                                     |   |                             | **(4.37**  | **)**                               |   | **2.70** |   |   | **0.35** |   |   | 1.20 |   |   | 4.47 |   |   | (0.36 | ) |   | 2.78 |   |   | 1.94 |   |   | 3.24 |   |
| **Net                      earnings (loss)**                  |   | **$**                                            | **(6.24**  | **)**                            | **$**  | **(4.48**                                    | **)**  | **$**                            | **9.51**   |                                | **$**  | **(7.31** | **)** | **$** | **(1.68** | **)** | $ | (2.18 | ) | $ | (10.90 | ) | $ | 0.39 |   | $ | (7.60 | ) | $ | (4.91 | ) | $ | (7.28 | ) |
| Production                      *(MMbbls)*                    |   |                                             | **1.7**    |                             |   | **1.9**                                      |   |                             | **2.2**    |                                |   | **2.0** |   |   | **7.8** |   |   | 1.5 |   |   | 1.2 |   |   | 1.6 |   |   | 1.8 |   |   | 6.1 |   |   | 3.9 |   |

**NORTHWEST          EUROPE**
**3, 4**

*($/boe,          unless otherwise indicated)*

|                                                          |   | **2005                      Three Months Ended** |       |                             |   | 2004                      Three Months Ended |   |                             |       |                                |   |
|---------------------------------------------------------------|--------|--------------------------------------------------|------------|----------------------------------|--------|----------------------------------------------|--------|----------------------------------|------------|-------------------------------------|--------|
|                                                          |   | **Mar.                      31**                 |       | **June                      30** |   | **Sept.                      30**            |   | **Dec.                      31** |       | **Total                      2005** |   | Mar.                      31 |   | June                      30 |   | Sept.                      30 |   | Dec.                      31 |   | Total                      2004 |   | Total                      2003 |   |
| Average                      price received5                  |   | **$**                                            | **53.61**  |                             | **$**  | **59.11**                                    |   | **$**                            | **65.82**  |                                | **$**  | **63.82** |   | **$** | **60.74** |   | $ | 41.00 |   | $ | 44.71 |   | $ | 49.99 |   | $ | 50.46 |   | $ | 46.08 |   | $ | 38.69 |   |
| Royalties                                                     |   |                                             | **-**      |                             |   | **(2.06**                                    | **)**  |                             | **(0.96**  | **)**                               |   | **(0.62** | **)** |   | **(0.85** | **)** |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Net                      revenue                              |   |                                             | **53.61**  |                             |   | **57.05**                                    |   |                             | **64.86**  |                                |   | **63.20** |   |   | **59.89** |   |   | 41.00 |   |   | 44.71 |   |   | 49.99 |   |   | 50.46 |   |   | 46.08 |   |   | 38.69 |   |
| Operating                      expenses                       |   |                                             | **(8.23**  | **)**                            |   | **(10.66**                                   | **)**  |                             | **(8.86**  | **)**                               |   | **(10.99** | **)** |   | **(9.62** | **)** |   | (6.50 | ) |   | (7.81 | ) |   | (9.04 | ) |   | (8.65 | ) |   | (7.89 | ) |   | (6.90 | ) |
| Netback                                                       |   |                                             | **45.38**  |                             |   | **46.39**                                    |   |                             | **56.00**  |                                |   | **52.21** |   |   | **50.27** |   |   | 34.50 |   |   | 36.90 |   |   | 40.95 |   |   | 41.81 |   |   | 38.19 |   |   | 31.79 |   |
| Overhead                      expenses (G&A)2             |   |                                             | **(1.54**  | **)**                            |   | **(2.98**                                    | **)**  |                             | **(2.48**  | **)**                               |   | **(1.96** | **)** |   | **(2.20** | **)** |   | (0.37 | ) |   | (0.90 | ) |   | (0.38 | ) |   | (2.44 | ) |   | (0.96 | ) |   | (0.82 | ) |
| Netback                      after overhead expenses          |   |                                             | **43.84**  |                             |   | **43.41**                                    |   |                             | **53.52**  |                                |   | **50.25** |   |   | **48.07** |   |   | 34.13 |   |   | 36.00 |   |   | 40.57 |   |   | 39.37 |   |   | 37.23 |   |   | 30.97 |   |
| Processing                      and other income              |   |                                             | **2.62**   |                             |   | **0.65**                                     |   |                             | **(3.26**  | **)**                               |   | **1.50** |   |   | **1.81** |   |   | 5.78 |   |   | (4.97 | ) |   | (2.75 | ) |   | 0.83 |   |   | (0.07 | ) |   | 0.98 |   |
| Exploration                      expenses                     |   |                                             | **(0.75**  | **)**                            |   | **(2.06**                                    | **)**  |                             | **(1.15**  | **)**                               |   | **(1.93** | **)** |   | **(1.43** | **)** |   | (0.52 | ) |   | (3.79 | ) |   | (1.45 | ) |   | (3.55 | ) |   | (2.25 | ) |   | (1.17 | ) |
| Depletion,                      depreciation and amortization |   |                                             | **(14.31** | **)**                            |   | **(15.06**                                   | **)**  |                             | **(15.19** | **)**                               |   | **(14.64** | **)** |   | **(14.79** | **)** |   | (13.48 | ) |   | (13.67 | ) |   | (13.78 | ) |   | (12.94 | ) |   | (13.48 | ) |   | (11.37 | ) |
| Income                      and other taxes                   |   |                                             | **(14.17** | **)**                            |   | **(11.71**                                   | **)**  |                             | **(14.62** | **)**                               |   | **(14.60** | **)** |   | **(14.50** | **)** |   | (10.69 | ) |   | (5.57 | ) |   | (8.91 | ) |   | (7.85 | ) |   | (8.32 | ) |   | (7.90 | ) |
| **Net                      earnings**                         |   | **$**                                            | **17.23**  |                             | **$**  | **15.23**                                    |   | **$**                            | **19.30**  |                                | **$**  | **20.58** |   | **$** | **19.16** |   | $ | 15.22 |   | $ | 8.00 |   | $ | 13.68 |   | $ | 15.86 |   | $ | 13.11 |   | $ | 11.51 |   |
| Production                      *(MMboe)*                     |   |                                             | **4.3**    |                             |   | **3.3**                                      |   |                             | **4.4**    |                                |   | **4.3** |   |   | **16.3** |   |   | 5.8 |   |   | 5.3 |   |   | 4.6 |   |   | 4.3 |   |   | 20.0 |   |   | 18.6 |   |

----

**NORTH          AFRICA/NEAR EAST**
**3,          6, 8**

*($/boe,          unless otherwise indicated)*

|                                                          |   | **2005                      Three Months Ended** |       |                             |   | 2004                      Three Months Ended |   |                             |       |                                |   |
|---------------------------------------------------------------|--------|--------------------------------------------------|------------|----------------------------------|--------|----------------------------------------------|--------|----------------------------------|------------|-------------------------------------|--------|
|                                                          |   | **Mar.                      31**                 |       | **June                      30** |   | **Sept.                      30**            |   | **Dec.                      31** |       | **Total                      2005** |   | Mar.                      31 |   | June                      30 |   | Sept.                      30 |   | Dec.                      31 |   | Total                      2004 |   | Total                      2003 |   |
| Average                      price received5                  |   | **$**                                            | **56.01**  |                             | **$**  | **69.84**                                    |   | **$**                            | **74.20**  |                                | **$**  | **62.44** |   | **$** | **65.75** |   | $ | 41.48 |   | $ | 47.37 |   | $ | 53.07 |   | $ | 51.36 |   | $ | 48.35 |   | $ | 39.50 |   |
| Royalties                                                     |   |                                             | **(4.04**  | **)**                            |   | **(11.17**                                   | **)**  |                             | **(8.08**  | **)**                               |   | **(6.91** | **)** |   | **(7.59** | **)** |   | (7.58 | ) |   | (7.77 | ) |   | (7.40 | ) |   | (5.59 | ) |   | (7.08 | ) |   | (7.12 | ) |
| Net                      revenue                              |   |                                             | **51.97**  |                             |   | **58.67**                                    |   |                             | **66.12**  |                                |   | **55.53** |   |   | **58.16** |   |   | 33.90 |   |   | 39.60 |   |   | 45.67 |   |   | 45.77 |   |   | 41.27 |   |   | 32.38 |   |
| Operating                      expenses                       |   |                                             | **(5.34**  | **)**                            |   | **(3.35**                                    | **)**  |                             | **(5.97**  | **)**                               |   | **(3.39** | **)** |   | **(4.50** | **)** |   | (7.62 | ) |   | (5.41 | ) |   | (4.28 | ) |   | (4.94 | ) |   | (5.56 | ) |   | (4.63 | ) |
| Netback                                                       |   |                                             | **46.63**  |                             |   | **55.32**                                    |   |                             | **60.15**  |                                |   | **52.14** |   |   | **53.66** |   |   | 26.28 |   |   | 34.19 |   |   | 41.39 |   |   | 40.83 |   |   | 35.71 |   |   | 27.75 |   |
| Overhead                      expenses (G&A)2             |   |                                             | **(1.17**  | **)**                            |   | **(0.34**                                    | **)**  |                             | **(0.66**  | **)**                               |   | **(0.82** | **)** |   | **(0.75** | **)** |   | (1.14 | ) |   | (1.24 | ) |   | (1.04 | ) |   | (0.71 | ) |   | (1.03 | ) |   | (1.14 | ) |
| Netback                      after overhead                   |   |                                             | **45.46**  |                             |   | **54.98**                                    |   |                             | **59.49**  |                                |   | **51.32** |   |   | **52.91** |   |   | 25.14 |   |   | 32.95 |   |   | 40.35 |   |   | 40.12 |   |   | 34.68 |   |   | 26.61 |   |
| Processing                      and other income              |   |                                             | **2.19**   |                             |   | **3.08**                                     |   |                             | **1.33**   |                                |   | **3.26** |   |   | **2.47** |   |   | 1.76 |   |   | (0.43 | ) |   | 0.33 |   |   | (2.99 | ) |   | (0.34 | ) |   | (0.72 | ) |
| Exploration                      expenses                     |   |                                             | **(0.13**  | **)**                            |   | **(1.42**                                    | **)**  |                             | **(0.16**  | **)**                               |   | **(0.41** | **)** |   | **(0.53** | **)** |   | (0.48 | ) |   | (2.27 | ) |   | (0.67 | ) |   | (0.15 | ) |   | (0.89 | ) |   | (0.69 | ) |
| Depletion,                      depreciation and amortization |   |                                             | **(2.33**  | **)**                            |   | **(2.27**                                    | **)**  |                             | **(2.14**  | **)**                               |   | **(1.46** | **)** |   | **(2.04** | **)** |   | (2.48 | ) |   | (2.52 | ) |   | (2.67 | ) |   | (3.23 | ) |   | (2.73 | ) |   | (2.10 | ) |
| Income                      and other taxes                   |   |                                             | **(39.88** | **)**                            |   | **(47.19**                                   | **)**  |                             | **(52.58** | **)**                               |   | **(46.26** | **)** |   | **(46.58** | **)** |   | (20.54 | ) |   | (26.39 | ) |   | (33.97 | ) |   | (25.30 | ) |   | (26.58 | ) |   | (23.60 | ) |
| **Net                      earnings**                         |   | **$**                                            | **5.31**   |                             | **$**  | **7.18**                                     |   | **$**                            | **5.94**   |                                | **$**  | **6.45** |   | **$** | **6.23** |   | $ | 3.40 |   | $ | 1.34 |   | $ | 3.37 |   | $ | 8.45 |   | $ | 4.14 |   | $ | (0.50 | ) |
| Production                      *(MMboe)*                     |   |                                             | **4.4**    |                             |   | **4.5**                                      |   |                             | **4.6**    |                                |   | **4.7** |   |   | **18.2** |   |   | 4.6 |   |   | 4.5 |   |   | 4.7 |   |   | 4.7 |   |   | 18.5 |   |   | 18.6 |   |

**NORTHERN          LATIN AMERICA**
**3,          7**

*($/Mcf,          unless otherwise indicated)*

|                                                          |   | **2005                      Three Months Ended** |      |                             |   | 2004                      Months Ended |   |                             |      |                                |   |
|---------------------------------------------------------------|--------|--------------------------------------------------|-----------|----------------------------------|--------|----------------------------------------|--------|----------------------------------|-----------|-------------------------------------|--------|
|                                                          |   | **Mar.                      31**                 |      | **June                      30** |   | **Sept.                      30**      |   | **Dec.                      31** |      | **Total                      2005** |   | Mar.                      31 |   | June                      30 |   | Sept.                      30 |   | Dec.                      31 |   | Total2004 |   | Total2003 |   |
| Average                      price received                   |   | **$**                                            | **5.09**  |                             | **$**  | **5.05**                               |   | **$**                            | **6.90**  |                                | **$**  | **9.82** |   | **$** | **6.62** |   | $ | 4.72 |   | $ | 4.99 |   | $ | 4.24 |   | $ | 5.30 |   | $ | 4.81 |   | $ | 4.01 |   |
| Royalties                                                     |   |                                             | **-**     |                             |   | **(4.42**                              | **)**  |                             | **(4.86** | **)**                               |   | **(1.83** | **)** |   | **(2.06** | **)** |   | - |   |   | (0.62 | ) |   | (1.43 | ) |   | (2.02 | ) |   | (1.05 | ) |   | - |   |
| Net                      revenue                              |   |                                             | **5.09**  |                             |   | **0.63**                               |   |                             | **2.04**  |                                |   | **7.99** |   |   | **4.56** |   |   | 4.72 |   |   | 4.37 |   |   | 2.81 |   |   | 3.28 |   |   | 3.76 |   |   | 4.01 |   |
| Operating                      expenses                       |   |                                             | **(0.22** | **)**                            |   | **(0.14**                              | **)**  |                             | **(0.18** | **)**                               |   | **(0.15** | **)** |   | **(0.17** | **)** |   | (0.13 | ) |   | (0.19 | ) |   | (0.07 | ) |   | (0.09 | ) |   | (0.12 | ) |   | (0.15 | ) |
| Netback                                                       |   |                                             | **4.87**  |                             |   | **0.49**                               |   |                             | **1.86**  |                                |   | **7.84** |   |   | **4.39** |   |   | 4.59 |   |   | 4.18 |   |   | 2.74 |   |   | 3.19 |   |   | 3.64 |   |   | 3.86 |   |
| Overhead                      expenses (G&A)2             |   |                                             | **(0.11** | **)**                            |   | **(0.08**                              | **)**  |                             | **(0.08** | **)**                               |   | **(0.13** | **)** |   | **(0.10** | **)** |   | (0.08 | ) |   | (0.12 | ) |   | (0.13 | ) |   | (0.19 | ) |   | (0.13 | ) |   | (0.07 | ) |
| Netback                      after overhead expenses          |   |                                             | **4.76**  |                             |   | **0.41**                               |   |                             | **1.78**  |                                |   | **7.71** |   |   | **4.29** |   |   | 4.51 |   |   | 4.06 |   |   | 2.61 |   |   | 3.00 |   |   | 3.51 |   |   | 3.79 |   |
| Processing                      and other income              |   |                                             | **0.02**  |                             |   | **0.08**                               |   |                             | **(0.02** | **)**                               |   | **-** |   |   | **0.02** |   |   | (0.04 | ) |   | 0.02 |   |   | (0.07 | ) |   | (0.07 | ) |   | (0.04 | ) |   | (0.55 | ) |
| Depletion,                      depreciation and amortization |   |                                             | **(0.65** | **)**                            |   | **(0.65**                              | **)**  |                             | **(0.65** | **)**                               |   | **(0.65** | **)** |   | **(0.65** | **)** |   | (0.59 | ) |   | (0.57 | ) |   | (0.58 | ) |   | (0.54 | ) |   | (0.57 | ) |   | (0.81 | ) |
| Income                      and other taxes                   |   |                                             | **(2.48** | **)**                            |   | **1.19**                               |   |                             | **0.54**  |                                |   | **(4.22** | **)** |   | **(1.89** | **)** |   | (1.51 | ) |   | (2.60 | ) |   | (1.13 | ) |   | (1.28 | ) |   | (1.62 | ) |   | (0.68 | ) |
| **Net                      earnings**                         |   | **$**                                            | **1.65**  |                             | **$**  | **1.03**                               |   | **$**                            | **1.65**  |                                | **$**  | **2.84** |   | **$** | **1.77** |   | $ | 2.37 |   | $ | 0.91 |   | $ | 0.83 |   | $ | 1.11 |   | $ | 1.28 |   | $ | 1.75 |   |
| Production                      *(Bcf)*                       |   |                                             | **6.8**   |                             |   | **6.8**                                |   |                             | **6.6**   |                                |   | **6.1** |   |   | **26.3** |   |   | 6.1 |   |   | 6.4 |   |   | 6.8 |   |   | 6.8 |   |   | 26.1 |   |   | 23.2 |   |

