1 Production SIG and PRODML™ Work Group Meetings Alan Doniger Chief Technology Officer POSC Aberdeen, Scotland 20 September 2006

2 Today’s Meeting Host BP: Rusty Foreman, Julian Pickering, Sophie Rickman

3

4 Board Economics Reservoir Engineering Expl Geology PetrophysicsPetroleum Engineering Drilling Engineering Production Geology Production Engineering Facilities Engineering Production Operations Geophysics Drilling Operations Completion & Workover In an overall E&P context …

5 Production SIG, October 20 Agenda 08:00 Registration and Breakfast 08:00 Registration and Breakfast 08:30 Meeting Begins 08:30 Meeting Begins Welcome and Introductions Welcome and Introductions Production SIG Overview Production SIG Overview Norway’s Integrated Information Platform Project (IIP) Norway’s Integrated Information Platform Project (IIP) WITSML Production Reporting Standards and the Norway OLF Daily Partner Production Reporting Deployment WITSML Production Reporting Standards and the Norway OLF Daily Partner Production Reporting Deployment Questions & Answers Questions & Answers 10:00 Morning Break 10:00 Morning Break

6 Production SIG, October 20 Agenda 10:30 Meeting Continues 10:30 Meeting Continues Update on PRODML Work Group (Optimization Standards) Update on PRODML Work Group (Optimization Standards) History and Status History and Status Business Case Business Case Pilot Activities and Demos Pilot Activities and Demos Questions & Answers Questions & Answers 12:00 Lunch 12:00 Lunch

7 Production SIG, October 20 Agenda 13:00 Meeting Continues 13:00 Meeting Continues Update on PRODML Work Group (continues) Update on PRODML Work Group (continues) Public Review Results Public Review Results Plan to Publish Version 1.0 Plan to Publish Version 1.0 Transition to POSC and the Production SIG Transition to POSC and the Production SIG Production SIG Activities Production SIG Activities 14:30 Adjourn SIG Meeting 14:30 Adjourn SIG Meeting 14:30 – 15:00 PRODML Work Group Steering Committee Meeting (for PRODML Work Group members only) 14:30 – 15:00 PRODML Work Group Steering Committee Meeting (for PRODML Work Group members only) 15:00 – 15:30 Production SIG Steering Committee Meeting (for current and prospective SIG members) 15:00 – 15:30 Production SIG Steering Committee Meeting (for current and prospective SIG members)

8 Coming Attractions…

9 Houston SIG Meeting November 7, Morning This meeting will address these subjects: This meeting will address these subjects: Orientation - Organizing a North America Region: Purpose, Administration, and Plans Orientation - Organizing a North America Region: Purpose, Administration, and Plans Data Management SIG: Update on Global Unique Well Identifier Initiative Data Management SIG: Update on Global Unique Well Identifier Initiative A New SIG Being Formed: Products, Services and Equipment Classification A New SIG Being Formed: Products, Services and Equipment Classification

10 Join your E&P colleagues to hear the latest in thought leadership for upstream oil and gas standards. Catch up with exciting changes taking place at POSC: new leadership, new mission and enhanced membership value. This exciting event will introduce our Energy Standards Resource Centre, new collaborative services on offer and the development of a global open standards user community. A special hosted reception will follow immediately after the Standards Summit from 5:00 – 8:00 PM, so Register Now! Meet the new leadership Connect with E&P colleagues Catch up on new offerings DATE/TIME: November 8, :00-5:00PM Summit 5:00-8:00PM Reception PLACE: Marriott West Loop 1750 West Loop South Houston, Texas Hotel Information: marriottwestloop.com marriottwestloop.com

