ITEM 1A. RISK FACTORS

ExxonMobil's financial and operating
results are subject to a variety of risks inherent in the global oil, gas, and
petrochemical businesses. Many of these risk factors are not within the
Company's control and could adversely affect our business, our financial and
operating results, or our financial condition. These risk factors include:

Supply and Demand

The oil, gas, and petrochemical businesses are
fundamentally commodity businesses. This means ExxonMobil's operations and
earnings may be significantly affected by changes in oil, gas, and
petrochemical prices and by changes in margins on refined products. Oil, gas,
petrochemical, and product prices and margins in turn depend on local, regional,
and global events or conditions that affect supply and demand for the relevant
commodity. Any material decline in oil or natural gas prices could have a
material adverse effect on certain of the Company's operations, especially in
the Upstream segment, financial condition and proved reserves. On the other
hand, a material increase in oil or natural gas prices could have a material
adverse effect on certain of the Company's operations, especially in the
Downstream and Chemical segments.

Economic conditions. The demand for energy and petrochemicals correlates closely with
general economic growth rates. The occurrence of recessions or other periods of
low or negative economic growth will typically have a direct adverse impact on
our results. Other factors that affect general economic conditions in the world
or in a major region, such as changes in population growth rates, periods of
civil unrest, government austerity programs, or currency exchange rate
fluctuations, can also impact the demand for energy and petrochemicals.
Sovereign debt downgrades, defaults, inability to access debt markets due to
credit or legal constraints, liquidity crises, the breakup or restructuring of
fiscal, monetary, or political systems such as the European Union, and other
events or conditions that impair the functioning of financial markets and
institutions also pose risks to ExxonMobil, including risks to the safety of
our financial assets and to the ability of our partners and customers to
fulfill their commitments to ExxonMobil.

Other demand-related factors. Other factors that may affect the demand for oil, gas,
and petrochemicals, and therefore impact our results, include technological
improvements in energy efficiency; seasonal weather patterns, which affect the
demand for energy associated with heating and cooling; increased competitiveness
of alternative energy sources that have so far generally not been competitive
with oil and gas without the benefit of government subsidies or mandates; and
changes in technology or consumer preferences that alter fuel choices, such as
toward alternative fueled or electric vehicles.

Other supply-related factors. Commodity prices and margins also vary depending on a
number of factors affecting supply. For example, increased supply from the
development of new oil and gas supply sources and technologies to enhance
recovery from existing sources tend to reduce commodity prices to the extent
such supply increases are not offset by commensurate growth in demand.
Similarly, increases in industry refining or petrochemical manufacturing
capacity tend to reduce margins on the affected products. World oil, gas, and
petrochemical supply levels can also be affected by factors that reduce
available supplies, such as adherence by member countries to OPEC production
quotas and the occurrence of wars, hostile actions, natural disasters,
disruptions in competitors' operations, or unexpected unavailability of
distribution channels that may disrupt supplies. Technological change can also
alter the relative costs for competitors to find, produce, and refine oil and
gas and to manufacture petrochemicals.

Other market factors. ExxonMobil's business results are also exposed to
potential negative impacts due to changes in interest rates, inflation,
currency exchange rates, and other local or regional market conditions. We
generally do not use financial instruments to hedge market exposures.

Government and Political Factors

ExxonMobil's results can be adversely affected by
political or regulatory developments affecting our operations.

Access limitations. A number of countries limit access to their oil and gas resources, or
may place resources off-limits from development altogether. Restrictions on
foreign investment in the oil and gas sector tend to increase in times of high
commodity prices, when national governments may have less need of outside
sources of private capital. Many countries also restrict the import or export
of certain products based on point of origin.

Restrictions on doing business. ExxonMobil is subject to laws and sanctions imposed
by the U.S. or by other jurisdictions where we do business that may prohibit
ExxonMobil or certain of its affiliates from doing business in certain
countries, or restricting the kind of business that may be conducted. Such
restrictions may provide a competitive advantage to competitors who may not be
subject to comparable restrictions.

Lack of legal certainty. Some countries in which we do business lack
well-developed legal systems, or have not yet adopted clear regulatory
frameworks for oil and gas development. Lack of legal certainty exposes our
operations to increased risk of adverse or unpredictable actions by government
officials, and also makes it more difficult for us to enforce our contracts. In
some cases these risks can be partially offset by agreements to arbitrate
disputes in an international forum, but the adequacy of this remedy may still
depend on the local legal system to enforce an award.

