**Exhibit 10.61**

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**INDEMNIFICATION AGREEMENT**

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Dated as of [DATE] between Nexen Inc. (“Nexen”)and [EXECUTIVE OFFICER] (together with his or her estate, heirs, executors andlegal representatives the “Indemnified Party”)

 

BACKGROUND

 

(a)                                  The Indemnified Party:

 

(i)                                     is or has been a director or officer ofNexen;

 

(ii)                                  is or has been, at the request of Nexen,a director or officer of a body corporate (“Body Corporate”); or

 

(iii)                               is or has been, at the request of Nexen,a director or officer of or is acting or has acted in a similar capacity (andthe Indemnified Party shall for purposes hereof be referred to as a director orofficer in so acting or having acted) for a body corporate, partnership,unincorporated association, unincorporated syndicate, unincorporated organization,joint venture or trust (“Entity”);

 

(Nexen, any Body Corporate and any Entity beingcollectively the “Corporations” and any one of them being a “Corporation”);

 

(b)                                 Nexen acknowledges that the IndemnifiedParty, acting in the capacity of director or officer, is required to makedecisions and take actions in furtherance of the business and affairs of anyCorporation which might have the result of attracting personal liability; and

 

(c)                                  It is in the best interests of Nexen toagree to indemnify the Indemnified Party from any and all liabilities, losses,costs, charges, expenses or damages sustained or incurred by the IndemnifiedParty acting in the capacity of director or officer of any Corporation;

 

AGREEMENT

 

In consideration of the Indemnified Partyhaving acted and continuing to act as a director or officer, the parties agreeas follows:

 

1.                                       Duty of Care

 

(a)                                  In accordance with the provisions of the *Canada Business Corporations Act* (the “Act”), theIndemnified Party, in exercising his or her powers and discharging his or herduties as a director or officer of any Corporation, shall:

 

(i)                                    act honestly and in good faith with aview to the best interests of the Corporation; and

 

(ii)                                exercise the care, diligence and skillthat a reasonably prudent person would exercise in comparable circumstances.

 

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(b)                                 Each Corporation acknowledges that theIndemnified Party has complied with his or her duties under subsection 1(a) hereofif the Indemnified Party relied in good faith on:

 

(i)                                     financial statements of the Corporationrepresented to the Indemnified Party by an officer of the Corporation or in awritten report of the auditor of the Corporation fairly to reflect thefinancial condition of the Corporation; or

 

(ii)                                  a report of a person whose professionlends credibility to a statement made by the professional person.

 

2.                                       Duty to Comply

 

(a)                                  The Indemnified Party shall comply withthe Act, the regulations made in the Act, the articles of the Corporation, theby-laws of the Corporation and any unanimous shareholder agreement orpartnership agreement respecting the Corporation.

 

(b)                                 Each Corporation acknowledges that theIndemnified Party has complied with his or her duties under subsection 2(a) hereof,if the Indemnified Party exercised the care, diligence and skill that areasonably prudent person would have exercised in comparable circumstances,including reliance in good faith on:

 

(i)                                     financial statements of the Corporationrepresented to the Indemnified Party by an officer of the Corporation or in awritten report of the auditor of the Corporation fairly to reflect thefinancial condition of the Corporation; or

 

(ii)                                  a report of a person whose professionlends credibility to a statement made by the professional person.

 

3.                                       Disclaimer of Liability

 

The Indemnified Party shall not be liable for theacts, receipts, neglects, omissions or defaults of any other director orofficer or any employee or agent of any Corporation or for any liabilities,damages, costs, charges or expenses sustained or incurred by any Corporation inthe execution of the duties of his or her office, provided that nothing hereincontained shall relieve the Indemnified Party of any liability for liabilities,damages, costs, charges or expenses suffered or incurred as a direct result of anyacts, receipts, neglects, omissions or defaults of the Indemnified Party whichare in contravention of the Act or any other applicable law.

 

4.                                       Indemnity

 

(a)                                  Except in respect of an action by or onbehalf of a Corporation to procure a judgment in its favour, Nexen shallindemnify and save harmless the Indemnified Party from and against allliabilities, damages, costs, charges and expenses (including, withoutlimitation, court fees, legal expenses and witness fees), including an amountpaid to settle an action or satisfy a judgment or any fine or penalty levied,reasonably incurred by him or her in respect of any civil, criminal,administrative, investigative or other action, proceeding or inquiry of anynature, 

 

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to which he or she is, directly or indirectly, a partyby reason of being or having been a director or officer of any Corporation if:

 

(i)                                     the Indemnified Party acted honestly andin good faith with a view to the best interests of the Corporation; and

 

(ii)                                  in the case of a criminal oradministrative action or proceeding that is enforced by a monetary penalty, theIndemnified Party had reasonable grounds for believing that his or her conductwas lawful.