----

**DISCONTINUED          OPERATIONS**
**8**

*($/boe,          unless otherwise indicated)*

|                                                            |   | **2005                        Three Months Ended** |       |                               |   | 2004                        Three Months Ended |   |                               |       |                                  |   |
|-----------------------------------------------------------------|--------|----------------------------------------------------|------------|------------------------------------|--------|------------------------------------------------|--------|------------------------------------|------------|---------------------------------------|--------|
|                                                            |   | **Mar.                        31**                 |       | **June                        30** |   | **Sept.                        30**            |   | **Dec.                        31** |       | **Total                        2005** |   | Mar.                        31 |   | June                        30 |   | Sept.                        30 |   | Dec.                        31 |   | Total                        2004 |   | Total                        2003 |   |
| Average                        price received5                  |   | **$**                                              | **52.83**  |                               | **$**  | **58.96**                                      |   | **$**                              | **65.24**  |                                  | **$**  | **62.80** |   | **$** | **60.39** |   | $ | 39.88 |   | $ | 45.95 |   | $ | 53.01 |   | $ | 45.65 |   | $ | 45.91 |   | $ | 37.80 |   |
| Royalties                                                       |   |                                               | **(35.71** | **)**                              |   | **(41.73**                                     | **)**  |                               | **(45.73** | **)**                                 |   | **(43.60** | **)** |   | **(42.15** | **)** |   | (26.44 | ) |   | (31.15 | ) |   | (37.57 | ) |   | (31.56 | ) |   | (31.49 | ) |   | (24.38 | ) |
| Net                        revenue                              |   |                                               | **17.12**  |                               |   | **17.23**                                      |   |                               | **19.51**  |                                  |   | **19.20** |   |   | **18.24** |   |   | 13.44 |   |   | 14.80 |   |   | 15.44 |   |   | 14.09 |   |   | 14.42 |   |   | 13.42 |   |
| Operating                        expenses                       |   |                                               | **(3.91**  | **)**                              |   | **(3.08**                                      | **)**  |                               | **(4.52**  | **)**                                 |   | **(3.96** | **)** |   | **(3.87** | **)** |   | (3.34 | ) |   | (4.08 | ) |   | (4.17 | ) |   | (4.26 | ) |   | (3.94 | ) |   | (3.46 | ) |
| Netback                                                         |   |                                               | **13.21**  |                               |   | **14.15**                                      |   |                               | **14.99**  |                                  |   | **15.24** |   |   | **14.37** |   |   | 10.10 |   |   | 10.72 |   |   | 11.27 |   |   | 9.83 |   |   | 10.48 |   |   | 9.96 |   |
| Overhead                        expenses (G&A)2             |   |                                               | **(0.21**  | **)**                              |   | **(0.17**                                      | **)**  |                               | **(0.12**  | **)**                                 |   | **(0.23** | **)** |   | **(0.19** | **)** |   | (0.10 | ) |   | (0.15 | ) |   | (0.16 | ) |   | (0.16 | ) |   | (0.14 | ) |   | (0.13 | ) |
| Netback                        after overhead                   |   |                                               | **13.00**  |                               |   | **13.98**                                      |   |                               | **14.87**  |                                  |   | **15.01** |   |   | **14.18** |   |   | 10.00 |   |   | 10.57 |   |   | 11.11 |   |   | 9.67 |   |   | 10.34 |   |   | 9.83 |   |
| Processing                        and other income              |   |                                               | **0.33**   |                               |   | **0.47**                                       |   |                               | **(0.22**  | **)**                                 |   | **(0.07** | **)** |   | **0.14** |   |   | 0.17 |   |   | 0.21 |   |   | (0.02 | ) |   | (0.55 | ) |   | (0.04 | ) |   | 0.64 |   |
| Depletion,                        depreciation and amortization |   |                                               | **(6.89**  | **)**                              |   | **(6.63**                                      | **)**  |                               | **(6.30**  | **)**                                 |   | **(2.66** | **)** |   | **(5.67** | **)** |   | (5.13 | ) |   | (5.10 | ) |   | (4.96 | ) |   | (4.88 | ) |   | (5.02 | ) |   | (3.77 | ) |
| Income                        and other taxes                   |   |                                               | **(3.88**  | **)**                              |   | **(4.39**                                      | **)**  |                               | **(5.10**  | **)**                                 |   | **(4.87** | **)** |   | **(4.55** | **)** |   | (2.98 | ) |   | (3.31 | ) |   | (3.72 | ) |   | (3.40 | ) |   | (3.34 | ) |   | (3.46 | ) |
| **Net                        earnings**                         |   | **$**                                              | **2.56**   |                               | **$**  | **3.43**                                       |   | **$**                              | **3.25**   |                                  | **$**  | **7.41** |   | **$** | **4.10** |   | $ | 2.06 |   | $ | 2.37 |   | $ | 2.41 |   | $ | 0.84 |   | $ | 1.94 |   | $ | 3.24 |   |
| Production                        *(MMboe)*                     |   |                                               | **6.6**    |                               |   | **6.5**                                        |   |                               | **6.4**    |                                  |   | **6.1** |   |   | **25.6** |   |   | 7.9 |   |   | 7.3 |   |   | 6.9 |   |   | 6.9 |   |   | 29.0 |   |   | 34.7 |   |

| 1 | North                    American Natural Gas includes U.S. Rockies post-acquisition date as                    of July 28, 2004. |
|---|----------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Portion                    of head office expenses allocated to production. |
|---|-----------------------------------------------------------------------------|

| 3 | Northwest                    Europe and North Africa/Near East include conventional crude                    oil, NGL and                    natural gas in crude oil equivalents. Northern Latin America                    includes only                    natural gas. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4 | Production                    in Northwest Europe is subject to a conventional royalty and                    tax regime.                    No royalty is payable on reserves in the U.K. sector. Royalty is                    payable on onshore reserves in the Netherlands. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5 | Average                    price for Northwest Europe and North Africa/Near East includes                    conventional crude oil, NGL and natural gas in crude oil equivalents. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6 | Excludes                    assets located in Kazakhstan, which were sold in 2004. |
|---|------------------------------------------------------------------------------------|

| 7 | Natural                    gas production in Trinidad and Tobago is held under a production-sharing                    arrangement with the government of that country. The government                    share is                    split between royalty and tax for                    Canadian reporting purposes. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8 | North                    Africa/Near East excludes production related to the mature Syrian                    producing assets, which are shown as discontinued operations. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Reserves**

*          Standards of Disclosure for Oil and Gas Activities*

----

***Petro****-Canada’s          Reserves Processes***

*Reserves          Steering Committee:*

*Reservoir          Engineering Organization:*

*Reserves          Definitions, Policies, Procedures and Practices:*

*Major          Property Reviews:*

*Reserves          Software Tools:*

*Independent          Evaluation/Audit/Review:*

*Reserves          Review and Disclosure Process:*

----

**MAJOR**
**          RESERVES AND PRODUCTION LOCATIONS, BEFORE DEDUCTION OF          ROYALTIES**

| Crude                    Oilfield/Facility1,                    2 | Location                                              | **Proved                    Reserves****3,                    4****at                    December 31, 2005*****(MMbbls)*** | **Average                    2005****Daily                    Production*****(Mbbl/d)*** |
|-------------------------------------------------------------------|-------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------|
| Syncrude                                                          | Alberta                                               | **342**                                                                                                                    | **26**                                                                                   |
| Buzzard                                                           | Offshore                    U.K.                      | **85**                                                                                                                     | **-**                                                                                    |
| Hibernia                                                          | Offshore                    Newfoundland and Labrador | **65**                                                                                                                     | **40**                                                                                   |
| Amal                                                              | Libya                                                 | **47**                                                                                                                     | **15**                                                                                   |
| Ghani/Zenad                    Farrud                             | Libya                                                 | **35**                                                                                                                     | **11**                                                                                   |
| Terra                    Nova                                     | Offshore                    Newfoundland and Labrador | **35**                                                                                                                     | **34**                                                                                   |
| White                    Rose                                     | Offshore                    Newfoundland and Labrador | **31**                                                                                                                     | **2**                                                                                    |
| Ghani                    Gir/Facha                                | Libya                                                 | **20**                                                                                                                     | **7**                                                                                    |
| Ferrier                                                           | Alberta                                               | **18**                                                                                                                     | **3**                                                                                    |
| Guillemot                    West                                 | Offshore                    U.K.                      | **14**                                                                                                                     | **4**                                                                                    |
| Other                                                             |                                                  | **148**                                                                                                                    | **133**                                                                                  |
| **Total**                                                         |                                                  | **840**                                                                                                                    | **275**                                                                                  |

| Natural                    Gas Field/Facility1,                    2 | Location                                        | **Proved                    Reserves at December 31, 2005*****(Bcf)*** | **Average                    2005****Daily                    Production****3*****(MMcf/d)*** |
|----------------------------------------------------------------------|-------------------------------------------------|------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------|
| Wildcat                    Hills area                                | Alberta                                         | **425**                                                                | **119**                                                                                       |
| Hanlan                    area                                       | Alberta                                         | **262**                                                                | **108**                                                                                       |
| NCMA-1                                                               | Offshore                    Trinidad and Tobago | **238**                                                                | **72**                                                                                        |
| Medicine                    Hat                                      | Alberta                                         | **192**                                                                | **44**                                                                                        |
| Jedney/Bubbles                    area                               | British                    Columbia             | **128**                                                                | **29**                                                                                        |
| Alderson                                                             | Alberta                                         | **100**                                                                | **25**                                                                                        |
| Laprise                    area                                      | British                    Columbia             | **92**                                                                 | **31**                                                                                        |
| Ricinus/Bearberry/Strachan                                           | Alberta                                         | **77**                                                                 | **55**                                                                                        |
| Denver-Julesburg                    area                             | U.S.                                            | **69**                                                                 | **19**                                                                                        |
| Gilby/Wilson                                                         | Alberta                                         | **54**                                                                 | **24**                                                                                        |
| Other                                                                |                                            | **558**                                                                | **304**                                                                                       |
| **Total**                                                            |                                            | **2,195**                                                              | **830**                                                                                       |

| 1 | Fields                    are onshore unless otherwise indicated. |
|---|-------------------------------------------------------------------|

| 2 | The                    Company’s mature producing assets in Syria were in the process of being                    sold at December 31, 2005, therefore, the Syrian proved reserves                    of                    49 MMboe before royalties are included inthe                    tables presented. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | The                    reserves and production figures shown in this table do not include                    NGL.                    Total Company proved reserves of crude oil and NGL at year-end                    2005 were                    866 MMbbls. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4 | Syncrude                    reserves are synthetic crude oil reserves from oil sands mining. |
|---|----------------------------------------------------------------------------------------------|

----

**PROVED          RESERVES BEFORE ROYALTIES**
**1,          2, 3, 4, 5**

***(Crude          oil and equivalents in MMbbls; Natural gas in Bcf)***

|                                                             |   |                                   |    | **North                    American - Conventional**                             |   |                                                              |   |                              |    |                            |   |
|------------------------------------------------------------------|--------|----------------------------------------|---------|----------------------------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|-----------------------------------|---------|---------------------------------|--------|
|                                                             |   | **International**                      |    | **North                    American Natural Gas**                                |   |                                                              |   |                              |    |                            |   |   |   |   |   |
|                                                             |   | Northwest                    Europe6   |    | North                    Africa/Near East                    7, 8, 9, 10, 11, 17 |   | Northern                    Latin America7,                    12 |   | Western                    Canada |    | U.S.                    Rockies |   | East                    Coast |   | Oil                    Sands13 |   | Total                    Conventional |   | Syncrude                    Mining Operation14 |   | Total |   |
|                                                             |   | Crude                    oil & NGL |    | Natural                    gas                                                   |   | Crude                    oil & NGL                            |   | Naturalgas                        |    | Natural                    gas  |   | Crude                    oil & NGL |   | Natural                    gas |   | Crude                    oil & NGL |   | Natural                    gas |   | Crude                    oil & NGL |   | Bitumen |   | Crude                    oil, NGL & bitumen |   | Synthetic                    crude oil |   | **Crude                    oil & equivalents** |   | **Natural                    gas** |   |
| **Beginning                    of year 2004**                    |   |                                   | **65**  |                                                                             |   | **126**                                                           |   |                              | **261** |                            |   | **65** |   |   | **324** |   |   | **41** |   |   | **2,030** |   |   | **-** |   |   | **-** |   |   | **71** |   |   | **28** |   |   | **466** |   |   | **330** |   |   | **796** |   |   | **2,545** |   |
| Revisions                    of previous estimates15             |   |                                   | 12      |                                                                             |   | 31                                                                |   |                              | 1       |                            |   | (18 | ) |   | (33 | ) |   | - |   |   | 16 |   |   | - |   |   | (14 | ) |   | 26 |   |   | (22 | ) |   | 17 |   |   | 12 |   |   | 29 |   |   | (18 | ) |
| Sale                    of                    reserves in place  |   |                                   | -       |                                                                             |   | (1                                                                | )      |                              | (6      | )                               |   | - |   |   | - |   |   | - |   |   | (1 | ) |   | - |   |   | - |   |   | - |   |   | - |   |   | (6 | ) |   | - |   |   | (6 | ) |   | (2 | ) |
| Purchase                    of reserves in place                 |   |                                   | 86      |                                                                             |   | 6                                                                 |   |                              | -       |                            |   | - |   |   | - |   |   | - |   |   | 7 |   |   | 6 |   |   | 109 |   |   | - |   |   | - |   |   | 92 |   |   | - |   |   | 92 |   |   | 122 |   |
| Discoveries,                    extensions and improved recovery |   |                                   | -       |                                                                             |   | -                                                                 |   |                              | -       |                            |   | - |   |   | - |   |   | 2 |   |   | 145 |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 2 |   |   | - |   |   | 2 |   |   | 145 |   |
| Production                                                       |   |                                   | (15     | )                                                                                |   | (31                                                               | )      |                              | (46     | )                               |   | (8 | ) |   | (26 | ) |   | (5 | ) |   | (247 | ) |   | - |   |   | (7 | ) |   | (29 | ) |   | (6 | ) |   | (101 | ) |   | (11 | ) |   | (112 | ) |   | (319 | ) |
| **End                    of year 2004**                          |   |                                   | **148** |                                                                             |   | **131**                                                           |   |                              | **210** |                            |   | **39** |   |   | **265** |   |   | **38** |   |   | **1,950** |   |   | **6** |   |   | **88** |   |   | **68** |   |   | **-** |   |   | **470** |   |   | **331** |   |   | **801** |   |   | **2,473** |   |
| Revisions                    of previous estimates15             |   |                                   | 2       |                                                                             |   | 4                                                                 |   |                              | 29      |                            |   | (14 | ) |   | - |   |   | 5 |   |   | (36 | ) |   | 2 |   |   | 22 |   |   | 68 |   |   | 8 |   |   | 114 |   |   | 20 |   |   | 134 |   |   | (24 | ) |
| Sale                    of                    reserves in place  |   |                                   | -       |                                                                             |   | -                                                                 |   |                              | -       |                            |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Purchase                    of reserves in place                 |   |                                   | 5       |                                                                             |   | 4                                                                 |   |                              | -       |                            |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 5 |   |   | - |   |   | 5 |   |   | 4 |   |
| Discoveries,                    extensions and improved recovery |   |                                   | -       |                                                                             |   | -                                                                 |   |                              | 3       |                            |   | - |   |   | - |   |   | 4 |   |   | 44 |   |   | - |   |   | - |   |   | 23 |   |   | - |   |   | 30 |   |   | - |   |   | 30 |   |   | 44 |   |
| Production                                                       |   |                                   | (12     | )                                                                                |   | (24                                                               | )      |                              | (42     | )                               |   | (9 | ) |   | (26 | ) |   | (5 | ) |   | (229 | ) |   | (1 | ) |   | (14 | ) |   | (27 | ) |   | (8 | ) |   | (95 | ) |   | (9 | ) |   | (104 | ) |   | (302 | ) |
| **End                    of year 2005**                          |   |                                   | **143** |                                                                             |   | **115**                                                           |   |                              | **200** |                            |   | **16** |   |   | **239** |   |   | **42** |   |   | **1,729** |   |   | **7** |   |   | **96** |   |   | **132** |   |   | **-** |   |   | **524** |   |   | **342** |   |   | **866** |   |   | **2,195** |   |
| **Proved                    undeveloped reserves****16**         |   |                                   |    |                                                                             |   |                                                              |   |                              |    |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Beginning                    of year 2004**                    |   |                                   | **-**   |                                                                             |   | **-**                                                             |   |                              | **36**  |                            |   | **-** |   |   | **190** |   |   | **1** |   |   | **82** |   |   | **-** |   |   | **-** |   |   | **16** |   |   | **17** |   |   | **70** |   |   | **165** |   |   | **235** |   |   | **272** |   |
| **End                    of year 2004**                          |   |                                   | **101** |                                                                             |   | **14**                                                            |   |                              | **21**  |                            |   | **-** |   |   | **178** |   |   | **1** |   |   | **82** |   |   | **2** |   |   | **24** |   |   | **19** |   |   | **-** |   |   | **144** |   |   | **189** |   |   | **333** |   |   | **298** |   |
| **End                    of year 2005**                          |   |                                   | **95**  |                                                                             |   | **14**                                                            |   |                              | **22**  |                            |   | **-** |   |   | **178** |   |   | **1** |   |   | **132** |   |   | **3** |   |   | **30** |   |   | **43** |   |   | **-** |   |   | **164** |   |   | **209** |   |   | **373** |   |   | **354** |   |

