© Copyright IBM Corporation 2008

Thoughts on Current and Future Trends in Integrated Operations

Tony EdwardsBG-Group, Head of iValue

iE2008 Organising Committee Chairman

This Presentation

Update from iE2008 - IO is here to stay- How much Progress have we made?- Collaboration a Major Theme- People, Process and Organisational Change- Young Professionals

Two Philosophies? What Next for IO? Conclusions

IO2008 - TrondheimSlide 2

IO2008 - Trondheim

iE 2008 - Amsterdam

Company Activity

National Oil Company, 10%

Contractor, 10%

Oilfield Services, 7%

Independent Oil Company, 6%

Communications/Network Infrastructure, 3%

Human Resources/Training and Education, 3%

Information Management, 2%

Other, 11%

Supplier to Oil & Gas Industry, 15%

International Oil Company, 30%

Consultancy, 2%

1665 people from 52 Countries Approx 45% from IOC’s, NOC’s and Independents

- Significant Contribution from NOC’s Companies from outside the O&G Sector, attending,

presenting and exhibiting- Consultancies- Telecoms- Aerospace

Global Attendance- 65% West Europe - 14% USA (240)- 8% Mid East (130)- 4% South America (65)- 4% East Europe (65)- 5% Other (80)

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IO2008 - Trondheim

Senior Management sees Integrated Operations transforming our Industry

Helge Lund – StatoilHydro- “Integrated Operations is a revolution that is reshaping our industry”

Amin Nasser – Saudi Aramco- “All new fields will be intelligent fields”

Malcolm Brinded – Shell- “I expect the use of Smart Technology to accelerate over the next

decade” Ben Verwaayen – BT

- “In the digital world time and distance are dead” Andrew Gould – Schlumberger

- “Our Operations Centre in Aberdeen monitors 28 rigs simultaneously”

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IO2008 - Trondheim

How much Progress have we made?

Live Links- BP’s Advanced Collaborative Environment in Baku- StatoilHydro’s Drilling Support Centre supported by the SH’s

Subsurface expert centre and Schlumberger’s Operations Centre- Shell’s Gronnigen Control Centre- Petrobras – Operations Support Centre

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IO2008 - Trondheim

Collaboration – A Major Theme 15 Papers on Collaborative Environments

- Case Studies- Real Benefits

Normal way of working for many companies- Drilling Support – Moving to 24/7- Operations Support- Expert Support – Both Internal and External to the Company

Built into the fabric of the Building Moving beyond front line operations

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IO2008 - Trondheim

People, Process and Organisational Change

A significant amount of learning in the last 2-3 years Increased Emphasis in this area

- Now seen as the key to success

More focus on People and Organisational Change Questions about the focus on Process lead Change

- Has there been too much of this?- Processes evolve and change rapidly in an intelligent energy world

Looking outside our industry for support and learning’s

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IO2008 - Trondheim

Young Professionals – The future of our industry

E&P organisations should make the digital oilfield more accessible to young professionals

YPs know how to work collaboratively

IO is how we attract the best and the brightest in to our industry

New Education and Training Programmes

Need to change the perception of our Industry

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Two Philosophies? IO as a transformation programme

- Delivered in in the Line- Supported by Central Programme Office- Emphasis on Value attainment and People and Organisation

Change- Technology is the Enabler- Integrates the teams and the ways of working

IO as a Technology/IT Project- Delivered by a central group- Emphasis on the Technology- Integrates the Systems and Data- Automating a Process?

Regional Split?IO2008 - TrondheimSlide 9

IO2008 - Trondheim

What’s Next for Integrated Operations Extending beyond frontline Operations and Drilling and the

Inclusion of a broader range of disciplines- Control and Instrumentation and Facilities Engineering Disciplines- Commercial and Finance- HR and Org Development

Major projects- Inclusion of IO in the Design of New Fields- IO Applied to the Major Projects Process

Asset Integrity- Sensor Technology is needed- Assuring the integrity of our Plant and Equipment

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What is Next for Integrated Operations

Remote support to access Global Resources IO across the entire Value Chain

- A move into mid-stream and Downstream Learning’s from other Industries

- Aeronautical, Defence, Automotive, Pharmaceutical New Career Paths?

- Does the SPE need a Production Optimisation or Digital Engineering Discipline

A change in the Oil Company Supplier Relationship- Standards which allow collaboration between companies

An ‘Eco-system’ of Companies that work together

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Conclusions IO is now a truly Global movement Just beginning to enter new domains such as Projects Moving towards 24/7 and Global Expert Support Still a lot to learn from other industries IO is essential to attracting the next generation of Talent Will change the nature of the relationships between

companies – ‘Eco-System’ of Companies

We Have Only Just Started

“Truly Integrated Oil and Gas Industry”

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