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IT Solutions Deliver Oil & Gas Business Value

IT Solutions Deliver Oil & Gas Business Value. Yogi Schulz Biography. Partner in Corvelle Consulting Information technology related management consulting Microsoft Canada columnist & CBC Radio host PPDM Association board member Industry presenter: Project World - 4 years

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IT Solutions Deliver Oil & Gas Business Value

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  1. IT SolutionsDeliver Oil & GasBusiness Value

  2. Yogi SchulzBiography • Partner in Corvelle Consulting • Information technology related management consulting • Microsoft Canada columnist & CBC Radio host • PPDM Association board member • Industry presenter: • Project World - 4 years • CIPS Informatics - 7 years • PMI - Information Systems SIG - 2 years • Convergence - 4 years • PPDM Association - several years

  3. PresentationOutline • Presentation objectives • Oil & gas business trends • IT solutions • Conclusions • Recommendations • Questions & Answers

  4. PresentationObjectives • Recognize business trends that are influencing the oil & gas business • Appreciate the business pressures that oil & gas executives are responding to • Describe IT solutions for the business trends Presentation intended to spark ideas

  5. Squandering OurOil & Gas Resources

  6. Oil & Gas Business Trends • Asset mix/Optimization • Shareholder return • Oil & Natural gas price • Technology • Workforce demographics • Globalization • Environment

  7. Offshore SAGD Asset MixOptimization • Trend Description: • Depletion of onshore & conventional reserves • NOC ownership of reserves • Business Responses: • Focus on deep water basins • Shift to unconventional reserves • Grow through acquisition • Divest non-core assets • Manage risk formally

  8. Asset MixOptimization Business Response IT Solution Deep water basins Remote operations Unconventional reserves Engineering application portfolio Faster, cheaper asset integration Acquisitions for growth Non-core asset divestiture Acquisition/divestiture modeling Formal risk management Risk management tools

  9. Asset MixOptimization I hope they’reNOT lookingfor oil!

  10. Shareholder Return TSE • Trend Description: • High return expectations • Increasing focus on compliance • Business Responses: • Increase returns • Reduce costs • Reduce capital requirements • Improve reporting processes • Improve marketing NYSE

  11. ShareholderReturn Business Response IT Solution Rate of return Key performance indicators Cost reduction CAPEX & OPEX reporting Design, procurement, logistics Capital requirements Data gathering/reporting Financial & reserves reporting Marketing & communication Web presence & visualization

  12. ShareholderReturn W Why can’t somebody do somethingabout these high gas prices?

  13. Oil & Natural Gas Price $4.00 • Trend Description: • Uncertainty/volatility • OPEC control • Increasing demand • Business Responses: • Operate hedging • Manage trading risk • Operate storage • Review strategic plan $13.00 $1.00 $70.00 $140.00 $40.00

  14. Oil & Natural Gas Price Business Response IT Solution Hedging Financial transaction management Trading risk management Risk and contract management Storage Storage/ inventory management Strategic plan review Scenario planning

  15. Oil & Natural Gas Price

  16. Technology • Trend Description: • Better materials, machining • Richer application software • Business Responses: • Rationalize supply chain • Employ visualization • Drill directionally • Operate smart oilfields • Enhance seismic interpretation

  17. Technology Business Response IT Solution Supply chain rationalization Procurement, materials management Immersive visualization 3-D visualization, collaboration Directional drilling Sub-surface modeling systems Smart oilfields Remote sensing, telecommunication Seismic interpretation Improved software

  18. Technology

  19. Engineering IT Land Marketing Exploration Workforce Demographics • Trend Description: • Aging workforce • Shrinking workforce • Changing demographics • Business Responses: • Manage knowledge • Outsource • Collaborate • Revise work arrangements • Form new alliances

  20. Workforce Demographics Business Response IT Solution Knowledge management Knowledge management, metadata Outsourcing Supplier performance management Collaboration facilities, tools Collaboration New work arrangements Citrix, VPN, ECM, mobile New relationships/alliances Extend network, remote access

  21. WorkforceDemographics

  22. Globalization • Trend Description: • Asian development & expansion • Former Soviet Union development • Government activism • Corporate citizenship expectations • Business Responses: • Form new ventures/alliances • Enhance communication/lobbying • Understand different cultures • Operate in multiple centers