----

**PROVED          RESERVES AFTER ROYALTIES**
**1,          2, 3, 4, 5**

**(Crude          oil and equivalents in MMbbls; Natural gas in Bcf)**

|                                                             |   |                                   |    | **North                    America - Conventional**                              |   |                                                              |   |                              |    |                            |   |
|------------------------------------------------------------------|--------|----------------------------------------|---------|----------------------------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|-----------------------------------|---------|---------------------------------|--------|
|                                                             |   | **International**                      |    | **North                    American Natural Gas**                                |   |                                                              |   |                              |    |                            |   |   |   |   |   |
|                                                             |   | Northwest                    Europe6   |    | North                    Africa/Near East                    7, 8, 9, 10, 11, 17 |   | Northern                    Latin America7,                    12 |   | Western                    Canada |    | U.S.                    Rockies |   | East                    Coast |   | Oil                    Sands13 |   | Total                    Conventional |   | Syncrude                    Mining Operation14 |   | Total |   |
|                                                             |   | Crude                    oil & NGL |    | Natural                    gas                                                   |   | Crude                    oil & NGL                            |   | Natural                    gas    |    | Natural                    gas  |   | Crude                    oil & NGL |   | Natural                    gas |   | Crude                    oil & NGL |   | Natural                    gas |   | Crude                    oil & NGL |   | Bitumen |   | Crude                    oil, NGL & bitumen |   | Synthetic                    crude oil |   | **Crude                    oil & equivalents** |   | **Natural                    gas** |   |
| **Beginning                    of year 2004**                    |   |                                   | **64**  |                                                                             |   | **126**                                                           |   |                              | **169** |                            |   | **22** |   |   | **275** |   |   | **32** |   |   | **1,559** |   |   | **-** |   |   | **-** |   |   | **67** |   |   | **28** |   |   | **360** |   |   | **290** |   |   | **650** |   |   | **1,982** |   |
| Revisions                    of previous estimates15             |   |                                   | 13      |                                                                             |   | 31                                                                |   |                              | 3       |                            |   | (8 | ) |   | (32 | ) |   | - |   |   | 20 |   |   | - |   |   | (11 | ) |   | 21 |   |   | (22 | ) |   | 15 |   |   | 7 |   |   | 22 |   |   | - |   |
| Sale                    of reserves in place                     |   |                                   | -       |                                                                             |   | (1                                                                | )      |                              | (3      | )                               |   | - |   |   | - |   |   | - |   |   | (1 | ) |   | - |   |   | - |   |   | - |   |   | - |   |   | (3 | ) |   | - |   |   | (3 | ) |   | (2 | ) |
| Purchase                    of reserves in place                 |   |                                   | 86      |                                                                             |   | 6                                                                 |   |                              | -       |                            |   | - |   |   | - |   |   | - |   |   | 5 |   |   | 4 |   |   | 90 |   |   | - |   |   | - |   |   | 90 |   |   | - |   |   | 90 |   |   | 101 |   |
| Discoveries,                    extensions and improved recovery |   |                                   | -       |                                                                             |   | -                                                                 |   |                              | -       |                            |   | - |   |   | - |   |   | 2 |   |   | 113 |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 2 |   |   | - |   |   | 2 |   |   | 113 |   |
| Production                                                       |   |                                   | (15     | )                                                                                |   | (31                                                               | )      |                              | (25     | )                               |   | (1 | ) |   | (18 | ) |   | (4 | ) |   | (188 | ) |   | - |   |   | (6 | ) |   | (27 | ) |   | (6 | ) |   | (77 | ) |   | (10 | ) |   | (87 | ) |   | (244 | ) |
| **End                    of year 2004**                          |   |                                   | **148** |                                                                             |   | **131**                                                           |   |                              | **144** |                            |   | **13** |   |   | **225** |   |   | **30** |   |   | **1,508** |   |   | **4** |   |   | **73** |   |   | **61** |   |   | **-** |   |   | **387** |   |   | **287** |   |   | **674** |   |   | **1,950** |   |
| Revisions                    of previous estimates15             |   |                                   | 1       |                                                                             |   | 5                                                                 |   |                              | 28      |                            |   | (6 | ) |   | (1 | ) |   | 5 |   |   | (28 | ) |   | 7 |   |   | 18 |   |   | 57 |   |   | 8 |   |   | 106 |   |   | 9 |   |   | 115 |   |   | (12 | ) |
| Sale                    of reserves in place                     |   |                                   | -       |                                                                             |   | -                                                                 |   |                              | -       |                            |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Purchase                    of reserves in place                 |   |                                   | 5       |                                                                             |   | 3                                                                 |   |                              | -       |                            |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 5 |   |   | - |   |   | 5 |   |   | 3 |   |
| Discoveries,                    extensions and improved recovery |   |                                   | -       |                                                                             |   | -                                                                 |   |                              | 2       |                            |   | - |   |   | - |   |   | 3 |   |   | 34 |   |   | - |   |   | - |   |   | 20 |   |   | - |   |   | 25 |   |   | - |   |   | 25 |   |   | 34 |   |
| Production                                                       |   |                                   | (12     | )                                                                                |   | (24                                                               | )      |                              | (22     | )                               |   | (2 | ) |   | (21 | ) |   | (4 | ) |   | (175 | ) |   | (6 | ) |   | (12 | ) |   | (25 | ) |   | (8 | ) |   | (77 | ) |   | (9 | ) |   | (86 | ) |   | (234 | ) |
| **End                    of year 2005**                          |   |                                   | **142** |                                                                             |   | **115**                                                           |   |                              | **152** |                            |   | **5** |   |   | **203** |   |   | **34** |   |   | **1,339** |   |   | **5** |   |   | **79** |   |   | **113** |   |   | **-** |   |   | **446** |   |   | **287** |   |   | **733** |   |   | **1,741** |   |
| **Proved                    undeveloped reserves****16**         |   |                                   |    |                                                                             |   |                                                              |   |                              |    |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Beginning                    of year 2004**                    |   |                                   | **-**   |                                                                             |   | **-**                                                             |   |                              | **23**  |                            |   | **-** |   |   | **161** |   |   | **1** |   |   | **62** |   |   | **-** |   |   | **-** |   |   | **16** |   |   | **16** |   |   | **56** |   |   | **143** |   |   | **199** |   |   | **223** |   |
| **End                    of year 2004**                          |   |                                   | **101** |                                                                             |   | **14**                                                            |   |                              | **14**  |                            |   | **-** |   |   | **151** |   |   | **1** |   |   | **65** |   |   | **2** |   |   | **20** |   |   | **16** |   |   | **-** |   |   | **134** |   |   | **161** |   |   | **295** |   |   | **250** |   |
| **End                    of year 2005**                          |   |                                   | **95**  |                                                                             |   | **14**                                                            |   |                              | **15**  |                            |   | **-** |   |   | **151** |   |   | **1** |   |   | **99** |   |   | **3** |   |   | **25** |   |   | **33** |   |   | **-** |   |   | **147** |   |   | **173** |   |   | **320** |   |   | **289** |   |

----

----

**Standardized          Measure of Discounted Future Net Cash Flows and Changes Therein Relating          to          Proved Oil and Gas Reserves**

*Disclosures          About Oil and Gas Producing Activities*

**PRESENT          VALUE OF ESTIMATED FUTURE NET CASH FLOWS**

*(millions          of dollars)*

|                                                                           |   | **Western                      Canada****1**   |                                             | **U.S.                      Rockies**           |   | **East                      Coast Oil****2** |   |
|--------------------------------------------------------------------------------|--------|------------------------------------------------|--------------------------------------------------|-------------------------------------------------|--------|----------------------------------------------|--------|
|                                                                           |   | **2005**                                       |                                             | 2004                                            |   | 2003                                         |   | **2005** |   | 2004 |   | 2003 |   | **2005** |   | 2004 |   | 2003 |   |
| Future                      cash flows                                         |   | **$**                                          | **15,255**                                       |                                            | $      | 11,470                                       |   | $ | 10,382 |   | **$** | **1,058** |   |   | 688 |   |   | - |   | **$** | **7,746** |   | $ | 2,580 |   | $ | 2,470 |   |
| Future                      production, development and asset retirement costs |   |                                           | **(2,631**                                       | **)**                                           |   | (2,344                                       | )      |   | (2,290 | ) |   | **(402** | **)** |   | (281 | ) |   | - |   |   | **(1,314** | **)** |   | (786 | ) |   | (523 | ) |
| Future                      income taxes                                       |   |                                           | **(4,121**                                       | **)**                                           |   | (2,900                                       | )      |   | (2,517 | ) |   | **(245** | **)** |   | (110 | ) |   | - |   |   | **(1,993** | **)** |   | (467 | ) |   | (506 | ) |
| Future                      net cash flows                                     |   |                                           | **8,503**                                        |                                            |   | 6,226                                        |   |   | 5,575 |   |   | **411** |   |   | 297 |   |   | - |   |   | **4,439** |   |   | 1,327 |   |   | 1,441 |   |
| Discount                      of 10% for estimated timing of cash flows        |   |                                           | **(3,413**                                       | **)**                                           |   | (2,676                                       | )      |   | (2,407 | ) |   | **(168** | **)** |   | (118 | ) |   | - |   |   | **(1,164** | **)** |   | (285 | ) |   | (506 | ) |
| Discounted                      future net cash flows                          |   | **$**                                          | **5,090**                                        |                                            | $      | 3,550                                        |   | $ | 3,168 |   | **$** | **243** |   | $ | 179 |   | $ | - |   | **$** | **3,275** |   | $ | 1,042 |   | $ | 935 |   |
|                                                                           |   |                                           |                                             |                                            |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                           |   | **Northwest                        Europe**    | **North                      Africa/Near East**  | **Northern                      Latin America** |
|                                                                           |   |                                           | **2005**                                         |                                            |   | 2004                                         |   |   | 2003 |   |   | **2005** |   |   | 2004 |   |   | 2003 |   |   | **2005** |   |   | 2004 |   |   | 2003 |   |
| Future                      cash flows                                         |   | **$**                                          | **9,092**                                        |                                            | $      | 7,624                                        |   | $ | 3,370 |   | **$** | **8,984** |   | $ | 6,039 |   | $ | 5,278 |   | **$** | **1,737** |   | $ | 1,031 |   | $ | 1,348 |   |
| Future                      production, development and asset retirement costs |   |                                           | **(2,844**                                       | **)**                                           |   | (3,190                                       | )      |   | (1,341 | ) |   | **(800** | **)** |   | (981 | ) |   | (954 | ) |   | **(248** | **)** |   | (151 | ) |   | (147 | ) |
| Future                      income taxes                                       |   |                                           | **(3,227**                                       | **)**                                           |   | (1,682                                       | )      |   | (667 | ) |   | **(7,092** | **)** |   | (4,344 | ) |   | (3,719 | ) |   | **(813** | **)** |   | (479 | ) |   | (647 | ) |
| Future                      net cash flows                                     |   |                                           | **3,021**                                        |                                            |   | 2,752                                        |   |   | 1,362 |   |   | **1,092** |   |   | 714 |   |   | 605 |   |   | **676** |   |   | 401 |   |   | 554 |   |
| Discount                      of 10% for estimated timing of cash flows        |   |                                           | **(859**                                         | **)**                                           |   | (929                                         | )      |   | (293 | ) |   | **(392** | **)** |   | (271 | ) |   | (242 | ) |   | **(305** | **)** |   | (188 | ) |   | (279 | ) |
| Discounted                      future net cash flows                          |   | **$**                                          | **2,162**                                        |                                            | $      | 1,823                                        |   | $ | 1,069 |   | **$** | **700** |   | $ | 443 |   | $ | 363 |   | **$** | **371** |   | $ | 213 |   | $ | 275 |   |
|                                                                           |   |                                           |                                             |                                            |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                           |   | **Continuing                      Operations** | **Discontinued                      Operations** | **Total**                                       |
|                                                                           |   |                                           | **2005**                                         |                                            |   | 2004                                         |   |   | 2003 |   |   | **2005** |   |   | 2004 |   |   | 2003 |   |   | **2005** |   |   | 2004 |   |   | 2003 |   |
| Future                      cash flows                                         |   | **$**                                          | **43,872**                                       |                                            | $      | 29,432                                       |   | $ | 22,848 |   | **$** | **1,008** |   | $ | 1,038 |   | $ | 1,415 |   | **$** | **44,880** |   | $ | 30,470 |   | $ | 24,263 |   |
| Future                      production, development and asset retirement costs |   |                                           | **(8,239**                                       | **)**                                           |   | (7,733                                       | )      |   | (5,255 | ) |   | **(336** | **)** |   | (453 | ) |   | (482 | ) |   | **(8,575** | **)** |   | (8,186 | ) |   | (5,737 | ) |
| Future                      income taxes                                       |   |                                           | **(17,491**                                      | **)**                                           |   | (9,982                                       | )      |   | (8,056 | ) |   | **(244** | **)** |   | (219 | ) |   | (369 | ) |   | **(17,735** | **)** |   | (10,201 | ) |   | (8,425 | ) |
| Future                      net cash flows                                     |   |                                           | **18,142**                                       |                                            |   | 11,717                                       |   |   | 9,537 |   |   | **428** |   |   | 366 |   |   | 564 |   |   | **18,570** |   |   | 12,083 |   |   | 10,101 |   |
| Discount                      of 10% for estimated timing of cash flows        |   |                                           | **(6,301**                                       | **)**                                           |   | (4,467                                       | )      |   | (3,727 | ) |   | **(81** | **)** |   | (84 | ) |   | (158 | ) |   | **(6,382** | **)** |   | (4,551 | ) |   | (3,885 | ) |
| Discounted                      future net cash flows                          |   | **$**                                          | **11,841**                                       |                                            | $      | 7,250                                        |   | $ | 5,810 |   | **$** | **347** |   | $ | 282 |   | $ | 406 |   | **$** | **12,188** |   | $ | 7,532 |   | $ | 6,216 |   |

| 1 | Western                    Canada includes the cash flows of MacKay River in 2003. There                    were no                    proved reserves at MacKay River at year-end 2004 and                    2005. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**SUMMARY          OF CHANGES IN PRESENT VALUE OF ESTIMATED FUTURE CASH FLOWS**