11 Production SIG, October 20 Agenda 08:00 Registration and Breakfast 08:00 Registration and Breakfast 08:30 Meeting Begins 08:30 Meeting Begins Welcome and Introductions Welcome and Introductions Production SIG Overview Production SIG Overview Norway’s Integrated Information Platform Project (IIP) Norway’s Integrated Information Platform Project (IIP) WITSML Production Reporting Standards and the Norway OLF Daily Partner Production Reporting Deployment WITSML Production Reporting Standards and the Norway OLF Daily Partner Production Reporting Deployment Questions & Answers Questions & Answers 10:00 Morning Break 10:00 Morning Break

12 Production SIG, October 20 Agenda 08:00 Registration and Breakfast 08:00 Registration and Breakfast 08:30 Meeting Begins 08:30 Meeting Begins Welcome and Introductions Welcome and Introductions Production SIG Overview Production SIG Overview Norway’s Integrated Information Platform Project (IIP) Norway’s Integrated Information Platform Project (IIP) WITSML Production Reporting Standards and the Norway OLF Daily Partner Production Reporting Deployment WITSML Production Reporting Standards and the Norway OLF Daily Partner Production Reporting Deployment Questions & Answers Questions & Answers 10:00 Morning Break 10:00 Morning Break

13 What’s in a name? xField SIG (2003) xField = { SmartField, i-field, e-field, Digital Oilfield of the Future, Intelligent Field, Field of the Future … } Integrated Operations SIG (2004) Production SIG (2006)

14 Production SIG Overview January 2003, Boston January 2003, Boston POSC Board recommends strategic focus on production standards to support future digital oilfield operations. POSC Board recommends strategic focus on production standards to support future digital oilfield operations. May 2003, Houston and London May 2003, Houston and London “xField SIG” seminars “xField SIG” seminars Presenters: BP, Shell, Halliburton, Invensys, OSIsoft, Schlumberger, SGI Presenters: BP, Shell, Halliburton, Invensys, OSIsoft, Schlumberger, SGI November 2003, Houston, POSC Annual Meeting November 2003, Houston, POSC Annual Meeting January 2004, Houston January 2004, Houston Joint seminar with U. of Houston Joint seminar with U. of Houston March 2004, London March 2004, London Distributed Temperature Survey work group meeting Distributed Temperature Survey work group meeting

15 Production SIG Overview May 2004, Houston May 2004, Houston OTC Digital Energy Session: Peter Goode (Schlumberger SIS President), “The key technical components for Version 1 of the Digital Oilfield are already available.” OTC Digital Energy Session: Peter Goode (Schlumberger SIS President), “The key technical components for Version 1 of the Digital Oilfield are already available.” Joint seminar with U. of Houston – attempt to initiate collaborative activities Joint seminar with U. of Houston – attempt to initiate collaborative activities BP, ExxonMobil, Shell, Unocal, Aspentech, Halliburton, Invensys, Schlumberger, SGI BP, ExxonMobil, Shell, Unocal, Aspentech, Halliburton, Invensys, Schlumberger, SGI Integrated versus isolated solutions? Integrated versus isolated solutions? Monitoring, optimization and control? Monitoring, optimization and control? Multi-scale Multi-scale Data driven model development Data driven model development Abnormal situation detection Abnormal situation detection RT decision-making using large data sets RT decision-making using large data sets Surface facility – reservoir interaction Surface facility – reservoir interaction Data volume explosion  how to handle and find useful data Data volume explosion  how to handle and find useful data Safety concerns in highly instrumented fields Safety concerns in highly instrumented fields

16 Production SIG Overview June 2004, Stavanger and Houston June 2004, Stavanger and Houston “xField”  “Integrated Operations” SIG meeting “xField”  “Integrated Operations” SIG meeting BP, Chevron, ExxonMobil, Shell, Halliburton, Paradigm, Schlumberger BP, Chevron, ExxonMobil, Shell, Halliburton, Paradigm, Schlumberger Intelligent Oilfield Ops – review U. of Houston seminar Intelligent Oilfield Ops – review U. of Houston seminar DTS DTS November 2004, Houston “Int Ops SIG” November 2004, Houston “Int Ops SIG” DTS DTS Digital Oilfield (Andy Howell, Schlumberger) Digital Oilfield (Andy Howell, Schlumberger) Norway IIP Project Update Norway IIP Project Update