Regulatory and litigation risks. Even in countries with well-developed legal
systems where ExxonMobil does business, we remain exposed to changes in law
(including changes that result from international treaties and accords) that
could adversely affect our results, such as:

increases in taxes, duties, or government royalty
rates (including retroactive claims);
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price controls;
changes in environmental regulations or other laws
adoption of regulations mandating the use of
adoption of government payment transparency
government actions to cancel contracts,

Legal remedies available to compensate us for
expropriation or other takings may be inadequate.

We also may be adversely affected by the outcome of
litigation, especially in countries such as the United States in which very
large and unpredictable punitive damage awards may occur, or by government
enforcement proceedings alleging non-compliance with applicable laws or
regulations.

Security concerns. Successful operation of particular facilities or projects may be
disrupted by civil unrest, acts of sabotage or terrorism, and other local
security concerns. Such concerns may require us to incur greater costs for
security or to shut down operations for a period of time.

Climate change and greenhouse gas restrictions. Due to concern over the risk of climate change, a
number of countries have adopted, or are considering the adoption of,
regulatory frameworks to reduce greenhouse gas emissions. These include
adoption of cap and trade regimes, carbon taxes, restrictive permitting,
increased efficiency standards, and incentives or mandates for renewable
energy. These requirements could make our products more expensive, lengthen
project implementation times, and reduce demand for hydrocarbons, as well as
shift hydrocarbon demand toward relatively lower-carbon sources such as natural
gas. Current and pending greenhouse gas regulations may also increase our
compliance costs, such as for monitoring or sequestering emissions.

Government sponsorship of alternative energy. Many governments are providing tax advantages and other
subsidies to support alternative energy sources or are mandating the use of
specific fuels or technologies. Governments and others are also promoting
research into new technologies to reduce the cost and increase the scalability
of alternative energy sources. We are conducting our own research both in-house
and by working with more than 80 leading universities around the world,
including the Massachusetts Institute of Technology, Princeton University, the
University of Texas, and Stanford University. Our research projects focus on
developing algae-based biofuels, carbon capture and storage, breakthrough
energy efficiency processes, advanced energy-saving materials and other
technologies. For example, ExxonMobil is working with Fuel Cell Energy Inc. to explore
using carbonate fuel cells to economically capture CO 2

Management Effectiveness

In addition to external economic and political
factors, our future business results also depend on our ability to manage
successfully those factors that are at least in part within our control. The
extent to which we manage these factors will impact our performance relative to
competition. For projects in which we are not the operator, we depend on the management
effectiveness of one or more co-venturers whom we do not control.

Exploration and development program. Our ability to maintain and grow our oil and gas
production depends on the success of our exploration and development efforts.
Among other factors, we must continuously improve our ability to identify the
most promising resource prospects and apply our project management expertise to
bring discovered resources on line as scheduled and within budget.

Project management. The success of ExxonMobil's Upstream, Downstream, and Chemical businesses
depends on complex, long‑term, capital intensive projects. These projects
in turn require a high degree of project management expertise to maximize
efficiency. Specific factors that can affect the performance of major projects
include our ability to: negotiate successfully with joint venturers, partners,
governments, suppliers, customers, or others; model and optimize reservoir
performance; develop markets for project outputs, whether through long-term
contracts or the development of effective spot markets; manage changes in
operating conditions and costs, including costs of third party equipment or
services such as drilling rigs and shipping; prevent, to the extent possible,
and respond effectively to unforeseen technical difficulties that could delay
project startup or cause unscheduled project downtime; and influence the
performance of project operators where ExxonMobil does not perform that role.

The term "project" as used in this report can refer to
a variety of different activities and does not necessarily have the same
meaning as in any government payment transparency reports.

Operational efficiency. An important component of ExxonMobil's competitive
performance, especially given the commodity‑based nature of many of our
businesses, is our ability to operate efficiently, including our ability to
manage expenses and improve production yields on an ongoing basis. This
requires continuous management focus, including technology improvements, cost
control, productivity enhancements, regular reappraisal of our asset portfolio,
and the recruitment, development, and retention of high caliber employees.

Research and development. To maintain our competitive position, especially in
light of the technological nature of our businesses and the need for continuous
efficiency improvement, ExxonMobil's research and development organizations
must be successful and able to adapt to a changing market and policy
environment, including developing technologies to help reduce greenhouse gas
emissions.