*(millions          of dollars)*

|                                                                                                           | **2005** |   |  2004 |   |  2003 |   |
|----------------------------------------------------------------------------------------------------------------|----------|--------|------------|--------|------------|--------|
| **Balance                      at beginning of year**                                                          |     | **$**  | **7,532**  |   | $          | 6,216  |   | $ | 7,022 |   |
| **Changes                      result from:**                                                                  |     |   |       |   |       |   |   |   |   |   |
| Sales                      and transfers of oil and gas produced, net of production                      costs |     |   | **(5,273** | **)**  |       | (4,348 | ) |   | (4,062 | ) |
| Net                      changes in prices, operating costs and royalties                                      |     |   | **9,013**  |   |       | 2,482  |   |   | (1,608 | ) |
| Extensions,                      discoveries, additions and improved recoveries                                |     |   | **1,383**  |   |       | 395    |   |   | 274 |   |
| Changes                      in estimated future development costs                                             |     |   | **(758**   | **)**  |       | (1,235 | ) |   | (767 | ) |
| Development                      costs incurred during the year                                                |     |   | **900**    |   |       | 966    |   |   | 845 |   |
| Revisions                      of previous quantity estimates                                                  |     |   | **3,328**  |   |       | 979    |   |   | 1,149 |   |
| Accretion                      of discount                                                                     |     |   | **1,374**  |   |       | 1,117  |   |   | 910 |   |
| Net                      change in income tax                                                                  |     |   | **(4,711** | **)**  |       | (1,186 | ) |   | 1,843 |   |
| Purchase                      and sale of reserves in place                                                    |     |   | **246**    |   |       | 2,017  |   |   | 313 |   |
| Changes                      in timing and other                                                               |     |   | **(846**   | **)**  |       | 129    |   |   | 297 |   |
| Net                      change                                                                                |     |   | **4,656**  |   |       | 1,316  |   |   | (806 | ) |
| **Balance                      at end of year**                                                                |     | **$**  | **12,188** |   | $          | 7,532  |   | $ | 6,216 |   |

***Abandonments          and Reclamation Costs***

**PRODUCTIVE          WELLS**
**1**

**          AT DECEMBER 31, 2005**

|                                                                                            |   | **Crude                    Oil Wells** |      | **Natural                    Gas Wells** |   | **Total                    Wells** |   |
|-------------------------------------------------------------------------------------------------|--------|----------------------------------------|-----------|------------------------------------------|--------|------------------------------------|--------|
|                                                                                            |   | **Gross****2**                         |      | **Net****3**                             |   | **Gross**                          |   | **Net** |   | **Gross** |   | **Net** |   |
| **North                    America**                                                            |   |                                   |      |                                     |   |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| North                    American Natural Gas                                                   |   |                                   | **855**   |                                     |   | **680**                            |   |   | **4,405** |   |   | **2,998** |   |   | **5,260** |   |   | **3,678** |   |
| East                    Coast Oil - conventional oil and gas                                    |   |                                   | **82**    |                                     |   | **20**                             |   |   | **-** |   |   | **-** |   |   | **82** |   |   | **20** |   |
| Oil                    Sands - *in                    situ*                    bitumen recovery |   |                                   | **35**    |                                     |   | **34**                             |   |   | **-** |   |   | **-** |   |   | **35** |   |   | **34** |   |
| Total                    North America                                                          |   |                                   | **972**   |                                     |   | **734**                            |   |   | **4,405** |   |   | **2,998** |   |   | **5,377** |   |   | **3,732** |   |
| **International**                                                                               |   |                                   |      |                                     |   |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Northwest                    Europe - conventional oil and gas                                  |   |                                   | **36**    |                                     |   | **15**                             |   |   | **32** |   |   | **6** |   |   | **68** |   |   | **21** |   |
| North                    Africa/Near East - conventional oil and gas                            |   |                                   | **235**   |                                     |   | **108**                            |   |   | **-** |   |   | **-** |   |   | **235** |   |   | **108** |   |
| Northern                    Latin America - natural gas                                         |   |                                   | **-**     |                                     |   | **-**                              |   |   | **7** |   |   | **1** |   |   | **7** |   |   | **1** |   |
| Total                    International                                                          |   |                                   | **271**   |                                     |   | **123**                            |   |   | **39** |   |   | **7** |   |   | **310** |   |   | **130** |   |
| **Total                    productive wells from continuing operations**                        |   |                                   | **1,243** |                                     |   | **857**                            |   |   | **4,444** |   |   | **3,005** |   |   | **5,687** |   |   | **3,862** |   |
| **Discontinued                    operations**                                                  |   |                                   | **327**   |                                     |   | **115**                            |   |   | **-** |   |   | **-** |   |   | **327** |   |   | **115** |   |
| **Total                    productive wells**                                                   |   |                                   | **1,570** |                                     |   | **972**                            |   |   | **4,444** |   |   | **3,005** |   |   | **6,014** |   |   | **3,977** |   |

| 1 | Wells                    with multiple completions are counted as one well. |
|---|-----------------------------------------------------------------------------|

| 2 | Gross                    wells are wells in which Petro-Canada owns a working interest. |
|---|-----------------------------------------------------------------------------------------|

| 3 | Net                    wells are the sums of the fractional working interests owned                    by                    Petro-Canada in gross wells, rounded to the nearest whole number. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Oil          and Natural Gas Rights**

**OIL          AND GAS RIGHTS AT DECEMBER 31, 2005**

|                                                    |   | Developed                    Lands1 |    | Undeveloped                    Lands1 |   | Total    |   |
|---------------------------------------------------------|--------|-------------------------------------|---------|---------------------------------------|--------|----------|--------|
|                                                    |   | **2005**                            |    | 2004                                  |   | **2005** |   | 2004 |   | **2005** |   | 2004 |   |
| *(millions                    of acres)*                |   | **Gross****2**                      |    | **Net****3**                          |   | Gross2   |   | Net3 |   | **Gross****2** |   | **Net****3** |   | Gross2 |   | Net3 |   | **Gross****2** |   | **Net****3** |   | Gross2 |   | Net3 |   |
| **Canada**                                              |   |                                |    |                                  |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mainland                    Canada                      |   |                                | **2.1** |                                  |   | **1.2**  |   |   | 2.1 |   |   | 1.1 |   |   | **3.1** |   |   | **2.6** |   |   | 3.9 |   |   | 2.9 |   |   | **5.2** |   |   | **3.8** |   |   | 6.0 |   |   | 4.0 |   |
| Oil                    Sands                            |   |                                | **0.4** |                                  |   | **0.2**  |   |   | 0.3 |   |   | 0.1 |   |   | **0.3** |   |   | **0.2** |   |   | 0.3 |   |   | 0.1 |   |   | **0.7** |   |   | **0.4** |   |   | 0.6 |   |   | 0.2 |   |
| East                    Coast Oil offshore              |   |                                | **0.1** |                                  |   | **-**    |   |   | 0.1 |   |   | - |   |   | **2.4** |   |   | **0.9** |   |   | 3.5 |   |   | 1.2 |   |   | **2.5** |   |   | **0.9** |   |   | 3.6 |   |   | 1.2 |   |
| Other                    frontier4                      |   |                                | **-**   |                                  |   | **-**    |   |   | - |   |   | - |   |   | **9.0** |   |   | **7.1** |   |   | 7.7 |   |   | 6.2 |   |   | **9.0** |   |   | **7.1** |   |   | 7.7 |   |   | 6.2 |   |
| **Total                    Canada**                     |   |                                | **2.6** |                                  |   | **1.4**  |   |   | 2.5 |   |   | 1.2 |   |   | **14.8** |   |   | **10.8** |   |   | 15.4 |   |   | 10.4 |   |   | **17.4** |   |   | **12.2** |   |   | 17.9 |   |   | 11.6 |   |
| **United                    States**                    |   |                                | **0.1** |                                  |   | **-**    |   |   | - |   |   | - |   |   | **2.4** |   |   | **1.4** |   |   | 1.2 |   |   | 1.1 |   |   | **2.5** |   |   | **1.4** |   |   | 1.2 |   |   | 1.1 |   |
| **International**                                       |   |                                |    |                                  |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| North                    Africa/Near East               |   |                                | **0.4** |                                  |   | **0.2**  |   |   | 0.4 |   |   | 0.2 |   |   | **25.8** |   |   | **20.0** |   |   | 10.0 |   |   | 6.7 |   |   | **26.2** |   |   | **20.2** |   |   | 10.4 |   |   | 6.9 |   |
| Northwest                    Europe                     |   |                                | **0.1** |                                  |   | **-**    |   |   | 0.1 |   |   | - |   |   | **2.4** |   |   | **1.0** |   |   | 2.2 |   |   | 0.8 |   |   | **2.5** |   |   | **1.0** |   |   | 2.3 |   |   | 0.8 |   |
| Northern                    Latin America               |   |                                | **0.1** |                                  |   | **-**    |   |   | - |   |   | - |   |   | **1.2** |   |   | **1.0** |   |   | 0.2 |   |   | - |   |   | **1.3** |   |   | **1.0** |   |   | 0.2 |   |   | - |   |
| **Total                    International**              |   |                                | **0.6** |                                  |   | **0.2**  |   |   | 0.5 |   |   | 0.2 |   |   | **29.4** |   |   | **22.0** |   |   | 12.4 |   |   | 7.5 |   |   | **30.0** |   |   | **22.2** |   |   | 12.9 |   |   | 7.7 |   |
| **Total                    from continuing operations** |   |                                | **3.3** |                                  |   | **1.6**  |   |   | 3.0 |   |   | 1.4 |   |   | **46.6** |   |   | **34.2** |   |   | 29.0 |   |   | 19.0 |   |   | **49.9** |   |   | **35.8** |   |   | 32.0 |   |   | 20.4 |   |
| **Discontinued                    operations**          |   |                                | **0.5** |                                  |   | **0.2**  |   |   | 0.5 |   |   | 0.2 |   |   | **-** |   |   | **-** |   |   | - |   |   | - |   |   | **0.5** |   |   | **0.2** |   |   | 0.5 |   |   | 0.2 |   |
| **Total**                                               |   |                                | **3.8** |                                  |   | **1.8**  |   |   | 3.5 |   |   | 1.6 |   |   | **46.6** |   |   | **34.2** |   |   | 29.0 |   |   | 19.0 |   |   | **50.4** |   |   | **36.0** |   |   | 32.5 |   |   | 20.6 |   |

| 1 | Developed                    lands are areas capable of production, while undeveloped lands                    are areas                    with rights to explore. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Gross                    acres include the interests of others. |
|---|-----------------------------------------------------------------|

| 3 | Net                    acres exclude the interests of others. |
|---|---------------------------------------------------------------|

| 4 | Includes                    lands located off the west coast of Canada where exploration                    is currently                    under moratorium. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Work          Commitments***

**WORK          COMMITMENTS AS AT DECEMBER 31, 2005**

*(millions          of dollars)*

|                                                                       |   | Petro-Canada                      Share of Total Work Commitments |      | Petro-Canada                      Share of Total Work Commitments to be Incurred in 20061 |
|----------------------------------------------------------------------------|--------|-------------------------------------------------------------------|-----------|-------------------------------------------------------------------------------------------|
| **Mainland                      Canada**                                   |   |                                                                   |           |                                                                                           |  |   |
| Mackenzie                      Delta/Corridor region                       |   | **$**                                                             | **14.3**  |                                                                                      | $ | - |
| **East                      Coast offshore**                               |   |                                                              | **18.1**  |                                                                                      |   | - |
| **International**                                                          |   |                                                              |      |                                                                                      |   |   |
| Northern                      Latin America                                |   |                                                              | **83.9**  |                                                                                      |   | 4.4 |
| Northwest                      Europe                                      |   |                                                              | **25.3**  |                                                                                      |   | 25.3 |
| North                      Africa/Near East                                |   |                                                              | **8.1**   |                                                                                      |   | 8.1 |
| **Total                      work commitments from continuing operations** |   |                                                              | **149.7** |                                                                                      |   | 37.8 |
| **Discontinued                      operations**                           |   |                                                              | **11.8**  |                                                                                      |   | 5.9 |
| **Total                      work commitments**                            |   | **$**                                                             | **161.5** |                                                                                      | $ | 43.7 |

| 1 | Capital                    expenditure plans for 2006 include provisions for these work                    commitments. |
|---|-------------------------------------------------------------------------------------------------------------------------|

----

**Land          Expiries**

**LAND          EXPIR**
**IES          IN 2006**

*(millions          of acres)*

|                                              | Gross1 | Net2 |
|---------------------------------------------------|--------|------|
| **North                    American Natural Gas** | 0.9    | 0.7  |
| **East                    Coast Oil**             | 0.5    | 0.2  |
| **Oil                    Sands**                  | 0.2    | 0.1  |
| **International**                                 | 0.5    | 0.2  |
| **Total                    expiries in 2006**     | 2.1    | 1.2  |

| 1 | Gross                    acres include the interests of others. |
|---|-----------------------------------------------------------------|

| 2 | Net                    acres exclude the interests of others. |
|---|---------------------------------------------------------------|