  23. Globalization Business Response IT Solution New ventures/alliances Wide area network, remote access Communication/lobbying Global connectivity Multi-lingual applications, support Cross cultural understanding Multiple operation centers Distributed operations

  24. Globalization Stealing oil Stealing natural gas

  25. Over 400 in North Sea Environment • Trend Description: • Maritime law • Health, safety, environment • Disposal of inactive facilities • Increasing litigation • Business Responses: • Emphasize HSE • Research alternative fuels • Reduce footprint • Communicate/lobby Exxon Valdez

  26. Environment Business Response IT Solution HSE attention/investment Incident tracking, e-learning Alternative fuels Simulation, modeling Engineering design tools Reduced footprint operations Communication/lobbying Web communication/design

  27. Environment

  28. Conclusions Oil & gas business trends: • Asset Mix Optimization • Shareholder Return • Oil & Natural Gas Price • Technology • Workforce Demographics • Globalization • Environment Information Technology is central to meeting the challenge How ready for the challenges are you?

  29. Recommendations • Respond to oil & gas business trends with IT solutions • Maintain awareness of leading IT practices employed by others • Leverage IT capabilities to: • Improve operational effectiveness • Support business strategy

  30. And now Henderson from ITwill introduce his 25-part planfor more spontaneity Discussion

  31. IT Solutions Deliver Oil & GasBusiness Value Corvelle Consulting 300, 400 - 5 Ave. S. W. Calgary, Alberta T2P 0L6 Phone: (403) 249-5255 E-mail: YogiSchulz@corvelle.com Web: www.corvelle.com Yogi Schulz Partner of Corvelle Consulting Information technology related management consulting Microsoft Canada columnist & CBC Radio host Industry presenter PPDM Association board member

  32. Management Expectationsof IT • Operate a high-availability computing environment • Operate rich application functionality • Lead the way to high data quality • Offer superior client support services • Promote the value of IT in the business planning process • Lead the systems delivery process with proven methods

  33. IT Management Point of ViewPast & Future

  34. IT's biggest money wasters • Excessive software licensing • The e-mail monster • IT projects gone wild • Excess bandwidth • Gold-plated service-level agreements • Too much paper usage

  35. Six IT Technologies for 2011

  36. Bogus Trends Dave Webb: The opinion leaders I care about aren't wasting their time on Facebook I don't want to sound like a crank, but I hope that 2011 is the year that people realize that Facebook is entirely irrelevant to their lives

  37. Renewable EnergyAlternatives Good for you, RatAustralians are pioneersin energy alternativeslike solar and wind . . .

  38. New Technologiesfor 2011 • Consumerization of IT: • Staff are now often ahead of the organization in their familiarity with technology • External cloud: • The external cloud creates an opportunity for the organization but challenges IT’s traditional role • Remote and mobile workers: • Organizations are experiencing a reduction in the number of employees who work exclusively from the office

  39. Bibliography- 1 • Accsys Corp. – Knowledge Management • www.accsys-corp.com/Who_Are_We/Knowledge_Management/knowledge_management.html • Alberta oil & gas - Business Plan 2003-06 • www.finance.gov.ab.ca/publications/budget/budget2003/energy.html • The beauty of data visualization - David McCandless • http://www.ted.com/talks/david_mccandless_the_beauty_of_data_visualization.html?ga_source=embed&ga_medium=embed&ga_campaign=embed • Can Oil Giants and Green oil & gas Mix? • Business Week Oct 02, 2002 • www.geni.org/globalenergy/library/media_coverage/business-week-online/can-oil-giants-and-green-energy-mix.shtml • Characteristics and Possible Impacts of a Restructured OCS Oil and Gas Industry in the Gulf of Mexico – MMS • www.mms.gov/itd/abstracts/95-0055a.html • www.mms.gov/eppd/socecon/gom-issues.htm • CIOs in 2011: The IT roles and strategies in high demand • CIO Magazine, 03 Jan 2011 • http://www.itworldcanada.com/news/cios-in-2011-the-it-roles-and-strategies-in-high-demand/142215?sub=108297&utm_source=108297&utm_medium=leadership&utm_campaign=enews • CIO priorities: What must we do better in 2011 • Silicon.com, Mark Samuels, 13 January 2011 • http://www.silicon.com/management/cio-insights/2011/01/13/cio-priorities-what-must-we-do-better-in-2011-39746806/2/ • The Competitive Challenges • Kenneth T. Derr, Chairman of the Board and Chief Executive Officer, Chevron Corporation • San Francisco, California, September 6, 1996 • www.chevrontexaco.com/news/archive/chevron_speech/1996/96-9-06.asp