 

(b)                                 For all purposes of this Agreement, adirector or officer shall be conclusively deemed to have acted honestly and ingood faith with a view to the best interests of the Corporation and to have hadreasonable grounds for believing that his or her conduct was lawful, unless anduntil the applicable court hearing the action in which indemnity is soughtdetermines in a final judgment that is non-appealable that the director orofficer in question did not act honestly and in good faith with a view to thebest interests of the Corporation or did not have reasonable grounds forbelieving that his or her conduct was lawful, as applicable.

 

(c)                                  In respect of an action by or on behalfof a Corporation to procure a judgment in its favour, to which the IndemnifiedParty is, directly or indirectly, a party by reason of being or having been adirector or an officer of the Corporation, Nexen shall make an application atits expense for, and use its best efforts to obtain, approval of the Court ofQueen’s Bench of Alberta to indemnify and save harmless the Indemnified Partyfrom and against all liabilities, damages, costs, charges and expenses(including, without limitation, court fees, legal expenses and witness fees)reasonably incurred by him or her in connection with such action, if theIndemnified Party fulfills the conditions set out in clauses 4(a)(i) and4(a)(ii).

 

(d)                                 Notwithstanding the foregoing, Nexenshall indemnify and save harmless the Indemnified Party from and against anyand all liabilities, damages, costs, charges and expenses (including, withoutlimitation, court fees, legal expenses and witness fees) reasonably incurred byhim or her in connection with any action or proceeding to which the IndemnifiedParty is, directly or indirectly, a party by reason of being or having been adirector or officer of a Corporation (including, without limitation, an actionor proceeding to enforce or interpret this Agreement), if the Indemnified Partywas not judged by the court or other competent authority to have committed anyfault or omitted to do anything that the Indemnified Party ought to have doneand the Indemnified Party fulfills the conditions set out in clauses 4(a)(i) and4(a)(ii).

 

(e)                                  For the purposes of this Agreement, thetermination of any civil, criminal or administrative action or proceeding byjudgment, order, settlement or conviction shall not, of itself, create apresumption either that the Indemnified Party did not act honestly and in goodfaith with a view to the best interests of the Corporation or that, in the caseof a criminal or administrative action or proceeding that is enforced by amonetary penalty, the Indemnified Party did not have reasonable grounds forbelieving that his or her conduct was lawful.

 

(f)                                    Upon the Indemnified Party becoming,directly or indirectly, a party to any action, proceeding or inquiry of anynature referred to in paragraph 4(a), Nexen shall

 

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forthwith assume and pay, or reimburse the IndemnifiedParty for and indemnify and save harmless the Indemnified Party from andagainst, any and all costs, charges and expenses (including, withoutlimitation, court fees, legal expenses and witness fees) referred to inparagraph 4(a).  Such assumption,payment or reimbursement shall be made continuously and promptly after theIndemnified Party has advised Nexen of such costs, charges and expenses.  If the outcome of such action, proceeding orinquiry establishes that the Indemnified Party were not entitled toindemnification of such costs, charges and expenses, then the Indemnified Partyshall repay to Nexen all amounts paid by it to or for the benefit of suchIndemnified Party under this paragraph 4(f) for which there was noentitlement to indemnification.

 

5.                                       Insurance

 

(a)                                  Unless otherwise agreed between theParties hereto, Nexen shall purchase and maintain, or cause to be purchased andmaintained, while the Indemnified Party remains a director or officer of aCorporation and for a period of six years thereafter, directors’ and officers’errors and omissions insurance for the benefit of the Indemnified Party onterms no less favourable in terms of coverage and amounts, to the extentpermitted by law and available on reasonable commercial terms, than suchinsurance maintained in effect by Nexen on the date hereof**,**providedthat such insurance shall not apply to any liability incurred by theIndemnified Party relating to any failure by the Indemnified Party to acthonestly and in good faith with a view to the best interests of theCorporation.  Nexen shall provide theIndemnified Party with a copy of the insurance policies, if requested, andshall provide the Indemnified Party with prompt written notice if suchinsurance is not maintained for any reason.

 

(b)                                 The indemnification provided pursuant tothis Agreement is intended to be available in all circumstances permitted underthe Act and, without limitation, is intended to be available in circumstanceswhere any insurance coverage maintained by Nexen is not available, eitherbecause the insurer is denying coverage, the actions are not covered due to anexemption or exclusion from the terms of the insurance policy or otherwise, orwhere Nexen determined for whatever reason not to obtain or maintain insurancecoverage.

 

6.                                       Income Tax

 

Should any payment made pursuant to this Agreement bedeemed by any taxing authority to constitute a taxable benefit or otherwise beor become subject to any tax or levy, then Nexen shall pay such greater amountas may be necessary to ensure that the amount received by or on behalf of theIndemnified Party after the payment of or withholding for such tax, is equal tothe amount of the costs, charges, expenses or liability actually incurred by oron behalf of the Indemnified Party such that the Indemnified Party shall beindemnified for any and all such taxes.