----

***Drilling          Activity***

**EXPLORATION          AND DEVELOPMENT WELLS DRILLED**

|                                                              |   | **2005**       |    | 2004         |   | 2003    |   |
|-------------------------------------------------------------------|--------|----------------|---------|--------------|--------|---------|--------|
|                                                              |   | **Gross****1** |    | **Net****2** |   | Gross1  |   | Net2 |   | Gross1 |   | Net2 |   |
| **NORTH                    AMERICAN NATURAL GAS**                 |   |           |    |         |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Western                    Canada and U.S. Rockies**            |   |           |    |         |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exploration                    wells3                             |   |           |    |         |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Oil                                                               |   |           | **-**   |         |   | **-**   |   |   | 2 |   |   | - |   |   | - |   |   | - |   |
| Natural                    gas                                    |   |           | **48**  |         |   | **31**  |   |   | 53 |   |   | 35 |   |   | 24 |   |   | 17 |   |
| Dry4                                                              |   |           | **21**  |         |   | **15**  |   |   | 19 |   |   | 14 |   |   | 20 |   |   | 16 |   |
| Subtotal                                                          |   |           | **69**  |         |   | **46**  |   |   | 74 |   |   | 49 |   |   | 44 |   |   | 33 |   |
| Development                    wells5                             |   |           |    |         |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Oil                                                               |   |           | **4**   |         |   | **2**   |   |   | 5 |   |   | 2 |   |   | 9 |   |   | 2 |   |
| Natural                    gas                                    |   |           | **666** |         |   | **437** |   |   | 589 |   |   | 461 |   |   | 388 |   |   | 231 |   |
| Dry                                                               |   |           | **4**   |         |   | **3**   |   |   | 7 |   |   | 5 |   |   | 17 |   |   | 14 |   |
| Subtotal                                                          |   |           | **674** |         |   | **442** |   |   | 601 |   |   | 468 |   |   | 414 |   |   | 247 |   |
| **Mackenzie                    Delta/Corridor and Scotian Slope** |   |           |    |         |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exploration                    wells3                             |   |           |    |         |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Suspended                                                         |   |           | **-**   |         |   | **-**   |   |   | - |   |   | - |   |   | 1 |   |   | 1 |   |
| Subtotal                                                          |   |           | **-**   |         |   | **-**   |   |   | - |   |   | - |   |   | 1 |   |   | 1 |   |
| **Total                    North American Natural Gas**           |   |           | **743** |         |   | **488** |   |   | 675 |   |   | 517 |   |   | 459 |   |   | 281 |   |
| **EAST                    COAST OIL**                             |   |           |    |         |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exploration                    wells3                             |   |           |    |         |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Oil                                                               |   |           | **2**   |         |   | **1**   |   |   | - |   |   | - |   |   | 1 |   |   | - |   |
| Dry4                                                              |   |           | **-**   |         |   | **-**   |   |   | - |   |   | - |   |   | 2 |   |   | 1 |   |
| Subtotal                                                          |   |           | **2**   |         |   | **1**   |   |   | - |   |   | - |   |   | 3 |   |   | 1 |   |
| Development                    wells5                             |   |           |    |         |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Oil                                                               |   |           | **13**  |         |   | **3**   |   |   | 17 |   |   | 4 |   |   | 11 |   |   | 3 |   |
| Dry                                                               |   |           | **-**   |         |   | **-**   |   |   | - |   |   | - |   |   | 1 |   |   | - |   |
| Subtotal                                                          |   |           | **13**  |         |   | **3**   |   |   | 17 |   |   | 4 |   |   | 12 |   |   | 3 |   |
| **Total                    East Coast Oil**                       |   |           | **15**  |         |   | **4**   |   |   | 17 |   |   | 4 |   |   | 15 |   |   | 4 |   |
| **OIL                    SANDS**                                  |   |           |    |         |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Development                    wells5                             |   |           |    |         |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Bitumen                                                           |   |           | **46**  |         |   | **46**  |   |   | - |   |   | - |   |   | - |   |   | - |   |
| **Total                    Oil Sands**                            |   |           | **46**  |         |   | **46**  |   |   | - |   |   | - |   |   | - |   |   | - |   |

----

**EXPLORATION          AND DEVELOPMENT WELLS DRILLED **

|                                                                  |   | **2005**       |    | 2004         |   | 2003    |   |
|-----------------------------------------------------------------------|--------|----------------|---------|--------------|--------|---------|--------|
|                                                                  |   | **Gross****1** |    | **Net****2** |   | Gross1  |   | Net2 |   | Gross1 |   | Net2 |   |
| **INTERNATIONAL                    - Continuing Operations**          |   |           |    |         |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exploration                    wells3                                 |   |           |    |         |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Oil                                                                   |   |           |    |         |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Northwest                    Europe                                   |   |           | **4**   |         |   | **3**   |   |   | - |   |   | - |   |   | - |   |   | - |   |
| North                    Africa/Near East                             |   |           | **2**   |         |   | **1**   |   |   | 2 |   |   | 1 |   |   | - |   |   | - |   |
| Natural                    gas                                        |   |           |    |         |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Northwest                    Europe                                   |   |           | **-**   |         |   | **-**   |   |   | - |   |   | - |   |   | 1 |   |   | - |   |
| Northern                    Latin America                             |   |           | **-**   |         |   | **-**   |   |   | 1 |   |   | - |   |   | 1 |   |   | - |   |
| Dry4                                                                  |   |           |    |         |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Northwest                    Europe                                   |   |           | **-**   |         |   | **-**   |   |   | 4 |   |   | 1 |   |   | 2 |   |   | 1 |   |
| North                    Africa/Near East                             |   |           | **4**   |         |   | **2**   |   |   | 1 |   |   | 1 |   |   | - |   |   | - |   |
| Subtotal                                                              |   |           | **10**  |         |   | **6**   |   |   | 8 |   |   | 3 |   |   | 4 |   |   | 1 |   |
| Development                    wells5                                 |   |           |    |         |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Oil                                                                   |   |           |    |         |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Northwest                    Europe                                   |   |           | **4**   |         |   | **1**   |   |   | 9 |   |   | 7 |   |   | 7 |   |   | 4 |   |
| North                    Africa/Near East                             |   |           | **7**   |         |   | **4**   |   |   | 6 |   |   | 3 |   |   | 6 |   |   | 3 |   |
| Natural                    gas                                        |   |           |    |         |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Northwest                    Europe                                   |   |           | **1**   |         |   | **-**   |   |   | 1 |   |   | - |   |   | 1 |   |   | - |   |
| Northern                    Latin America                             |   |           | **-**   |         |   | **-**   |   |   | - |   |   | - |   |   | 3 |   |   | 1 |   |
| Dry                                                                   |   |           |    |         |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Northwest                    Europe                                   |   |           | **-**   |         |   | **-**   |   |   | 1 |   |   | - |   |   | 4 |   |   | 3 |   |
| Northern                    Latin America                             |   |           | **-**   |         |   | **-**   |   |   | 1 |   |   | - |   |   | 1 |   |   | - |   |
| Subtotal                                                              |   |           | **12**  |         |   | **5**   |   |   | 18 |   |   | 10 |   |   | 22 |   |   | 11 |   |
| **Total                    International**                            |   |           | **22**  |         |   | **11**  |   |   | 26 |   |   | 13 |   |   | 26 |   |   | 12 |   |
| **Total                    wells drilled from continuing operations** |   |           | **826** |         |   | **549** |   |   | 718 |   |   | 534 |   |   | 500 |   |   | 297 |   |
| **DISCONTINUED                    OPERATIONS**                        |   |           |    |         |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exploration                    wells3                                 |   |           |    |         |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Oil                                                                   |   |           | **-**   |         |   | **-**   |   |   | - |   |   | - |   |   | 1 |   |   | - |   |
| Development                    wells5                                 |   |           |    |         |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Oil                                                                   |   |           | **44**  |         |   | **15**  |   |   | 39 |   |   | 13 |   |   | 40 |   |   | 14 |   |
| Dry                                                                   |   |           | **5**   |         |   | **2**   |   |   | 9 |   |   | 4 |   |   | 5 |   |   | 2 |   |
| **Total                    discontinued operations**                  |   |           | **49**  |         |   | **17**  |   |   | 48 |   |   | 17 |   |   | 46 |   |   | 16 |   |
| **Total                    wells drilled**                            |   |           | **875** |         |   | **566** |   |   | 766 |   |   | 551 |   |   | 546 |   |   | 313 |   |

| 1 | Gross                    wells are wells, excluding all service wells, in which Petro-Canada                    owns a                    working interest. Gross wells include GOR wells. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Net                    wells are the sum of the fractional working interests owned by                    Petro-Canada in gross wells, rounded to the nearest whole number.                    Net                    wells exclude GOR wells. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | Exploration                    wells are wells drilled to find and produce oil or natural gas                    in an                    unproved area, to find a new reservoir or to extend the known                    boundaries                    of a previously discovered reservoir. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4 | A                    dry                    hole is an exploration or development well found to be incapable                    of                    producing either oil or natural gas in sufficient quantities                    to justify                    completion as an oil or natural gas well. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5 | Development                    wells are wells drilled in an oil or natural gas reservoir to                    the depth of                    a stratigraphic horizon known to be productive. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Downstream**

***Business            Summary and Strategy***

| §   | achieving                    and maintaining first quartile operating performance in all                    areas; |
|--------------------|--------------------------------------------------------------------------------------------------------------------|

| §   | advancing                    Petro-Canada as the “brand of choice” for Canadian gasoline consumers;                    and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------|

| §   | increasing                    sales of high-margin specialty                    lubricants. |
|--------------------|---------------------------------------------------------------------------------------------|

***Refining          and Supply***

----

**RATED          CAPACITY OF REFINERIES AND AVERAGE DAILY CRUDE OIL          PROCESSED**

*(thousands          of m*
*3*

*)*

|                                     |   | Average                    Volumes ofCrude                    Oil Processed/Calendar Day |     | Daily                    Rated Capacity1 |   |
|------------------------------------------|--------|------------------------------------------------------------------------------------------|----------|------------------------------------------|--------|
|                                     |   | Years                    Ended December 31,                                              |     |                                     |   |
| **Refinery                    Location** |   | **2005**                                                                                 |     | 2004                                     |   | 2003 |   | **As                    at December 31, 2005** |   |
| Edmonton,                    Alberta     |   |                                                                                     | **20.8** |                                     |   | 19.6 |   |   | 19.8 |   |   | **19.9** |   |
| Montreal,                    Quebec2     |   |                                                                                     | **18.1** |                                     |   | 16.0 |   |   | 16.8 |   |   | **20.6** |   |
| Oakville,                    Ontario3    |   |                                                                                     | **2.0**  |                                     |   | 12.6 |   |   | 13.3 |   |   | **-** |   |
| **Total**                                |   |                                                                                     | **40.9** |                                     |   | 48.2 |   |   | 49.9 |   |   | **40.5** |   |

***Edmonton          Refinery***

***Montreal          Refinery***

----

**Oakville          Refinery**

***Supply***

***Distribution***

***Sales          and Marketing***

----

**AVERAGE          DAILY SALES OF PETROLEUM PRODUCTS**

*(thousands          of m*
*3*

*/d)*

|                                   |   | Years                    Ended December 31, |     |
|----------------------------------------|--------|---------------------------------------------|----------|
|                                   |   | **2005**                                    |     | 2004 |   | 2003 |   |
| Gasoline1                              |   |                                        | **24.4** |   |   | 24.7 |   |   | 25.8 |   |
| Middle                    distillates2 |   |                                        | **19.7** |   |   | 20.2 |   |   | 20.5 |   |
| Other3                                 |   |                                        | **8.7**  |   |   | 11.7 |   |   | 10.5 |   |
| **Total**                              |   |                                        | **52.8** |   |   | 56.6 |   |   | 56.8 |   |

| 1 | Includes                    motor and aviation gasolines. |
|---|-----------------------------------------------------------|

| 2 | Includes                    diesel oils, heating oils and aviation jet fuels. |
|---|-------------------------------------------------------------------------------|

| 3 | Includes                    heavy fuel oils, asphalts, lubricants, liquefied petroleum gases,                    petrochemical feedstock and other petroleum and non-petroleum                    products. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**REFINING          AND MARKETING REVENUES**

*(millions          of dollars) *

|                                   |   | Years                    Ended December 31, |       |
|----------------------------------------|--------|---------------------------------------------|------------|
|                                   |   | **2005**                                    |       | 2004 |   | 2003 |   |
| Gasoline1                              |   | **$**                                       | **5,027**  |   | $ | 4,218 |   | $ | 3,726 |   |
| Middle                    distillates2 |   |                                        | **4,244**  |   |   | 3,262 |   |   | 2,761 |   |
| Other3                                 |   |                                        | **2,081**  |   |   | 1,954 |   |   | 1,665 |   |
| **Total**                              |   | **$**                                       | **11,352** |   | $ | 9,434 |   | $ | 8,152 |   |

| 2 | Includes                    diesel oils, heating oils and aviation jet fuels. |
|---|-------------------------------------------------------------------------------|

| 3 | Includes                    heavy fuel oils, asphalts, lubricants, liquefied petroleum gases,                    petrochemical feedstock and other petroleum and non-petroleum                    products. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Retail***

----

***Wholesale          and Refinery Sales***

***Lubricants***

***Pipelines***

----

***Link          to Petro-Canada’s Corporate and Strategic          Priorities***

|                                                                                                              | **2005                    PROGRESS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | **2006                    GOALS**                                                                                                                                                                                                                                                                                                                                                                               |
|-------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **DELIVERING                    PROFITABLE GROWTH WITH A FOCUS ON OPERATED, LONG-LIFE                    ASSETS** | §  completed                    Eastern Canada consolidation;§  initiated                    detailed engineering of Edmonton refinery conversion to synthetic                    crude                    diet; and§  acquired                    51% interest in a paraxylene facility adjacent to the Montreal                    refinery.                                                                                                                                                                                                | §  progress                    Edmonton refinery feed conversion project for completion in                    2008;§  conduct                    Montreal coker feasibility study for decision in 2007;§  de-bottleneck                    Lubricants plant; and§  continue                    to make refinery yield and reliability improvements. |
| **DRIVING                    FOR FIRST QUARTILE OPERATION OF OUR ASSETS**                                         | §  improved                    the Downstream plant reliability index score by more than                    16%;§  achieved                    leading share of retail major urban market; and§  increased                    sales of high-margin lubricants.                                                                                                                                                                                                                                                                                | §  continue                    to focus on safety, and refinery operating and maintenance                    procedures;§  increase                    retail non-petroleum revenue; and§  achieve                    75% high-margin lubricants sales mix.                                                                                                        |
| **CONTINUING                    TO WORK AT BEING A RESPONSIBLE COMPANY**                                          | §  reduced                    total recordable injury frequency by 51% compared to 2004;§  surpassed                    four million hours of work without a lost-time injury on the                    Edmonton                    Diesel Desulphurization Project;§  reduced                    community complaints by 57% compared to 2004;§  invested                    into producing cleaner-burning fuels; and§  reduced                    regulatory compliance exceedances by 59% compared to 2004. | §  maintain                    focus on total recordable injury frequency and regulatory compliance                    exceedances in 2006;§  produce                    ultra-low sulphur diesel; and§  meet                    provincial ethanol regulations.                                                                                                   |

----

**Research          and Development**

**Human          Resources**

**Social          and Environmental Policies**

| 1 | Petro-Canada’s                    TLM framework is a systematic approach to clearly and consistently                    identify management systems and processes required to control                    risk. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**CASH          AND IN-KIND CONTRIBUTIONS OF NEARLY $7.2 MILLION IN 2005**

***Highlights***

----

**Environmental          Expenditures**

**ENVIRONMENTAL          COSTS - YEAR ENDED DECEMBER 31, 2005**

*(millions          of dollars)*

|                                             |   | **Capital** | ** ** | **Operating                    Expense** | ** ** | **Total** |   |
|--------------------------------------------------|--------|-------------|------------|------------------------------------------|------------|-----------|--------|
| Upstream                                         |   | **$**       | **71**     |                                     | **$**      | **95**    |   | **$** | **166** |   |
| Downstream                                       |   |        | **625**    |                                     |       | **65**    |   |   | **690** |   |
| **Total                    environmental costs** |   | **$**       | **696**    |                                     | **$**      | **160**   |   | **$** | **856** |   |