  40. Bibliography- 2 • Developing Human Resources for the Future Oil & Gas Industry • www.slb.com/press/inside/print_article.cfm?ArticleID=194 • The Digital future of Oil and Gas in a Life Cycle Perspective • www.teknologiforlaget.no/ files/digital_future_-_dnv_software.pdf • Editors on the Future of oil & gas - Online Forum: Sept. 21, 2004 • msnbc.msn.com/id/6064719/site/newsweek/ • Eight Wrong Ways To Think About The Future Of Energy • By: Nikiforuk, Andrew, Canadian Business, 00083100, 1/17/2005, Vol. 78, Issue 2 • Employment Trends in Oil & Gas Extraction • www.eia.doe.gov/oiaf/issues/oil_gas.html • The Environment for Future Business - Efficiency will win • Jesse H. Ausubel • phe.rockefeller.edu/future_business/ • Environmental Trends • www.dpi.qld.gov.au/extra/pdf/business/1envrn.pdf • Expect a hot polluted future, says EU forecast • By: Pearce, Fred, New Scientist; 5/24/2003, Vol. 178 Issue 2396, p8, 3/4p, 1c • ExxonMobil Investment Approach • www.exxonmobil.com/corporate/Newsroom/Publications/eTrendsSite/chapter2.asp • ExxonMobil Releases Study on oil & gas Trends, Greenhouse Gas Emissions and Alternative Energy • www.scandoil.com/moxie/news/company_news/exxonmobil-releases-study.shtml • www.peakoil.net/Publications/20040201ExxonMobil.pdf

  41. Bibliography- 3 • Future Natural Gas Supplies & the Ultra-Deepwater Gulf of Mexico • 12 March 2003 • www.energypulse.net/centers/article/article_display.cfm?a_id=232 • The Future of the oil & gas Industry • www.globalchange.com/ppt2/energyforum5/ • www.globalchange.com/ppt/exxonmobil3/ • Future roles of business in society: the expanding boundaries of corporate responsibility and a compelling case for partnership • www.wbcsd.ch/plugins/DocSearch/details.asp?type=DocDet&ObjectId=MTMzNjY • Future of the Oil & Gas industry: Past Approaches, New Challenges • Harry J. Longwell, Director and Executive Vice President, ExxonMobil Corporation • www.worldenergysource.com/articles/pdf/longwell_WE_v5n3.pdf • Gas Demand & Supply Overview: Getting Past The Near Term Difficulties • www.seniorscientist.org/SSEPres1/ • Hubbert Peak of Oil Production • www.hubbertpeak.com

  42. Bibliography- 4 • Information Technology in the Oil and Gas Industry in Latin America • By Jorge Grinpelc and Richard Siegfried, PricewaterhouseCoopers, SOACAT • www.pwcglobal.com/gx/eng/about/ind/energy/itog.pdf • IT Business Trends 2010 • en.sap.info/smart-grid-enterprise-cloud-mobile-app-2/21376 • IT trends putting oil companies on the road to maximized values • April 11, 2003, PradeepAnand • houston.bizjournals.com/houston/stories/2003/04/14/focus4.html • Large offshore platform packs up • http://www.cowi.dk/news/UK/2003/Oktober2003/Stor_produktionsplatform_skal_skrottes_uk.asp?COWIframe=OK • Long Lake bitumen project • www.longlake.ca/default.asp • Looking at Our oil & gas Future • by Russell Felton • www.imperialoil.ca/Canada-English/thisis/publications/2004Q1/pages/energyFuture.html