17 Production SIG Overview January 2005, New Delhi, “Int Ops” SIG January 2005, New Delhi, “Int Ops” SIG Integrated Operations Integrated Operations DTS DTS April 2005, Aberdeen and Stavanger, “Int Ops” SIG April 2005, Aberdeen and Stavanger, “Int Ops” SIG DTS DTS Norway Daily Partner Production Reporting (TietoEnator) Norway Daily Partner Production Reporting (TietoEnator)  WITSML for Production Reporting  WITSML for Production Reporting RT Operations (Sense Intellifield) RT Operations (Sense Intellifield) Norway IIP Project Update Norway IIP Project Update April 2005, Stavanger April 2005, Stavanger Norway OLF Integration Operations Seminar Norway OLF Integration Operations Seminar May 2005, Houston, “Int Ops” SIG May 2005, Houston, “Int Ops” SIG Same as April Same as April Statoil and Hydro on Integration Operations Strategy and Vision Statoil and Hydro on Integration Operations Strategy and Vision Also, Merrick Systems, Sense Intellifield, Roxar, Weatherford Also, Merrick Systems, Sense Intellifield, Roxar, Weatherford May 2005, London, DTS Work Group Meeting May 2005, London, DTS Work Group Meeting

18 Production SIG Overview August 2005, Houston, PRODML Initiative Kick-Off Meeting August 2005, Houston, PRODML Initiative Kick-Off Meeting November 2005, POSC Annual Meeting November 2005, POSC Annual Meeting Updates on WITSML Production Reporting and Norway IIP Project Updates on WITSML Production Reporting and Norway IIP Project December 2005, PRODML Work Group formally established December 2005, PRODML Work Group formally established December 2005, WITSML V1.3.1 Published December 2005, WITSML V1.3.1 Published With WITSML Production DTS With WITSML Production DTS March 2006, Houston, Production SIG March 2006, Houston, Production SIG WITSML Production Reporting WITSML Production Reporting WITSML Production DTS WITSML Production DTS WITSML Production Fluid Properties WITSML Production Fluid Properties PRODML Work Group Update PRODML Work Group Update April 2006, WITSML Production Reporting April 2006, WITSML Production Reporting (V1.3.1 Addendum) Published (V1.3.1 Addendum) Published

19 Production SIG Overview May 2006, Houston, Production SIG May 2006, Houston, Production SIG Norway IIP Project Update Norway IIP Project Update WITSML Production Reporting / Norway Partner Reporting WITSML Production Reporting / Norway Partner Reporting WITSML Production Fluid Properties WITSML Production Fluid Properties PRODML Work Group Update PRODML Work Group Update WITSML Production DTS WITSML Production DTS June 2006, Stavanger and Aberdeen June 2006, Stavanger and Aberdeen Same as May Same as May September 14 & 28, October 3, 2006, Production SIG Steering Committee Conference Calls September 14 & 28, October 3, 2006, Production SIG Steering Committee Conference Calls October 20, 2006 Today’s event October 20, 2006 Today’s event

20 What Was Being Said Back in mid-2004?

21 Some related activities CERA DOFF SPE Real Time Operations TIG SPE Digital Energy Study Group API/GCIMT eFields Project Real Time Reservoir Management [TTG Group-OG21] WITSML Drilling SIG Strategic Decision Sciences UH CIOO … Many internal / joint projects in oil / service companies …

22 The Smart Field Real-Time Operations Capture Process Store Analyze Simulate Capture Visualization Web Facilities Wells Reservoir Real-Time Automated Analysis Real-Time Understanding Real-Time Operations Source: Landmark

23 Smart Systems From self-guiding missiles to self-replenishing fridges, the basic approach of all “smart technology” is measure-model-control –measure system properties –model actual vs. desired behaviour –derive required correction parameters (adaptive control) –implement control ∆ xField Acquire Model Analyze Control Source: Shell