----

**SELECT          FINANCIAL **
**DATA**

**CONSOLIDATED          FINANCIAL INFORMATION**

|                                                                                                                                                          |        | Years                      Ended December 31, |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------|
|  *(millions                    of dollars, except per share1 amounts)*                                                                                   |   | **2005**                                      | 2004 | 2003 |
| **Statement                      of earnings data**                                                                                                           |   |                                          |   |   |   |   |   |   |  |  |
| Revenue                                                                                                                                                       |   |                                          |   |   |   |   |   |   |  |  |
| Operating                                                                                                                                                     |   | **$**                                         | **17,585** |   | $ | 14,270 |   | $ | 12,392 |  |
| Investment                      and other income                                                                                                              |   |                                          | **(806** | **)** |   | (312 | ) |   | 16 |  |
| Total                      revenue                                                                                                                            |   |                                          | **16,779** |   |   | 13,958 |   |  | 12,408 |  |
| Earnings                      from continuing operations before income taxes                                                                                  |   |                                          | **3,402** |   |   | 3,090 |   |  | 2,725 |  |
| Provision                      for income taxes                                                                                                               |   |                                          | **1,709** |   |   | 1,392 |   |   | 1,190 |  |
| Net                      earnings from continuing operations                                                                                                  |   |                                          | **1,693** |   |   | 1,698 |   |  | 1,535 |  |
| Net                      earnings from discontinued operations                                                                                                |   |                                          | **98** |   |   | 59 |   |  | 115 |  |
| Net                      earnings                                                                                                                             |   | **$**                                         | **1,791** |   | $ | 1,757 |   | $ | 1,650 |  |
|                                                                                                                                                          |   |                                          |   |   |   |   |   |   |  |  |
| **Earnings**                                                                                                                                                  |   |                                          |   |   |   |   |   |   |  |  |
| North                      American Natural Gas                                                                                                               |   | **$**                                         | **660** |   | $ | 500 |   | $ | 459 |  |
| East                      Coast Oil                                                                                                                           |   |                                          | **775** |   |   | 711 |   |  | 597 |  |
| Oil                      Sands                                                                                                                                |   |                                          | **112** |   |   | 120 |   |  | (52) |  |
| International                                                                                                                                                 |   |                                          | **453** |   |   | 313 |   |  | 182 |  |
| Downstream                                                                                                                                                    |   |                                          | **398** |   |   | 310 |   |  | 263 |  |
| Shared                      Services                                                                                                                          |   |                                          | **(250** | **)** |   | (125 | ) |  | (182) |  |
| Operating                      earnings from continuing operations2,                      3                                                                   |   |                                          | **2,148** |   |   | 1,829 |   |  | 1,267 |  |
| Foreign                      currency translation gain                                                                                                        |   |                                          | **73** |   |   | 63 |   |  | 239 |  |
| Unrealized                      loss on Buzzard derivative contracts                                                                                          |   |                                          | **(562** | **)** |   | (205 | ) |  | - |  |
| Gain                      on sale of assets                                                                                                                   |   |                                          | **34** |   |   | 11 |   |  | 29 |  |
| Discontinued                      operations                                                                                                                  |   |                                          | **98** |   |   | 59 |   |  | 115 |  |
| Net                      earnings                                                                                                                             |   | **$**                                         | **1,791** |   | $ | 1,757 |   | $ | 1,650 |  |
|                                                                                                                                                          |   |                                          |   |   |   |   |   |   |  |  |
| Earnings                      per share from continuing operations -                      basic                                                          |   | **$**                                         | **3.27** |   | $ | 3.21 |   | $ | 2.90 |  |
|   -                      diluted                                                                                                                    |   |                                          | **3.22** |   |   | 3.17 |   |  | 2.87 |  |
| Earnings                      per share               -                      basic |   |                                          | **3.45** |   |   | 3.32 |   |  | 3.11 |  |
|                        - diluted                                                                                                                         |   |                                          | **3.41** |   |   | 3.28 |   |  | 3.08 |  |
| Dividends                      per share                                                                                                                      |   |                                          | **0.33** |   |   | 0.30 |   |  | 0.20 |  |
| Cash                      flow from continuing operating activities before                      changes in non-cash working capital3                          |   |                                          | **3,787** |   |   | 3,425 |   |  | 3,042 |  |
| **Balance                      sheet data (at end of year)**                                                                                                  |   |                                          |   |   |   |   |   |   |  |  |
| Total                      assets                                                                                                                             |   |                                          | **20,655** |   |   | 18,136 |   |  | 14,774 |  |
| Debt                                                                                                                                                          |   |                                          | **2,913** |   |   | 2,580 |   |  | 2,229 |  |
| Cash                      and cash equivalents4                                                                                                               |   |                                          | **789** |   |   | 170 |   |  | 635 |  |
| Shareholders’                      equity                                                                                                               |   |                                          | **9,488** |   |   | 8,739 |   |  | 7,588 |  |
| Average                      capital employed4                                                                                                                |   | **$**                                         | **11,860** | ** ** | $ | 10,533 |   | $ | 9,268 |  |

----

**QUARTERLY          INFORMATION**

*(millions          of dollars, except per share amounts)*

|                                                                      |   | **2005****Three                    Months Ended** |      | 2004Three                    Months Ended |   |
|---------------------------------------------------------------------------|--------|---------------------------------------------------|-----------|-------------------------------------------|--------|
|                                                                      |   | **Mar.                    31**                    |      | **June                    30**            |   | **Sept.                    30** |   | **Dec.                    31** |   | Mar.                    31 |   | June                    30 |   | Sept.                    30 |   | Dec.                    31 |   |
| **Total                    revenue from continuing operations**           |   | **$**                                             | **3,275** |                                      | **$**  | **3,945** |   | **$** | **4,721** |   | **$** | **4,838** |   | $ | 3,365 |   | $ | 3,455 |   | $ | 3,515 |   | $ | 3,623 |   |
|                                                                      |   |                                              |      |                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Earnings**                                                              |   |                                              |      |                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Upstream                                                                  |   |                                              |      |                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| North                    American Natural Gas                             |   | **$**                                             | **103**   |                                      | **$**  | **117** |   | **$** | **156** |   | **$** | **284** |   | $ | 119 |   | $ | 133 |   | $ | 117 |   | $ | 131 |   |
| East                    Coast Oil                                         |   |                                              | **169**   |                                      |   | **208** |   |   | **218** |   |   | **180** |   |   | 186 |   |   | 182 |   |   | 190 |   |   | 153 |   |
| Oil                    Sands                                              |   |                                              | **(19**   | **)**                                     |   | **34** |   |   | **82** |   |   | **15** |   |   | 34 |   |   | 25 |   |   | 51 |   |   | 10 |   |
| International                                                             |   |                                              | **105**   |                                      |   | **93** |   |   | **104** |   |   | **151** |   |   | 106 |   |   | 54 |   |   | 76 |   |   | 77 |   |
| Downstream                                                                |   |                                              | **113**   |                                      |   | **80** |   |   | **98** |   |   | **107** |   |   | 87 |   |   | 92 |   |   | 40 |   |   | 91 |   |
| Shared                    Services                                        |   |                                              | **(44**   | **)**                                     |   | **(56** | **)** | ** ** | **(61** | **)** | ** ** | **(89** | **)** |   | (32 | ) |   | (33 | ) |   | (30 | ) |   | (30 | ) |
| Operating                    earnings from continuing operations          |   |                                              | **427**   |                                      |   | **476** |   |   | **597** |   |   | **648** |   |   | 500 |   |   | 453 |   |   | 444 |   |   | 432 |   |
| Foreign                    currency translation gain (loss)               |   |                                              | **(4**    | **)**                                     |   | **8** |   |   | **74** |   |   | **(5** | **)** |   | (13 | ) |   | (21 | ) |   | 54 |   |   | 43 |   |
| Unrealized                    gain (loss) on Buzzard derivative contracts |   |                                              | **(313**  | **)**                                     |   | **(171** | **)** | ** ** | **(85** | **)** |   | **7** |   |   | - |   |   | (57 | ) |   | (107 | ) |   | (41 | ) |
| Gain                    on sale of assets                                 |   |                                              | **-**     |                                      |   | **9** |   |   | **7** |   |   | **18** |   |   | 9 |   |   | - |   |   | 2 |   |   | - |   |
| Discontinued                    operations                                |   |                                              | **8**     |                                      |   | **23** |   |   | **21** |   |   | **46** |   |   | 17 |   |   | 18 |   |   | 17 |   |   | 7 |   |
| **Net                    earnings**                                       |   | **$**                                             | **118**   |                                      | **$**  | **345** |   | **$** | **614** |   | **$** | **714** |   | $ | 513 |   | $ | 393 |   | $ | 410 |   | $ | 441 |   |
| **Earnings                    per share from continuing operations**      |   |                                              |      |                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                     |   | **$**                                             | **0.21**  |                                      | **$**  | **0.62** |   | **$** | **1.14** |   | **$** | **1.29** |   | $ | 0.93 |   | $ | 0.70 |   | $ | 0.74 |   | $ | 0.83 |   |
| Diluted                                                                   |   | **$**                                             | **0.21**  |                                      | **$**  | **0.61** |   | **$** | **1.13** |   | **$** | **1.28** |   | $ | 0.92 |   | $ | 0.70 |   | $ | 0.73 |   | $ | 0.82 |   |
| **Earnings                    per share**                                 |   |                                              |      |                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                     |   | **$**                                             | **0.23**  |                                      | **$**  | **0.66** |   | **$** | **1.19** |   | **$** | **1.38** |   | $ | 0.96 |   | $ | 0.74 |   | $ | 0.77 |   | $ | 0.85 |   |
| Diluted                                                                   |   | **$**                                             | **0.22**  |                                      | **$**  | **0.66** |   | **$** | **1.17** |   | **$** | **1.36** |   | $ | 0.95 |   | $ | 0.73 |   | $ | 0.76 |   | $ | 0.83 |   |

----

**Capital          Expenditures on Property, Plant and Equipment and          Exploration**

**CAPITAL          EXPENDITURES ON PROPERTY, PLANT AND EQUIPMENT AND          EXPLORATION**

*(millions          of dollars)*

|                                                                                                                                                                |   | **2005** |      | 2004   |   | 2003   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|-----------|--------|--------|--------|--------|
| **Exploration**                                                                                                                                                     |   |     |      |   |   |   |   |   |   |   |
| North                    American Natural Gas                                                                                                                       |   | **$**    | **173**   |   | $      | 157    |   | $ | 143 |   |
| East                    Coast Oil                                                                                                                                   |   |     | **12**    |   |   | -      |   |   | 55 |   |
| Oil                    Sands                                                                                                                                        |   |     | **32**    |   |   | 15     |   |   | 23 |   |
| International                                                                                                                                                       |   |     |      |   |   |   |   |   |   |   |
| Northwest                    Europe                                                                                                                                 |   |     | **37**    |   |   | 48     |   |   | 11 |   |
| North                    Africa/Near East                                                                                                                           |   |     | **29**    |   |   | 19     |   |   | 12 |   |
| Northern                    Latin America                                                                                                                           |   |     | **7**     |   |   | 3      |   |   | 2 |   |
| **Total                    exploration**                                                                                                                            |   |     | **290**   |   |   | 242    |   |   | 246 |   |
| **Development**                                                                                                                                                     |   |     |      |   |   |   |   |   |   |   |
| North                    American Natural Gas                                                                                                                       |   |     | **496**   |   |   | 419    |   |   | 314 |   |
| East                    Coast Oil                                                                                                                                   |   |     | **302**   |   |   | 275    |   |   | 289 |   |
| Oil                    Sands                                                                                                                                        |   |     | **432**   |   |   | 381    |   |   | 420 |   |
| International                                                                                                                                                       |   |     |      |   |   |   |   |   |   |   |
| Northwest                    Europe                                                                                                                                 |   |     | **525**   |   |   | 322    |   |   | 254 |   |
| North                    Africa/Near East                                                                                                                           |   |     | **70**    |   |   | 71     |   |   | 32 |   |
| Northern                    Latin America                                                                                                                           |   |     | **28**    |   |   | 22     |   |   | 24 |   |
| **Total                    development**                                                                                                                            |   |     | **1,853** |   |   | 1,490  |   |   | 1,333 |   |
| **Property                    acquisitions**                                                                                                                        |   |     |      |   |   |   |   |   |   |   |
| North                    America Natural Gas                                                                                                                        |   |     | **44**    |   |   | 90     |   |   | 60 |   |
| Oil                    Sands                                                                                                                                        |   |     | **308**   |   |   | 1      |   |   | - |   |
| International                                                                                                                                                       |   |     |      |   |   |   |   |   |   |   |
| Northwest                    Europe                                                                                                                                 |   |     | **-**     |   |   | 1,222  |   |   | 65 |   |
| **Total                    property acquisitions**                                                                                                                  |   |     | **352**   |   |   | 1,313  |   |   | 125 |   |
| **Downstream**                                                                                                                                                      |   |     |      |   |   |   |   |   |   |   |
| Refining                    and supply                                                                                                                              |   |     | **883**   |   |   | 656    |   |   | 296 |   |
| Sales,                    marketing and other                                                                                                                       |   |     | **108**   |   |   | 171    |   |   | 117 |   |
| Lubricants                                                                                                                                                          |   |     | **62**    |   |   | 12     |   |   | 11 |   |
| **Total                    Downstream**                                                                                                                             |   |     | **1,053** |   |   | 839    |   |   | 424 |   |
| **Shared                    Services**                                                                                                                              |   |     | **12**    |   |   | 9      |   |   | 14 |   |
| **Total                    capital expenditures on property, plant and equipment and exploration                    from                    continuing operations** |   |     | **3,560** |   |   | 3,893  | 1      |   | 2,142 |   |
| **Discontinued                    operations**                                                                                                                      |   |     | **46**    |   |   | 62     |   |   | 90 |   |
| **Total                    capital expenditures on property, plant, equipment and                    exploration**                                                  |   | **$**    | **3,606** |   | $      | 3,955  | 1      | $ | 2,232 |   |

| 1 | Excludes                    U.S. Rockies acquisition of Prima Energy Corporation totalling                    $644 million, net of acquired cash. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| **2006                    Capital Program**                          |   | *(millions                    of dollars)* |   |
|----------------------------------------------------------------------|--------|--------------------------------------------|--------|
| Regulatory                    compliance                             |   | $                                          | 265    |   |
| Enhancing                    existing assets                         |   |                                       | 155    |   |
| Improving                    base business profitability             |   |                                       | 240    |   |
| Reserves                    replacement in core areas1          |   |                                       | 975    |   |
| New                    growth projects                               |   |                                       | 1,375  |   |
| Exploration                    and new ventures for long-term growth |   |                                       | 375    |   |
| **Total                    continuing operations**                   |   | $                                          | 3,385  |   |

| 1 | Reserves                    replacement in core areas excludes capital expenditures related                    to the                    sold mature Syrian producing                    assets. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Dividends**

----

**DESCRIPTION          OF CAPITAL STRUCTURE**

**General          Description of Capital Structure**

**Constraints**
** **

**Ownership,          Voting and Other Restrictions**

*          Petro-Canada Public Participation Act*

*Petro-Canada          Public Participation Act*

----

**Credit          Ratings**

**PETRO**
**-CANADA’S          CREDIT RATINGS**

|                                | Moody’s                    Investor Services Inc. | Standard &                    Poor’s Rating Services | Dominion                    Bond Rating Service |
|-------------------------------------|--------------------------------------------------------------|---------------------------------------------------------------------|-------------------------------------------------|
| Outlook                             | Stable                                                       | Stable                                                              | Stable                                          |
| Senior                    unsecured | Baa2                                                         | BBB                                                                 | A                    (low)                      |
| Short-term                          | -                                                            | -                                                                   | R-1                    (low)                    |