Safety, business controls, and environmental risk
management. Our results depend on
management's ability to minimize the inherent risks of oil, gas, and
petrochemical operations, to control effectively our business activities, and
to minimize the potential for human error. We apply rigorous management systems
and continuous focus to workplace safety and to avoiding spills or other
adverse environmental events. For example, we work to minimize spills through a
combined program of effective operations integrity management, ongoing
upgrades, key equipment replacements, and comprehensive inspection and
surveillance. Similarly, we are implementing cost-effective new technologies
and adopting new operating practices to reduce air emissions, not only in
response to government requirements but also to address community priorities.
We also maintain a disciplined framework of internal controls and apply a
controls management system for monitoring compliance with this framework.
Substantial liabilities and other adverse impacts could result if our
management systems and controls do not function as intended. The ability to
insure against such risks is limited by the capacity of the applicable
insurance markets, which may not be sufficient.

Business risks also include the risk of cybersecurity
breaches. If our systems for protecting against cybersecurity risks prove not
to be sufficient, ExxonMobil could be adversely affected such as by having its
business systems compromised, its proprietary information altered, lost or
stolen, or its business operations disrupted.

Preparedness. Our operations may be disrupted by severe weather events, natural disasters,
human error, and similar events. For example, hurricanes may damage our
offshore production facilities or coastal refining and petrochemical plants in
vulnerable areas. Our facilities are designed, constructed, and operated to
withstand a variety of extreme climatic and other conditions, with safety
factors built in to cover a number of engineering uncertainties, including
those associated with wave, wind, and current intensity, marine ice flow
patterns, permafrost stability, storm surge magnitude, temperature extremes,
extreme rain fall events, and earthquakes. Our consideration of changing
weather conditions and inclusion of safety factors in design covers the
engineering uncertainties that climate change and other events may potentially
introduce. Our ability to mitigate the adverse impacts of these events depends
in part upon the effectiveness of our robust facility engineering as well as
our rigorous disaster preparedness and response and business continuity
planning.

Projections, estimates, and descriptions of
ExxonMobil's plans and objectives included or incorporated in Items 1, 1A, 2, 7
and 7A of this report are forward-looking statements. Actual future results,
including project completion dates, production rates, capital expenditures, costs,
and business plans could differ materially due to, among other things, the
factors discussed above and elsewhere in this report.

ITEM 1B. UNRESOLVED STAFF
COMMENTS

Not applicable.

Item 2. Properties

Information with regard to oil and gas
producing activities follows:

1. Disclosure of Reserves

A. Summary of Oil and Gas Reserves at
Year-End 2016

The table below summarizes the oil-equivalent proved
reserves in each geographic area and by product type for consolidated
subsidiaries and equity companies. Gas is converted to an oil-equivalent basis
at six million cubic feet per one thousand barrels. The Corporation has
reported proved reserves on the basis of the average of the
first-day-of-the-month price for each month during the last 12-month period. As
a result of very low prices during 2016, under the SEC definition of proved reserves, certain quantities
of oil and natural gas that qualified as proved reserves in prior years did not
qualify as proved reserves at year-end 2016. Among the factors that would
result in these amounts being recognized again as proved reserves at some point
in the future are a recovery in average price levels, a further decline in
costs, and / or operating efficiencies. Otherwise, no major discovery or other favorable or adverse event
has occurred since December 31, 2016, that would cause a significant change in
the estimated proved reserves as of that date.

Crude Natural Gas Synthetic Natural Oil-Equivalent
Oil Liquids Bitumen Oil Gas Basis
(million bbls) (million bbls) (million bbls) (million bbls) (billion cubic ft) (million bbls)
──────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────
United States 1,013 304 - - 11,927 3,305
Canada/South 79 8 436 564 478 1,167
Europe 146 29 - - 1,473 420
Africa 679 157 - - 728 957
Asia 1,733 125 - - 4,532 2,614
Australia/Oceania 74 31 - - 3,071 616
Total 3,724 654 436 564 22,209 9,079
United States 205 5 - - 144 233
Europe 11 - - - 5,804 979
Asia 784 330 - - 14,067 3,459
Total Equity 1,000 335 - - 20,015 4,671
Total Developed 4,724 989 436 564 42,224 13,750
United States 1,168 458 - - 5,859 2,603
Canada/South 162 7 265 - 462 511
Europe 27 4 - - 186 62
Africa 165 4 - - 43 176
Asia 1,025 - - - 389 1,089
Australia/Oceania 47 27 - - 4,286 789
Total 2,594 500 265 - 11,225 5,230
United States 31 5 - - 67 47
Europe 6 - - - 1,820 309
Asia 399 44 - - 1,167 638
Total Equity 436 49 - - 3,054 994
Total 3,030 549 265 - 14,279 6,224
7,754 1,538 701 564 56,503 19,974

(1) South America includes proved
developed reserves of 29 billion cubic feet of natural gas.