Low Oil Price – No Time to be Smart? Pieter Kapteijn, Dir. Technology and Innovation Maersk Oil, Copenhagen IO Conference Trondheim Norway 29 September 2009

Overview A non-scientific model for IO readiness….. What can one learn from 8 yrs of IO? what hinders IO implementation what helps Maersk Oil: Integrated Asset Management programme (IAM) Questions

IO Readiness and Oilprice…? A non-scientific model $/bbl low high reducing cost making money survival % ROI < 5% 10%15% > 2015? improving margins

What can one learn from 8 years of IO? 1.The concept actually works! 2.Technology is no longer the issue 3.Many successful Production and Drilling Operational implementations Time to pay-out relatively short: 1-2 yrs Value of collaboration environments now proven 4.Rate of adoption is increasing But still low as a %-age of potential value 5.Change management issues better understood

What hinders adoption of IO? 1. IO message remains complex and difficult to “sell” in an industry that likes to manage “unbundled” activities subsurface uncertainties “use up” all risk tolerance 2. Management understanding of IO concepts model based control and use of real-time dynamic data: robust learning versus planning/designing for success Is IO an operating model or a business model? 3. Leaders from a pre-digital age we will need the big crew change…. gaming is the new learning

What helps adoption of IO? 1. Lower margins and environmental/CO 2 constraints will require a more holistic, systems approach More complex optimisations and trade-offs 2. More fields move into EOR phase EOR is very surveillance/optimisation intensive (WAG) upstream will become a CO 2 sink (CCS, EOR) 3. NOCs will demand lifecycle value maximisation Right level of smartness to be “designed in” IO and technology become competitive differentiators 4. And … the bulk of the value is still to be realised in recovery improvement

CO 2 will become a source of value to Oil Companies Connected value chains require IO

Maersk Oil Technology Programme 1.Integrated Asset Management one of 5 Technology Themes abundance of positive IO project results to make the case 2.Managed at Maersk Oil executive level Technology and Innovation Board: 3-5 year rolling plan coordinated with IT/IM strategy 3.Phased, staged implementation approach to gain confidence and acceptance of approach Using only proven technology targetting production and staff productivity improvement 4.Initial projects: well monitoring and surveillance

9 Technology Planning/Roadmapping Rolling 3-5 year plan to achieve excellence in target capabilities

BASICS MONITORING (Passive) SURVEILLANCE (Active) OPTIMISE (Predictive/Proactive) 10 Integrated Asset Management Staircase Common data shared across required disciplines Visualise well and reservoir status Know what key decisions are required on what you monitor Data cleansing algorithms run automatically Established asset data hierarchy Data availability and ownership (systems of record) Infrastructure fit for purpose Roles & responsibilities defined & documented Capability of engineers to use required tools Reliable Data shared across required disciplines Trend data to understand well and reservoir behavior patterns Semi automated well test validation Integrate real time data and models Active management of performance and condition exceptions Use information to predict behaviour Anticipate problems and opportunities No manual data entry Automatically generate options for optimisation Prioritised and focused interventions Proposed Projects Future Projects Aligned Initiatives DOCC Esbjerg - Babelfish Qatar - PASC Aberdeen Key: DUC Monitoring & Diagnostics MOUK Production Surveillance GPIII Int. System ModellingMOUK Production Surveillance & optimisation all assets Rotating Equipment Monitoring - top quartile performance -

Conclusions 1.In Production Operations and Drilling IO projects it is now possible to be a “fast follower” but tailoring existing solutions to the asset remains a challenge 2.Maersk Oil is committed to become good at IO we consider it a “must have” capability to be a successful player in an EOR and CO 2 dominated future 3.We can still improve our sharing of IO experiences and results across the Industry particularly at management/leadership level 4.The IO journey continues and our younger staff love it!

Thank you for your attention ? Questions?