----

**MARKET          FOR SECURITIES**

**Trading          Price and Volume**

**PETRO**
**-CANADA          SHARE TRADING ACTIVITY ON THE TORONTO STOCK EXCHANGE**

**AND          THE NEW YORK STOCK EXCHANGE IN 2005**
**1**

|      |   | Toronto                      Stock Exchange                                              |   | New York                      Stock Exchange |    |
|-----------|--------|------------------------------------------------------------------------------------------|--------|---------------------------------------------------|---------|
|      |   | Share                      Price Trading Range*(dollars                      per share)* |   |                                              |    | Share                      Price Trading Range*(U.S. dollars                      per share)* |   |   |   |
|      |   | High                                                                                     |   | Low                                               |    | Close |   | Share                      Volume*(millions)* |   | High |   | Low |   | Close |   | Share                      Volume*(millions)* |   |
| **2005**  |   |                                                                                     |   |                                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| January   |   | $                                                                                        | 32.00  |                                              | $       | 29.51 |   | $ | 32.00 |   |   | 49.0 |   | $ | 25.93 |   | $ | 24.15 |   | $ | 25.82 |   |   | 4.5 |   |
| February  |   |                                                                                     | 34.91  |                                              |    | 31.98 |   |   | 34.16 |   |   | 39.2 |   |   | 28.20 |   |   | 25.78 |   |   | 27.92 |   |   | 5.5 |   |
| March     |   |                                                                                     | 36.68  |                                              |    | 33.54 |   |   | 35.13 |   |   | 55.4 |   |   | 30.40 |   |   | 27.58 |   |   | 28.93 |   |   | 9.3 |   |
| April     |   |                                                                                     | 36.23  |                                              |    | 33.65 |   |   | 34.93 |   |   | 40.9 |   |   | 29.84 |   |   | 26.90 |   |   | 27.74 |   |   | 8.8 |   |
| May       |   |                                                                                     | 36.11  |                                              |    | 33.68 |   |   | 35.20 |   |   | 30.2 |   |   | 29.13 |   |   | 26.70 |   |   | 28.14 |   |   | 5.9 |   |
| June      |   |                                                                                     | 41.19  |                                              |    | 35.51 |   |   | 39.88 |   |   | 51.8 |   |   | 33.51 |   |   | 28.46 |   |   | 32.57 |   |   | 8.2 |   |
| July      |   |                                                                                     | 44.94  |                                              |    | 40.33 |   |   | 44.02 |   |   | 39.9 |   |   | 36.23 |   |   | 33.02 |   |   | 35.92 |   |   | 10.4 |   |
| August    |   |                                                                                     | 48.09  |                                              |    | 45.41 |   |   | 48.00 |   |   | 49.3 |   |   | 40.35 |   |   | 36.65 |   |   | 40.35 |   |   | 11.0 |   |
| September |   |                                                                                     | 50.80  |                                              |    | 47.51 |   |   | 48.66 |   |   | 50.7 |   |   | 43.47 |   |   | 40.49 |   |   | 41.73 |   |   | 13.0 |   |
| October   |   |                                                                                     | 50.20  |                                              |    | 40.13 |   |   | 41.16 |   |   | 60.5 |   |   | 43.03 |   |   | 33.96 |   |   | 34.75 |   |   | 11.4 |   |
| November  |   |                                                                                     | 44.60  |                                              |    | 40.91 |   |   | 44.55 |   |   | 71.2 |   |   | 38.12 |   |   | 34.47 |   |   | 38.12 |   |   | 9.3 |   |
| December  |   | $                                                                                   | 47.75  |                                              | $  | 46.00 |   | $ | 46.65 |   | $  | 37.9 |   | $  | 40.91 |   | $ | 39.24 |   | $ | 40.09 |   |  | 8.4 |   |

| 1 | Per                    share amounts are quoted on a post-stock dividend                    basis. |
|---|----------------------------------------------------------------------------------------------------|

----

**Stock          Performance Graph**

**Year          ended**

| Petro-Canada                                     | 100.00 | 104.11 | 130.76 | 172.09 | 166.36 | 255.86 |
|--------------------------------------------------|--------|--------|--------|--------|--------|--------|
| S&P/TSX                      Composite Index | 100.00 | 87.44  | 76.62  | 97.05  | 111.13 | 138.06 |
| S&P/TSX                      Energy Index1   | 100.00 | 106.01 | 119.48 | 147.73 | 190.10 | 306.64 |

| 1 | No                    dividends for S&P/TSX Energy                    Index. |
|---|----------------------------------------------------------------------------------|

**Prior          Sales**

| Purpose                    of offering:     | To                    repay existing short-term borrowing, with the balance used for                    working                    capital             |
|---------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|
| Size                    of offering:        | $600                    million US                                                                                                                     |
| Maturity                    date:           | May                    15, 2035                                                                                                                        |
| Form                    of securities:      | 5.95%                    senior notes                                                                                                                  |
| Net                    proceeds of issue:   | $586                    million US                                                                                                                     |
| Public                    offering price:   | 98.774%                    per note                                                                                                                    |
| Application                    of proceeds: | Repay                    short-term, commercial paper credit facility, with the balance                    used for                    working capital |

----

**DIRECTORS          AND OFFICERS**

**Directors**

|   |  **RON                    A. BRENNEMAN**(Non-independent,                    Management)Age:                    59Calgary,                    Alberta, CanadaDirector                    since: 2000Common                    shares: 78,7931DSUs:                    190,8872Attendance:9/9 Board                                                                                                                                                                              |  Ron                    Brenneman is the President and Chief Executive Officer of the                    Company.                    Prior to joining the Company in 2000, he held various positions                    within                    Exxon Corporation (integrated oil) and its affiliated companies.                    He also                    serves as a Director of the Bank of Nova Scotia and BCE Inc.                    He is a                    member of the Board of Directors of the Canadian Council of Chief                    Executives and the Canadian Unity Council. Mr. Brenneman holds a                    BSc. and an MSc.  As                    a                    member of management, Mr. Brenneman is not a member of any Committee                    of the Company, but he is invited to attend all Committee meetings                    other                    than *in                    camera*                    sessions. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |  **ANGUS                    A. BRUNEAU, O.C.**(Independent)Age:                    70St.                    John’s, Newfoundland and Labrador, CanadaDirector                    since: 1996Common                    shares: 5,5271DSUs:                    10,8192Attendance:8/9                     Board3/3                     Environment,                    Health and Safety Committee (Chair)6/7 Audit,                    Finance and Risk Committee |  Angus                    Bruneau is Chairman of the Board of Directors of Fortis Inc.                    (utilities and services corporation). He also serves as a Director                    of Inco                    Limited and SNC Lavalin Group Inc. He is an executive member                    of a number                    of not-for-profit organizations, including Sustainable Development                    Technology Canada, Canadian Institute for Child Health and the                    Canadian                    Foundation for Innovation. Dr. Bruneau is a P.Eng and holds a BSc.,                    D.Eng, and a PhD.  Dr. Bruneau                    is Chair of the Environment, Health and Safety Committee and                    a member of                    the Audit, Finance and Risk                    Committee.                                                                                                                           |

|   |  **GAIL                    COOK-BENNETT**(Independent)Age:                    65Toronto,                    Ontario, CanadaDirector                    since: 1991Common                    shares: 4,0981DSUs:                    19,9982Attendance: 9/9 Board2/2 Pension                    Committee (Chair)7/7 Audit,                    Finance and Risk Committee |  Gail                    Cook-Bennett is Chairperson of the Canada Pension Plan Investment                    Board                    (public pension plan investment). She also serves as a Director                    of                    Emera Inc. and Manulife Financial Corporation and is a Fellow of the                    Institute of Corporate Directors. Dr. Cook-Bennett has earned a PhD                    in Economics and holds a Doctor of Laws (honoris causa) from                    Carleton                    University.  Dr. Cook-Bennett                    is Chair of the Pension Committee and a member of the Audit,                    Finance and                    Risk Committee. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   |  **RICHARD                    J. CURRIE, O.C.**(Independent)Age:                    68Toronto,                    Ontario, CanadaDirector                    since: 2003Common                    shares: 20,0001DSUs:                    3,1462Attendance: 8/9                     Board5/6                     Management                    Resources and Compensation Committee1/2 Pension                    Committee                                                                                                                |  Dick                    Currie is Chairman of the Board of Bell Canada Enterprises (BCE Inc.)                    (telecommunications). From 1996 to 2002, he was President and                    Director of                    George Weston Limited (food processing and distribution). He                    serves as a                    Director of CAE, Inc. and Staples, Inc., is the Chancellor of                    the                    University of New Brunswick and a Fellow of the Institute of                    Corporate Directors. Mr. Currie holds a B.Eng and an MBA.                     Mr.                    Currie is a member of the Management Resources and Compensation                    Committee                    and the Pension Committee. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |  **CLAUDE                    FONTAINE, Q.C.**(Independent)Age:                    64Montreal,                    Quebec, CanadaDirector                    since: 1987Common                    shares: 15,9261 DSUs:                    28,3402Attendance: 9/9                     Board6/6                     Management                    Resources and Compensation Committee (Chair)1/13 Environment,                    Health and Safety Committee2/23 Corporate                    Governance and Nominating Committee |  Claude                    Fontaine is a Senior Partner with Ogilvy Renault LLP (barristers                    and                    solicitors). He also serves as a Director of Optimum General Inc.,                    the Institute of Corporate Directors (Chair of the Quebec Chapter)                    and the                    Montreal Heart Institute Foundation. He is Honorary Governor                    of the                    Canadian Unity Council. Mr. Fontaine holds a BA, an LL.L., and an                    ICD.D.  Mr.                    Fontaine is Chair of the Management Resources and Compensation                    Committee                    and a member of the Environment, Health and Safety                    Committee.                    |
|   |  **PAUL                    HASELDONCKX**(Independent)Age:                    57Essen,                    GermanyDirector                    since: 2002Common                    shares: 3,0011 DSUs:                    6,0762Attendance: 9/9                     Board7/7                     Audit,                    Finance and Risk Committee3/3 Environment,                    Health and Safety Committee                                                                                                                   |  Paul                    Haseldonckx is the past Chairman of the Executive Board of Veba                    Oil & Gas GmbH (integrated oil and gas) and its predecessor                    companies. He is a guest lecturer at Leiden University MBA Program                    on                    International Management. Mr. Haseldonckx holds an MSc.  Mr.                    Haseldonckx is a member of the Audit, Finance and Risk Committee                    and the                    Environment, Health and                    Safety Committee.                                                                                                                                                                                                              |

----

|   |  **THOMAS                    E. KIERANS, O.C.**(Independent)Age:                    65Toronto,                    Ontario, CanadaDirector                    since: 1991Common                    shares: 40,9001 DSUs:                    6,6592Attendance: 7/9                     Board5/6                     Management                    Resources and Compensation Committee6/6 Corporate                    Governance and Nominating Committee |  Tom                    Kierans is Chairman of the Canadian Journalism Foundation, prior                    to which                    he was Chairman of CSI Global Markets. He also serves as a Director                    of                    Manulife Financial Corporation, Mount Sinai Hospital and Canadian                    Institute for Advanced Research. Mr. Kierans is also a corporate                    director and sits on a number of advisory Boards of for-profit                    and                    not-for-profit organizations including Lazard (Canada), Task                    Force on the                    Modernization of Securities Legislation in Canada and the Schulich                    School                    of Business, York University. He holds a BA (Honours) and an MBA                    (Finance, Dean’s Honours List) and is a Fellow of the Canadian Institute                    of Corporate Directors.  Mr. Kierans                    is a member of the Management Resources and Compensation Committee                    and the                    Corporate Governance and Nominating                    Committee. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |  **BRIAN                    F. MACNEILL, C.M.**(Independent)Age:                    66Calgary,                    Alberta, CanadaDirector                    since: 1995Common                    shares: 10,2001 DSUs:                    37,2662Attendance: 9/9                     Board |  Brian                    MacNeill is the Chairman of the Board of Directors of Petro-Canada.                    Prior                    to that, he was President and Chief Executive Officer of                    Enbridge Inc. (pipeline business). He is also Chairman and Director                    of Dofasco Inc. and a Director of the Toronto-Dominion Bank,                    West Fraser                    Timber Co. Ltd. and Telus Corp. He is a member of the Canadian                    Institute of Chartered Accountants and the Financial Executives                    Institute.                    He is also a Fellow of the Alberta and Ontario Institutes of                    Chartered                    Accountants and of the Institute of Corporate Directors and is                    Chair of                    the Board of Governors of the University of Calgary. Mr. MacNeill is                    a Certified Public Accountant and holds a B.Comm.  Mr.                    MacNeill is an ex-officio member of all                    Committees. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |  **MAUREEN                    McCAW**(Independent)Age:                    51Edmonton,                    Alberta, CanadaDirector                    since: 2004Common                    shares: 4941 DSUs:                    3,3142Attendance: 8/9                     Board3/43 Corporate                    Governance and Nominating Committee2/2 Pension                    Committee2/23 Environment,                    Health and Safety Committee |  Maureen                    McCaw is immediate past President of Leger Marketing (marketing                    research),                    formerly Criterion Research Corp., a company she founded in 1986.                    She is a                    past Chair of the Edmonton Chamber of Commerce and continues                    to serve as a                    Director. She also serves on a number of Alberta boards and advisory                    committees, and holds a BA.  Ms.                    McCaw is a member of the Pension Committee and the Corporate                    Governance                    and Nominating Committee.  |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |  **PAUL                    D. MELNUK**(Independent)Age:                    51St.                    Louis, Missouri, USADirector                    since: 2000Common                    shares: 4,4001 DSUs:                    15,9042Attendance: 7/9                     Board7/7                     Audit,                    Finance and Risk Committee (Chair)3/3 Environment,                    Health and Safety Committee |  Paul                    Melnuk is Chairman and Chief Executive Officer of Thermadyne                    Holdings                    Corporation (industrial products) and Managing Partner of FTL                    Capital                    Partners LLC (merchant banking). He is past President and Chief                    Executive Officer of Bracknell Corporation and Barrick Gold Corporation.                    Mr. Melnuk is a member of the Canadian Institute of Chartered                    Accountants and of the World Presidents' Organization, St. Louis                    chapter, and holds a B.Comm.  Mr.                    Melnuk is Chair of the Audit, Finance and Risk Committee and                    a member of                    the Environment, Health and Safety Committee.   |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|    |  **GUYLAINE                    SAUCIER, F.C.A., C.M.**(Independent)Age:                    59Montreal,                    Quebec, CanadaDirector                    since: 1991Common                    shares: 6,5201DSUs:                    31,5712Attendance: 9/9                     Board6/6 Corporate                    Governance and Nominating Committee (Chair)2/2 Pension                    Committee |  Guylaine                    Saucier, is a Corporate Director who serves on the Boards of                    AXA Assurance                    Inc., CHC Helicopter Corp., Altran Technologies and Foundation                    du Musée                    des Beaux Arts. She is a former Chairman of the Board of Directors                    of the                    Canadian Broadcasting Corporation, a former Director of the Bank                    of                    Canada, a former Chair of the Canadian Institute of Chartered                    Accountants                    (CICA), a former Director of the International Federation of                    Accountants,                    and was Chair of the Joint Committee on Corporate Governance                    established                    by the CICA, the Toronto Stock Exchange and the Canadian Venture                    Exchange.                    She is a Fellow of the Institute of Chartered Accountants and                    of the                    Institute of Corporate Directors. Ms.                    Saucier is Chair of the Corporate Governance and Nominating Committee                    and a member of the Pension Committee.  |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |  **JAMES                    W. SIMPSON**(Independent)Age:                    61Danville,                    California, USADirector                    since: 2004Common                    shares: 01 DSUs:                    2,9732Attendance: 9/9                     Board7/7                     Audit,                    Finance and Risk Committee3/33 Management                    Resources and Compensation Committee2/23 Environment,                    Health and Safety Committee |  Jim                    Simpson is past President of Chevron Canada Resources (oil and                    gas). He is                    also past Chairman of the Canadian Association of Petroleum Producers                    and                    past Vice-Chairman of the Canadian Association of the World Petroleum                    Congresses. Mr. Simpson holds a BSc. and a MSc.  Mr.                    Simpson is a member of the Audit, Finance and Risk Committee                    and the                    Management Resources and Compensation Committee.  |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Additional          Disclosure Relating to Directors**

