Shell Exploration & Production Chairman’s Message A Look to the Future Herb Yuan POSC Board Chairman Manager SIEP IT & IM Shell International EP 2005 POSC AGM Rice University, Houston, TX

Outline POSC Board Activities in 2005

POSC Board in 2005 David ArcherPOSC CEO Peter Bernard  Jon LewisLandmark Peter BreunigChevron Steve ComstockExxonMobil Tom HalboutyPioneer Stewart RobinsonUK DTI – Vice Chairman Yogesh Sinha  D.K. PandeONGC Ihab TomaSchlumberger Morag Watson BP Eldad WeissParadigm Herb YuanShell - Chairman

2005 Board Activities Board Priorities for POSC –Harness WITSML momentum and visibility –Improve standards usability –Production Data Exchange Standards – time to get it moving again –Ensure POSC relevance to member and business needs Globalization –Jan board meeting in India with 7 board members attending –POSC Asia initiated with Satyam Strategic Outlook –Gartner report out on: Case for Standards in the Oil Industry

2005 POSC Scorecard GoalsWtOn targetAbove target Workplan execution 60 Document, deploy, support, certify & drive uptake of WITSML V1.3. Draft specifications for WITSML Production standards. Execute GWI Initiative. ?? Retirement dates for V1.1 & V1.2. Manage change V1.3. Issue WITSML Production standard V1. Deployment support for draft WITSML Regulatory standards. Membership management & communicati on 15 Compelling website – web presence for standards, standards catalog, standards templates, standards use examples, deployment support, member section, collaboration, news, newsletter, transactions – ready by Sep 1. Clarify membership advantages e.g. steering committee eligibility. Robust communication plan. Increased member satisfaction as evidenced by survey information. Website generates enthusiasm and improves reputation for POSC. Increase penetration in member companies. Business development 10 Revenue increases 20% above 2004 actual; 2 new significant members. Increase revenue from WITSML SIG. Improve ease of finding and ease of use of standards. Revenue increases 33% above 2004 actual; 4 new significant members. Capture, create & tell success [value added value added through application stds] stories. Business vision, strategy & leadership. 10 Completely align standard bodies (RESCUE, PIDX and PPDM) and positioning with respect to industry Initiate regional representation in India; Complete merger with PIDX and PPDM (common membership & governance). Initiate a second region Cost efficiency 5 Meet 2005 plan expenses (Reduce costs by 10% over 2004) Achieve 90% 2005 plan expenses (reduce costs by 20% over 2004)

Why POSC? View of a Major Accelerate development and application of data standards for next generation EP company Improve data exchange by allowing internal standards to be adopted as industry standards and gain learning therefrom Share and align priorities on standards across industry Ease regulatory compliance by maximizing alignment of regulatory standards and industry standards Utilize POSC as a means of collaboration Co-create standards with vendor community to improve integration possibilities

Why POSC? View of an Independent Have an impact on what vendors design just like the majors Improve data standards – Well Curve naming standards is an example Know upcoming technologies and what larger companies are considering; sometimes they are your partners Impact standards while working with vendors and industry people so that needed tools are developed to support the new technology Accelerate application and data standards

POSC Relationships POSC MajorsIndependents Service Organization Regulatory Value Easy, reliable, timely regulatory compliance More timely data Regulatory Inputs Requirements for data transfer to regulatory agency POSC Outputs XML - electronic transfer ability tied to vendor apps Value Ability to impact standards used by service orgs Simplified data exchange Accelerate application of standards Independent Inputs Knowledge, testing POSC Outputs Usable standards Value Software assists in maintaining the standards Service Organization Inputs Current conventions and methods POSC Outputs Maintain the good but use more current technology Value Easier data exchange Major Inputs Knowledge worker process Broader testing POSC Outputs Something for the entire industry

Shell Exploration & Production

2005 Board Activities Exploring synergy with other standards bodies –POSC Caesar, Rescue,... –PIDX – PPDM – POSC board to board discussions held The POSC Board believes that a radical change in approach to developing and implementing upstream oil and gas industry standards is required and this is best achieved by a new single-point organization, encompassing current and future workflow activities and areas covered by PIDX, POSC, and PPDM. This new body should incorporate an industry strategic approach that can identify the need and value of standards in specific areas, their integration, and quickly deliver, maintain and support them.

Synergies with Industry Standards Bodies Discussions showed opportunity for synergy Boards and executives have endorsed exploring synergy steps that could lead to a single upstream standards body PIDX Executive Committee - agreement Oct 25 Discussions ongoing with PPDM

Questions put to and answered by the Boards of POSC, PIDX and PPDM 1. What is the ….. BOD response to the formation of a standards governing body? 2. What functions and authorities does the ….. BOD grant the standards governing body? 3. What constituent organizations does the ….. BOD recommend the standards governing body to include? 4. Who does the ….. BOD recommend sit on the standards governing body? 5. What priority projects or domains does the ….. BOD recommend to start off with? 6. What is the.…. BOD input into governance evolution ? 7. What are the ….. BOD steers on the operating model ? 8. Any other items to be considered ?

7. What are the … BOD steers on the operating model? POSCPPDMPIDX SIG driven Membership fees to manage base activities such as standards maintenance Align membership fees so that convergence of organizations is clear Recognize the need for the steering of specific SIGs and the key constituents Will be determined through evolution of the governance council design. Value, efficiency speed of development interoperability adoption and implementation

2005 Board Activities Improve standards delivery –More standards are needed for EP business –Improve standards delivery to meet member goals –Increase focus on SIGs; more project-based lower membership fees; higher SIG fees –New fee structure designed to increase POSC attractiveness for new members. Management changes –search initiated for new POSC CEO –board agreed that CTO to be interim CEO after December 1.

Wrap-up POSC is changing to meet the needs of industry. The POSC board wants and expects more from POSC Your participation is critical: –in SIGs –ensure you let a board member know your views The industry is committed to make POSC work