 

7.                                       Assignment

 

The duties and obligations of Nexen underthis Agreement shall be binding upon, and enforceable by the Indemnified Party,against Nexen and its successors and assigns, including any corporation withwhich Nexen is merged or amalgamated. Nexen

 

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covenants and agrees that it shall not,without the consent of the Indemnified Party, transfer of dispose of all orsubstantially all of its assets or business to any entity that does not agreeto assume all of the obligations of Nexen under this Agreement.

 

8.                                       Effective Date

 

Notwithstanding the date of execution of thisAgreement, the terms and provisions hereof shall be effective, binding upon,and enforceable by the parties as of and from the date on which the IndemnifiedParty was first appointed or elected a director or officer of a Corporation.

 

9.                                       Indemnification Not Exclusive

 

The indemnification provided by this Agreement is inaddition to the indemnification provided by by-laws of any Corporation or thoseprovided under the legislation governing any Corporation.  In addition, the indemnification provided bythis Agreement shall be in addition to any right of indemnification,contribution or reimbursement that a director or officer has under applicablelaw, the constating documents of any Corporation or any other agreement betweenthe director or officer and any Corporation and shall continue for the benefitof the Indemnified Party notwithstanding that he or she may have ceased to be adirector or officer of one or more Corporations.

 

10.                                 Defence of Claims

 

The Indemnified Party covenants and agrees that, uponbecoming aware of any facts or circumstances which may give rise to theIndemnified Party becoming a party, directly or indirectly, to any action,proceeding or inquiry referred to in paragraph 4(a) (a “Claim”), theIndemnified Party shall provide written notice to Nexen setting out inreasonable detail the nature of the facts relating to such Claim.  Upon receipt of the notice of the Claim,Nexen shall, at its expense and in a timely manner, contest and defend againstthe Claim or cause the relevant Corporation to contest and defend against theClaim and take all such steps as may be necessary or proper to prevent theresolution thereof in a manner adverse to the Indemnified Party.  The Indemnified Party shall fully cooperatewith Nexen in taking all such steps.  IfNexen does not in a timely manner undertake or cause the contestation ordefence of the Claims, the Indemnified Party may do so and such contestation ordefence shall be at the expense and risk of Nexen provided that if the outcomeof such action, proceeding or inquiry establishes that the Indemnified Partywas not entitled to contest or defend the Claim at the risk and expense ofNexen, then the Indemnified Party shall repay to Nexen all amounts paid byNexen in connection with such contestation or defence pursuant to thissection 10 and paragraph 4(f) for which there was no entitlementto indemnification.

 

11.                                 Obligations of Nexen Absolute

 

The obligations of Nexen under this Agreement areabsolute and unconditional and shall not be released, discharged or reduced,and the rights of the Indemnified Party hereunder shall not be prejudiced orimpaired, by any neglect, delay or forbearance in demanding, requiring orenforcing payment or performance by Nexen of any of its obligations hereunderor by granting any extensions of time for such performance or by waiving anyperformance (except as to any particular performance which has been waived), orby permitting or consenting to any assignment in bankruptcy, receivership,insolvency or any other creditor’s proceedings of or against Nexen or by thewinding-up

 

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or dissolution of Nexen or any other event oroccurrence which would or might otherwise have the effect at law of terminatingthe obligations of Nexen under this Agreement.

 

12.                                 Interpretation

 

This Agreement is not intended to, and shall not beinterpreted to, authorize a payment of an indemnity contrary tosection 124 of the Act.

 

13.                                 Severability

 

If any part of this Agreement or the application ofsuch part to any person or circumstance shall, to any extent, be invalid orunenforceable, the remainder of this Agreement, or the application of such partto any other person or circumstance, shall not be affected thereby and eachprovision of this Agreement shall be valid and enforceable to the fullestextent permitted by law.

 

14.                                 Choice of Law

 

This Agreement shall be governed andconstrued in accordance with the laws of Alberta and the laws of Canadaapplicable therein.

 

**IN WITNESS WHEREOF** the parties have executedthis agreement on the date first above mentioned.

 
| **SIGNED** by the Indemnified Party |   |                |
|-------------------------------------|--------|---------------------|
| in the presence of:                 |   |                |
|                                |   |                |
|                                |   |                |
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| Witness Signature                   |   | [EXECUTIVE OFFICER] |
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| Witness Name                        |   |                |
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| Witness Address                     |   |                |
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| Witness Address                     |   |                |
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| Witness Occupation                  |   |                |
|                                |   |                |
|                                |   |                |
|                                |   | **NEXEN INC.**      |
|                                |   | ** **          |
|                                |   | ** **          |
|                                |   | ** **          |

 

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| **EXECUTIVE OFFICER** | ** ** | **DATE OF AGREEMENT** |
|-----------------------|------------|-----------------------|
|                  |       |                  |
| Brian C. Reinsborough |       | November 1, 2007 |
| James T. Arnold       |       | July 16, 2009    |

 

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