----

| **Name                    and Municipality of Residence**                                                           | **Served                    as an Officer Since** | **Principal                    Occupation**1                                                                             |
|---------------------------------------------------------------------------------------------------------------------|---------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------|
| Brian                    F. MacNeill, Calgary, Alberta                                                              | 2000                                              | Chairman                    of the Board of the Company                                                                  |
| **Executive                    Leadership Team**                                                                    |                                              |                                                                                                                     |
| Ron                    A.                    Brenneman, Calgary, Alberta                                            | 2000                                              | President                    and Chief Executive Officer of the Company                                                  |
| Peter                    S. Kallos, London, England                                                                 | 2003                                              | Executive                    Vice-President, International                                                               |
| Boris                    J. Jackman, Mississauga, Ontario                                                           | 1993                                              | Executive                    Vice-President, Downstream                                                                  |
| E.F.H.                    Roberts, Calgary, Alberta                                                                 | 1989                                              | Executive                    Vice-President and Chief Financial Officer                                                  |
| Brant                    G. Sangster, Calgary, Alberta                                                              | 1988                                              | Senior                    Vice-President, Oil Sands                                                                      |
| Kathleen                    E. Sendall, Calgary, Alberta                                                            | 1996                                              | Senior                    Vice-President, North American Natural Gas                                                     |
| William                    A. Fleming, St. John’s, Newfoundland and Labrador                                  | 2005                                              | Vice-President,                    East Coast Oil                                                                        |
| **Upstream**                                                                                                        |                                              |                                                                                                                     |
| Youssef                    Ghoniem, Dorsten, Germany                                                                | 2002                                              | Senior                    Vice-President, Operations                                                                     |
| Gordon                    Carrick, London, England                                                                  | 2002                                              | Senior                    Vice-President, International Operations and Technology                                        |
| Nicholas                    A. Maden, London, England                                                               | 2003                                              | Vice-President,                    International and Offshore Exploration                                                |
| Graham                    Lyon, London, England                                                                     | 2004                                              | Vice-President,                    Business Development, International                                                   |
| Donald                    M. Clague, Denver, Colorado                                                               | 2002                                              | Vice-President,                    U.S. Operations, North American Natural Gas                                           |
| Francois                    Langlois, Calgary, Alberta                                                              | 2002                                              | Vice-President,                    Exploration, North American Natural Gas                                               |
| John                    D. Miller, Calgary, Alberta                                                                 | 2004                                              | Vice-President,                    Natural Gas Marketing                                                                 |
| Leon                    Sorenson, Calgary, Alberta                                                                  | 2004                                              | Vice-President,                    Canadian Operations, North American Natural Gas                                       |
| **Downstream**                                                                                                      |                                              |                                                                                                                     |
| Randall                    B. Koenig, Oakville, Ontario                                                             | 1996                                              | Vice-President,                    Lubricants                                                                            |
| Frederick                    Scharf, Mississauga, Ontario                                                           | 2003                                              | Vice-President,                    Wholesale/Retail                                                                      |
| Philip                    Churton, Burlington, Ontario                                                              | 2005                                              | Vice-President,                    Marketing                                                                             |
| Daniel                    P. Sorochan, Mississauga, Ontario                                                         | 2003                                              | Vice-President,                    Refining and Supply                                                                   |
| **Shared                    Services**                                                                              |                                              |                                                                                                                     |
| W.                    A.                    (Alf) Peneycad,2                    Calgary,                    Alberta | 1986                                              | Vice-President,                    General Counsel and Chief Compliance Officer                                          |
| Andrew                    Stephens,2                    Calgary,                    Alberta                         | 1993                                              | Vice-President,                    Human Resources                                                                       |
| M.                    A.                    (Greta) Raymond,2                    Calgary, Alberta                   | 2001                                              | Vice-President,                    Environment, Health, Safety, Security and Corporate                    Responsibility |
| Gerhard                    Kinast, London, England                                                                  | 2002                                              | Vice-President,                    Finance                                                                               |
| Neil                    J. Camarta2,                    Calgary, Alberta                                            | 2005                                              | Vice-President,                    Corporate Planning and Communications                                                 |
| Douglas                    S. Fraser, Calgary, Alberta                                                              | 2002                                              | Treasurer                                                                                                                |
| Hugh                    L. Hooker, Calgary, Alberta                                                                 | 2004                                              | Associate                    General Counsel and Corporate Secretary                                                     |
| Michael                    Danyluk, Calgary, Alberta                                                                | 2004                                              | Chief                    Information Officer                                                                             |
| Michael                    C. Barkwell, Calgary, Alberta                                                            | 2005                                              | Controller                                                                                                               |

----

**Share          Ownership**

**Corporate          Governance**

|  (i)  | developing                    and implementing principles and procedures for the overall management                    of                    corporate governance; |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii)  | assessing                    the size, competencies and skills of the existing Board and proposing                    qualified candidates as nominees for election to the Board and                    its                    Committees; |
|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii)  | conducting                    Board, Committee and individual Director evaluations; and |
|-------------|-----------------------------------------------------------------------------------------|

| (iv)  | overseeing                    the orientation, education and development of members of the                    Board. |
|------------|----------------------------------------------------------------------------------------------------------------------|

----

**Composition          of the Board of Directors and          Committees**
** **

| §   | Audit,                    Finance and Risk; |
|--------------------|---------------------------------------------|

| §   | Corporate                    Governance and Nominating; |
|--------------------|---------------------------------------------------------|

| §   | Management                    Resources and Compensation; |
|--------------------|-----------------------------------------------------------|

| §   | Pension;                    and |
|--------------------|---------------------------------|

| §   | Environment                    Health and Safety. |
|--------------------|---------------------------------------------------|

*in          camera*

**Director          Orientation and Performance          Evaluations**
** **

**Corporate          Standards and Conduct**

----

**Audit          Committee Disclosure**

**Audit,          Finance and Risk Committee**

*in          camera*

***Audit          Fees***

|  **I****NTEREST                    OF MANAGEMENT AND OTHERS IN MATERIAL                    TRANSACTIONS** |
|----------------------------------------------------------------------------------------------------------------|

----

|  **TRANSFER                    AGENTS AND REGISTRARS**  |
|-------------------------------------------------------------------|

|  In                      Canada:**CIBC                        Mellon Trust Company**600,                        333 - 7th                        Avenue S.W.Calgary,                        Alberta T2P 2Z1Telephone:                        1-800-387-0825Website:                        www.cibcmellon.com | In                      the                      U.S.:**Mellon                        Investor Services**44                        Wall Street, 6th                        FloorNew                        York, New York 10005Telephone:                        1-800-387-0825Website:                        www.cibcmellon.com |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**MATERIAL          CONTRACTS**

|  **INTERESTS                    OF                    EXPERTS** |
|----------------------------------------------------------------------|

**ADDITIONAL          INFORMATION**

----

**SCHEDULE          A**

**REPORT          ON RESERVES DATA**

**BY**

**SENIOR          OFFICER RESPONSIBLE FOR RESERVES DATA**

|   | (i) | proved                    oil and gas reserves quantities estimated as at December 31,                    2005, using                    constant prices and costs; and |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | the                    Standardized Measure of Discounted Future Net Cash Flows relating                    to                    proved oil and gas reserves quantities. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**STANDARDIZED          MEASURE OF FUTURE NET CASH FLOWS - PROVED OIL AND GAS          RESERVES**

**(10%          discount rate)**

**As          at December 31, 2005**

| Location                    of Reserves (by business)                                |   | Standardized                    Measure(After                    Deducting Income Taxes) |
|--------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------|
|                                                                                 |   | *(millions                    of dollars)*                                               |
| North                    American Natural Gas                                        |   | $                                                                                        | 5,333 |   |
| East                    Coast Oil                                                    |   |                                                                                     | 3,275 |   |
| Northwest                    Europe                                                  |   |                                                                                     | 2,162 |   |
| North                    Africa/Near East -                    continuing operations |   |                                                                                     | 700 |   |
| Northern                    Latin America                                            |   |                                                                                     | 371 |   |
| Syncrude                    Oil Sands Mining Operation                               |   |                                                                                     | 2,809 |   |
| Discontinued                    operations                                           |   | $                                                                                        | 347 |   |

----

----

**SCHEDULE          B**

**REPORT          OF MANAGEMENT AND DIRECTORS**

**ON          RESERVES DATA AND OTHER INFORMATION**

|   | (i) | proved                    oil and gas reserves quantities estimated as at December 31,                    2005, using                    constant prices and costs; and |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | the                    Standardized Measure of Discounted Future Net Cash Flows relating                    to                    proved oil and gas reserves quantities. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

**SCHEDULE          C**

**AUDIT,          FINANCE AND RISK COMMITTEE**

| **1.** | **The                    duties and responsibilities of the Audit, Finance and Risk Committee                    shall                    include the following:** |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  (i)     |   | assist the                    Board of Directors in the discharge of its fiduciary responsibilities                    relating to the Company’s                    accounting policies, reporting practices and internal controls,                    as well as                    to its risk management policies and practices;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|---------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (ii)          |   | maintain direct lines of communications with the                    Chief                    Financial Officer and with the contract auditor and the external                    auditors;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|  (iii)   |   | monitor                    the scope and costs of the activity of the contract and external                    auditors,                    and assess their performance;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|  (iv)    |   | formally consider the continuation of or a change                    in the                    external auditors and review all issues related to a change of                    external                    auditor, including any differences between the Company and the                    auditor                    that relate to the auditor’s opinion or a qualification thereof or an                    auditor comment;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|  (v)     |   | recommend                    to the Board of Directors a firm of external auditors for approval                    by the                    shareholders of the Company; review and approve the terms of                    their                    engagement; review and approve the fee, scope and timing of the                    audit, and                    be apprised of and approve in advance any audit related services                    and any                    non-audit services (which are not prohibited non-audit services)                    to be                    provided by the external auditors and the costs thereof and consider                    any                    impact of the provision of such services on the maintenance of                    their                    independence and review the Company’s hiring policies regarding employees                    and former employees of the present and former external                    auditors; |
|  (vi)    |   | review                    all issues related to any proposed change in or renewal of the                    contract                    with the contract auditor;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|  (vii)   |   | review and recommend approval by the Board of                    the                    Company’s audited annual financial statements and Management’s Discussion                    and Analysis;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|  (viii)  |   | review before publication the Company’s unaudited                    quarterly financial statements, reports of quarterly earnings,                    and                    Management’s Discussion and Analysis with particular attention to the                    presentation of unusual or sensitive matters such as disclosure                    of related                    party transactions, significant non-recurring events, significant                    risks,                    changes in accounting principles, and estimates or reserves,                    and all                    significant variances between comparative reporting periods,                    and approve                    the publication of the Company’s unaudited quarterly financial statements                    and reports of quarterly earnings;                                                                                                                                   |
|  (ix)    |   | review all financial information included in annual                    information forms, prospectuses, other offering memoranda or                    other                    documents requiring approval by the Board of Directors;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|  (x)     |   | review the Statement of Management’s Responsibility for                    the Financial Statements as signed by senior management and included                    in                    any published document and review and approve the Statement regarding                    the                    role of the Committee as signed by the Chairman of the Committee                    and                    included in any published documents;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|  (xi)    |   | review                    the Report of Management on Oil and Gas Disclosure as signed                    by senior                    management and directors and included in any published                    document;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|  (xii)   |   | review any litigation, claim or other contingency,                    including tax assessments, that could have a material effect                    upon the                    financial position or operating results of the Company, monitor                    disclosure                    thereof in documents reviewed by the Committee;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|  (xiii)  |   | review the appropriateness and quality of the                    accounting                    policies used in the preparation of the Company’s financial statements,                    and consider any proposed changes to such policies;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|  (xiv)   |   | review with the external auditor the contents                    of the                    annual audit report and review any significant recommendations                    from the                    external auditor to strengthen the internal controls of the Company;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|  (xv)    |   | review the results of the external audit, any                    significant                    problems encountered in performing the audit, and the contents                    of any                    Management Letter issued by the external auditor to the Company,                    and                    management’s response thereto;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|  (xvi)   |   |   annually                    review a report on the contract audit function with respect to                    the terms                    of reference, organization, staffing, independence, performance                    and                    effectiveness of the contract audit services, receive and approve                    the                    annual contract audit plan, and obtain assurances in respect                    of conformity                    with CICA and AICPA professional standards, and other regulatory                    bodies’                    requirements, the outsourcing contract and recommendations of                    management                    and the contract auditor;                                                                                                                                                                                                                                                          |
|  (xvii)  |   | review significant contract audit findings and                    recommendations, and management’s response thereto;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|  (xviii) |   | oversee                    management’s responsibility for designing, installing and maintaining an                    effective control environment; approve in advance any internal                    control-related services performed by the external auditor; and                    receive                    regular reports on the Company’s internal control policies and procedures                    with particular emphasis on accounting and financial controls,                    and                    recommend changes where appropriate;                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|  (xix)   |   | review any unresolved significant issues between                    management and the external auditor that could affect the financial                    reporting or internal controls of the Company;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|  (xx)    |   | annually; (a) review the Company’s internal procedures for                    providing reserves information to its reserves evaluators; (b)                    meet with                    internal and external reserves evaluators to determine their                    independence                    and effectiveness in preparing the reserves data of the Company;                    (c)                    review the reserves data included in the annual disclosure made                    by the                    Company; and (d) review the Company’s internal procedures for assembling                    and reporting other information associated with oil and gas activities                    and                    included in the annual disclosure made by the Company.                                                                                                                                                                                                 |
|  (xxi)   |   | receive                    reports on and review any other items deriving from the foregoing,                    either                    in respect of the Company, or a subsidiary or any other entity                    or                    relationship in which the Company has a significant interest,                    as requested                    by the Board;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|  (xxii)  |   |  review                    and make recommendations to the Board concerning the                    following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|          |   |  1)  the Company's policies regarding hedging,                    investments, credit and risk management; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|          |   |  2)  the Company's risk identification, analysis                    and management procedures;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|  (xxiii) |   | review, prior to each annual shareholders' meeting,                    the                    policies and practices concerning the regular examination of                    officers                    expenses and perquisites, including the use of Company assets;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|  (xxiv)  |   | report annually to the full Board, on the state                    of                    completion of the Audit, Finance and Risk Committee Annual Agenda                    Items,                    with appropriate recommendations; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|  (xxv)   |   | report annually to the full Board on the Committee's                    review of the Company's reserves procedures and disclosure and                    recommend                    to the Board the approval of the reserves data and other information                    associated with the Company's oil and gas activities and included                    in the                    annual disclosure made by the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

----

**2.**
**ORGANIZATION          AND PROCEDURES**

| 1)   | receipt,                    retention and treatment of complaints regarding accounting controls                    or                    auditing matters; and |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2)   | confidential                    anonymous submission by employees of concerns regarding questionable                    accounting or auditing matters; and annual review of compliance                    under the Company’s Code of Ethics for Senior Financial                    Officers. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**CONTROLS          AND PROCEDURES**

**CHANGES          IN INTERNAL CONTROL OVER FINANCIAL REPORTING**

**IDENTIFICATION          OF THE AUDIT COMMITTEE**

| Chair:   | P.                    D. Melnuk    |
|----------|------------------------------------|
| Members: | A.                    A. Bruneau   |
|     | G.                    Cook-Bennett |
|     | P.                    Haseldonckx  |
|     | J.                    W. Simpson   |

**AUDIT          COMMITTEE FINANCIAL EXPERT**

**CODE          OF ETHICS**

**PRINCIPAL            ACCOUNTANT FEES AND SERVICES**

**CONTRACTUAL              OBLIGATIONS**

**See              page 15 of the Management's Discussion and Analysis Exhibit forming part              of              this report**

**OFF-BALANCE              SHEET ARRANGEMENTS**

**See              page 15 of the Management's Discussion and Analysis Exhibit forming part              of              this report**

**UNDERTAKING            AND CONSENT TO SERVICE OF PROCESS**

**A.**
**Undertaking               **

**B.**
**Consent              to Service of Process**

**SIGNATURE**

|                                      | **PETRO-CANADA**                                                                            |
|-------------------------------------------|---------------------------------------------------------------------------------------------|
|                                      |                                                                                        |
| Date:                      March 23, 2006 | /s/                      Hugh L. Hooker                                                     |
| Name:                                     | Hugh                      L. Hooker                                                         |
| Title:                                    | Associate                      General Counsel and Corporate                      Secretary |

**EXHIBITS**

**Exhibits**
**Description**