PIDX Supplier KPI Project Update May 28th 2014 Michael Washington, Conocophillips Daryl Fullerton, Actian / PIDX © PIDX, Inc. 2012 1

Supplier KPI Project Overview The PIDX Supplier KPI Projects main focus is to develop a Supplier KPI Dictionary (Phase 1) ending in Q4 2014 followed by the development and automation of Supplier KPI data transfer between Suppliers and Oil & Gas Operators (Phase 2) beginning in 2015. Phase 1 project objectives are to compile an Industry Data Dictionary for Standardization of KPI terminology and definitions, e.g. NPT, TRIR etc Focus: Upstream / Downstream Commenced: 2011 Participants : c80 Contact: Daryl Fullerton dfullerton@pidx.org Mike Washington michael.washington@conocophillips.com Key Drivers – Why we Need Industry Wide KPI Definition Chaos between different Operator KPI Definitions and the Supply Chain Supplier Base Scorecard Overload Cost Savings Time = Money Better Data Accuracy Improved Data QA/QC Scorecard impact on working conditions. Wins when Implemented Standardization on KPI Terminology Industry Recognized and endorsed Supplier KPI Data Dictionary. Significantly better QPR’s Cost savings for Service Companies More Accurate Data for Operators Standard for Supplier KPI Data Transfer © PIDX, Inc. 2012 2

Industry – Current State of SPM Many Operators have SPM Initiatives in operation or underway. Often Contract Awards for a new Supplier based on WOM or past performance but KPI Terminology / Definitions may differ. – Big Problem Area Many KPI initiatives are Regionally Focused or Category Line Focused with no Global Company Wide KPI role up. Very few provide Visibility on KPIs on Real Time to Suppliers Often no way of telling whether A team or B team until things go wrong – Likeness to Political Campaigns / Elections No way of facilitating regional Specific KPIs that Matter. Huge Drive to Standardise KPI terminology. Apples with Apples and Like with Like. Automated of KPI data gathering extremely low. Confidential © 2012 Actian Corporation 3

Supplier KPI Data Dictionary Update (May 2014) Accomplishments to Date Template for Data Collection Agreed. 5 Performance Areas Defined and Agreed. Over 450 KPI’s recieved and in progress of being added to Master Data Dictionary KPI’s Submitted by 15 Companies Planning for Conversion of KPI Dictionary Spreadsheet to from Excel to Data Base underway. © PIDX, Inc. 2011

Performance Areas (Level 1) Framework Agreed –Sept 14th 2012 Level 1 QUALITY SUPPLIER DELIVERY COST BEHAVIOUR HSE 5 21/04/2017 Classification: Internal

Work Group Meeting Outcomes Houson May 14th ConocoPhillips , Houston Texas 5 Hour Meeting 30 Attendees / Participants Outcomes Review Progress 65 Similar KPIs Operator Challenges on Standardization Supplier Challenges on Standardization Business Case for Operators Business Case for Suppliers Proposed KPI Standardization Sheet (Version 2) © PIDX, Inc. 2011

Takeaway Template Discussed

Challenges for Operators and Suppliers Outcomes Workgroup Meeting working secession May 14, 2014 Operators Challenges Supplier Challenges Internally many different definitions for Same KPI Time Taken to Approve and Validate Data. Lack of System Integration lacking Executive sponsorship –Busines Case Needed Internal agreement within our BU’s and globally on KPI Naming Conventions. Internal alignment between supply chain and operation groups Compelling business case to drive KPI standardization Supplier engagement - How do we get our suppliers on board? KPI data capture - How do we easily capture this data? I may not be the right person to drive this globally within my organization Effort involved in Managing suppliers Performance and Validating the data Legal impacts of Supplier KPI Standardization Different Operators use different Naming Conventions Operator places burdon on Suppliers to complete scorecards. Not all Operators providing visibility on data gathered. Many Operators don’t do 360 Degree KPIs and Surveys Data Duplication – Data already exists in Operator Systems – HSE Systems , Well View , Open Wells Suppliers Not always engaged at start of Operators SPM program. 8

Work Group Meeting Outcomes London May 27th GE , Houston Texas 5 Hour Meeting 30 Attendees / Participants Outcomes Review Progress Operator Challenges on Standardization Supplier Challenges on Standardization Business Case for Operators Business Case for Suppliers Identified 19 Global Common KPIs Proposed KPI Standardization Sheet (Version 2) © PIDX, Inc. 2011

KPIs to Standardize KPI Name KPI Definition Total Recordable Incident Rate (TRIR) = Recordable Cases * 200,000 / Hours Worked OSHA Severity Rate OSHA SR = (Lost Workdays + Restricted Workdays) * 200,000 / Hours Worked Lost Workday Case Incidence Rate LWIR = Lost Workday Cases * 200,000 / Hours Worked OSHA Incidence Rate (OSHA IR) = (Lost Workday Cases + Restricted Workday Cases) * 200,000 / Hours Worked Actual Costs Vs Planned Cost Days (Actual Cost of Services/Actual Operating Time (days))/(Planned Cost of Services/Planned Operating Time (days) ) NPC % OF ACTUAL COST (Total non productive Cost NPC/Actual Cost of Services)*100.0 Days per 10k (Total number of drilling days / Total feet drilled)*10,000 NPT in % of operating time (Product Line Related Total Non-Productive Time NPT (days)/Actual Operating Time (days))*100.0 Operating Efficiency % Operating Efficiency = (Operating Time-Agreed NPT)/Operating Time x 100 Days Away from Work Injury Freq. (Days Away From Work Injuries/Total Manhours)*200000.0 Stop Cards Issue Rate Number of Stop Cards recorded for the supplier per 200,000 man hours Recordable Injuries and Illnesses Frequency (No. of Recordable Injury and Illnesses*200000.0)/No.of Man-hours worked % Objectives Met (number of objectives met / number of objectives defined) * 100 On Time Delivery Rate On Time Delivery in Full to Specification / Total Deliveries Received Right First Time Invoicing Rate Invoices received Right First Time / Total Invoices Received *100 Days Sales Outstanding Ratio DSO ratio = accounts receivable / (annual sales / 365 days) Days Payment Outstanding Ratio DPO ratio = accounts payable / (annual sales / 365 days)

Common Global KPIs - Ver 1 (May 27th)

Next Meetings / Key Dates Houston 10th Sept - Baker Hughes Calgary – September 24th 2014 Paris – October 2014 October 2014 – Standardized KPIs Standardized KPIs – November / December 2014

Why Become Involved? KPI Dictionary Access – Exposure to More KPIs Your KPI’s are Part of a Standardized Industry wide Accepted KPI Portfolio Access to Quarterly Release of Supplier KPI Dictionary Network with Industry Peers on best practices and Lessons Learned on SRM Get Guidance on Establishing Supplier KPI’s Operator / Supplier Presentations © PIDX, Inc. 2011

Q & A Contact: dfullerton@pidx. org michael. washington@conocophillips Q & A Contact: dfullerton@pidx.org michael.washington@conocophillips.com www.pidx.org Linkedin Group: Supplier Performance Relationship Management Group (Oil & Gas) © PIDX, Inc. 2011