  43. Bibliography- 5 • Managing Risk in an Uncertain World • www.globalchange.com/ppt/risk/ • New Old Econmy Challenges Scarcity Assumption • www.futurist.com/futuristnews/archive/archive__new_old_economy.htm • The Oil Sands Story • www.oilsandsdiscovery.com • Oil & Gas Forecast: This Year and Through 2025 • By Katrina C. Arabe • news.thomasnet.com/IMT/archives/2004/06/oil_gas_forecas.html • Oil And Gas Industry - Strategies For Profitable Growth – SAP • www.sap.com/industries/oil-gas/pdf/BWP_Strategies_Growth_Oil_Gas.pdf • Oil & gas photo gallery • www.canadian-wellsite.com/ Gallery/gallery.htm • The Oil Patch gets Slippery • BusinessWeek, 28 February 2005, p. 52 • Oil Price History and Analysis • www.wtrg.com/prices.htm

  44. Bibliography- 6 • Peak Oil: an Outlook on Crude Oil Depletion • By C.J.Campbell - Revised February 2002 • www.mbendi.co.za/indy/oilg/p0070.htm • Petroleum Industry Perspective briefing - IHS Energy • Risky business - trends and issues in the geophysical business • Mark Klingbeil - Vigorex Consulting Ltd. • www.cseg.ca/conferences/2002/2002abstracts/Klingbeil_M_Risky_Business_BUS-1.pdf • Seven factors that drive today’s gas shale business • webcache.googleusercontent.com/search?q=cache:http://warlickenergy.info/oil-gas-articles/seven-factors-that-drive-todays-gas-shale-business/ • The slumbering giants awake - oil & gas companies will never be the same again • Feb 8th 2001 - The Economist • www.economist.com/surveys/displayStory.cfm?Story_id=497418 • Statement On New World Trends And The Future Of Oil & Energy • www.hazelhenderson.com/recentPapers/finalVancouverStatement.html

  45. Bibliography- 7 • Trends Driving Advancements In High-Performance Computing, Visualization • www.sgi.com/pdfs/3303.pdf • UKOOA - Meeting the Challenge - Investment Intentions • www.ukooa.co.uk/issues/economic/econ01/econ01_challenge.htm • Understanding the strategic value of IT in M&A • Hugo Sarrazin and Andy West , McKinsey Quarterly, January 2011 • http://www.mckinseyquarterly.com/Corporate_Finance/M_A/Understanding_the_strategic_value_of_IT_in_MA_2709?gp=1 • Visualizing the Future: The Upstream Industry Unleashed by Technology • September 2004 - CSEG RECORDER • www-1.ibm.com/industries/cpe/download0/22030/chemical_visualizing.pdf • www-1.ibm.com/industries/cpe/download8/19589/chem_petro_emerg_technol_1.pdf • What oil & gas Industry Trends will Affect Your Business? • July 21st, 2010 - oil & gas Business Daily • energybusinessdaily.com/power/what-energy-industry-trends-will-affect-your-business/ • Why The CIO Role Is Under Fire • Nov. 22 2010 - Forbes • http://blogs.forbes.com/ciocentral/2010/11/22/why-the-cio-role-is-under-fire/?boxes=techchanneltopstories • You can't tell the players without a scorecard • By: Ryser, Jeffrey; Mullen, Theo, Platts oil & gas Business & Technology, 1540367X, Sep2003, Vol. 5, Issue 7

  46. High availability computing infrastructure Rich application portfolio High quality data Superior support services Low cost Information Technologyis Enabling Technology What does the business want?

  47. “I can’t login” “My PC crashes” “The applications I need aren’t available” “The data I need is poor” “IT never gets it right” Unhappy customers Severe, even ridiculous, cost pressure Little or no investment Inappropriate/excessive outsourcing IT Alignment with the BusinessPoor Alignment Descriptions Consequences

  48. “Computing is available when I need it” “I can access the applications I need” “IT is helping me to improve my data” “I understand my role in the systems delivery process” Happy customers Reasonable cost expectations Willingness to make investments Little outsourcing IT Alignment with the BusinessGood Alignment Descriptions Consequences Good IT Alignment is difficult to maintain

  49. IT Trends Cloud computing High-availability IT services Mobile workforce Consumer technology usage in corporate setting Collaboration – Virtual workforce/teams Social computing Compliance Cyber security Staffing issues

  50. Corvelle Drives Concepts to Completion

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