24 Automation level Time-scale Fast cycle Slower cycle Source: Saputelli SPE Time Scales (10 6 range) xField Acquire Model Analyze Control

25 CERA DOFF: Stated Industry benefits Enhanced recovery: 125 billion BOE Lower operating costs: $4-8 billion/year/company Increased production rates: increase utilization 2-6% Lower facilities cost: 5-10% (3-5 years) Decreased drilling costs: 5-15% But Benefits are not independent, and they require Integration of higher quality data Significant change in organizations and work processes Source: CERA DOFF executive summary Total asset awareness Acting on awareness Increased use of full asset awareness

26 Comments from Operators Better decisions faster $250 million USD / year cost savings It’s not about the technology Integrate facilities, wells, subsurface Find right level of ‘smartness’ for each asset

27 Layered Architecture Ref: SPE 79893

28 POSC xField: suggested work XML standards for collaboration extending footprint of WITSML to include all data types required for Production System Surveillance and Reservoir Surveillance Smart Sensors what is needed for plug-and-play at each level of OSI model API’s for downhole intelligent devices, protocols (SOAP?), metadata and metadata management Market Studies smart surveillance for “shared services” in data acquisition and management, value-added services (pre-processing, analysis, interpretation) publishing,… potential business models, and implementation technologies: web services.

29 POSC xField Approaches Understanding / problem identification - pursue problems with clear (shared) business purposes Adopt / adapt WITSML -new Data Types to focus on Production Operations - production volumes, production tests, temperature, pressures Focus = Architectures + Data Develop standards via Pilot Projects Players = oil + service + regulators Incremental, rapid results Catalogues of related work / relevant standards

30 An oil company perspective on Standards Standards save money! uniform hardware, applications, data save $100 Million/year Standards lead to better science, which increases value Use standards to address interface issues It’s better to get common than to be best Industry standards provide cost effective bridge to the digital oil field

31 Production SIG, October 20 Agenda 08:00 Registration and Breakfast 08:00 Registration and Breakfast 08:30 Meeting Begins 08:30 Meeting Begins Welcome and Introductions Welcome and Introductions Production SIG Overview Production SIG Overview Norway’s Integrated Information Platform Project (IIP) Norway’s Integrated Information Platform Project (IIP) WITSML Production Reporting Standards and the Norway OLF Daily Partner Production Reporting Deployment WITSML Production Reporting Standards and the Norway OLF Daily Partner Production Reporting Deployment Questions & Answers Questions & Answers 10:00 Morning Break 10:00 Morning Break

32 Production SIG, October 20 Agenda 10:30 Meeting Continues 10:30 Meeting Continues Update on PRODML Work Group (Optimization Standards) Update on PRODML Work Group (Optimization Standards) History and Status History and Status Business Case Business Case Pilot Activities and Demos Pilot Activities and Demos Questions & Answers Questions & Answers 12:00 Lunch 12:00 Lunch

33 Production SIG, October 20 Agenda 13:00 Meeting Continues 13:00 Meeting Continues Update on PRODML Work Group (continues) Update on PRODML Work Group (continues) Public Review Results Public Review Results Plan to Publish Version 1.0 Plan to Publish Version 1.0 Transition to POSC and the Production SIG Transition to POSC and the Production SIG Production SIG Activities Production SIG Activities 14:30 Adjourn SIG Meeting 14:30 Adjourn SIG Meeting 14:30 – 15:00 PRODML Work Group Steering Committee Meeting (for PRODML Work Group members only) 14:30 – 15:00 PRODML Work Group Steering Committee Meeting (for PRODML Work Group members only) 15:00 – 15:30 Production SIG Steering Committee Meeting (for current and prospective SIG members) 15:00 – 15:30 Production SIG Steering Committee Meeting (for current and prospective SIG members)