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December, 2001

Information Forum PricewaterhouseCoopers Consulting Framework, Capabilities and Citations with Your CONOCO Cost Reduction Challenges. December, 2001. CONOCO Cost Reduction Topics. PwC Consulting is happy to accommodate your request for discussion on... Operations and support applications

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December, 2001

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  1. Information ForumPricewaterhouseCoopers Consulting Framework, Capabilities and Citations with Your CONOCO Cost Reduction Challenges December, 2001

  2. CONOCO Cost Reduction Topics PwC Consulting is happy to accommodate your request for discussion on... • Operations and support applications • 1. Feedstock acquisition • 2. Pipeline scheduling • 3. IMPACS billing system • 4. Corporate procurement and materials management • 5. Human resources • IT Infrastructure • 6. Support Sakhalin energy initiative • 7. Accommodate year 2000 challenges • 8. Investigate Extranets • 9. Implement NT platform Against the backdrop of the new merger challenge

  3. CONOCO Cost Reduction Challenges Largest challenge now facing Conoco is the merger with Ashland... • Achieve merger benefits • Rationalize the supply system • Improve refinery profitability • Leverage global crude/product supply Operations Challenges • Selecting-implementing common IT applications • Identifying and applying best practices • Keeping the best people IT Support To Support a Much Larger Business

  4. Conoco Phillips Challenges Conoco - Phillips now has 62% control of one of the largest USA refiners... COMBINED • Texas City, TX • Detroit, MI • Robinson, IL • Garyville, LA • 575,000 BCD • Catlettsburg, KY • St. Paul Park, MN • Canton, OH • 355,000 BCD 930,000 BCD • Marathon • Starvin’ Marvin • Speedway • Findlay, OH • Ashland • Super America • Rich • Lexington, KY • 20 states • 5400 sites • 5.2% market share

  5. Agenda to Help you Meet the Challenges Time (minutes) • PW Consulting Framework 20 • Charles Kafoglis • IT Challenges • Supply • Refining • Trading • IT Topics & Merger Challenge • Topic-by-Topic Discussion • Wrap up - What’s Next • Charles Kafoglis

  6. A Suggested Downstream Business Model Downstream cost reductions must now look across the entire business... Global Supply, Trading and Risk Management Processing Transport & Distribute Sell to Wholesale & Retail Supply Crude Crude Selection Refining

  7. Topic-by-Topic Discussion Operations and support applications to achieve merger benefits... Infrastructure Issues Identified PW Experience PW Tools • New leverage - 930,000 BCD • Domestic refineries - imported crude • Mix of crude/feeds affect refineries • More complex network • SCADA changeover • Alternative to financial reporting • Cut back to billing system • Bulk vs. rack vs. specialties • EDI • Blueprint teams established • Procedures/practices • Centralized deals: Field releases • PeopleSoft priced high - inflexible • ADP & associated consulting firm • Star Enterprise • Koch S&T • Lagoven STARS • Koch DTS/ESP • Star Enterprise • BP Order Fulfillment • Koch RPMI • Hess SAP/Re-engineering • Ashland • Hess Re-engineering • Noble Drilling • Selected PeopleSoft for PW • Large implementations • PW STARS 3.0 • Refinery KPI’s • PREMAS First Purchaser • PW STARS 3.0 • Manugistics experience • PREMAS • PW STARS 3.0 • SAP templates • KnowledgeView • Best Practices • National Practice Focus • KnowledgeView • Best Practices • Templates 1. Feedstock Acquisition 2. Pipeline Scheduling 3. IMPACS Billing System 4. Corporate Procurement & Materials Management 5. Human Resources

  8. Topic-by-Topic Discussion IT data and technology infrastructure needs a global view... Infrastructure Issues Identified PW Experience PW Tools • IT network requirements • Marathon completed assessment • 60% done by YE 97 • Ashland position • Business to business communication • Domestic and international • Downstream-upstream-corporate • From Novell to NT • Scalability • Review, plan, where are traps? • Compaq worldwide • Moscow office now 1000 staff • JV with Lu3 Consulting • Ashland work • SAP implementation • Bank/finance experience • EDI founder of SAP functionality • Lotus notes ‘B’ site with gateway • SISP • SI-integration practice • SISP • A PW focus area • Tools • SISP • Technology Center - Menlo Park • SISP • Technology Center - Menlo Park 6. Sakhalin Energy Support 7. Year 2000 Challenge 8. Extranets 9. Implementation of NT

  9. What’s Next - Options Very important to have objective understanding of IT needs/capabilities... Propose a joint CONOCO-Phillips-TOSCO & PwCC Study Team • Structured - objective approach • Extra set of hands to IT staff • Find/apply best practices - quick hits • Incorporate change management to keep skilled IT staff • Build on... Review of Strategic Information Systems Plan March - July 1996 SAP Re-engineering Jan. - June 1997

  10. International Petroleum Clients • PricewaterhouseCoopers believes strongly in its ability to help downstream petroleum clients implement major change and dramatically improve bottom line performance. This confidence is based on a history of satisfying and exceeding client expectations on a variety of global consulting projects in the petroleum industry. • Listed below are representative international clients in the petroleum industry where PricewaterhouseCoopers has assisted with the implementation of business process improvement and/or major information system implementations. • Amerada Hess • Amoco • Amoco/Exxon Chemical Joint Venture • Amoco Malaysia • Ampol Refining - Australia • British Gas • British Petroleum • Chevron • Clark Refining • Conoco • ED&F Man Group • Exxon Chemical • Exxon Company, U.S.A. • Koch Industries • Lagoven. S.A. • Marathon • Maraven. S.A. • Neste Oy • New Zealand Refining • SAMAREC • Saudi Aramco • Shell Austria • Shell Oil - Commercial Products Div. • Shell Trading • SONAT Exploration • Star Enterprise • Total Oil 4 4 4 4 4 4 4 4 4 4 4 4 4 Citations Included

  11. Ampol Refining - Australia Key Performance Indicators Price Waterhouse has work underway to develop key performance indicators (KPI’s) for Australia Petroleum Company (AMPOL). AMPOL has approximately 30 % of the refining capacity in Australia with two large refining facilities and a lubricants manufacturing plant. PW developed a comprehensive set of KPI’s across the entire supply chain including: crude selection and procurement, refinery operations, inland product distribution, contract transportation and retail/C-store sales management. The work was initiated by the AMPOL top management team to improve the performance of the refinery, distribution and retail network. The PW global network was used to collect Best Practices and determine the 20-30 board level KPI’s which would drive the operating measures. BP UK - Oil Trading Inc. (OTI) BP’s OTI affiliate is considered by many in the industry to be the global benchmark for effective centralized supply, trading and risk management performance. PW was requested to do a detailed redesign study of the front, middle and back office operations to improve service to internal and external customers. Six distinct acquisition and sale processes were reviewed: crude & feedstocks, products, LPG, futures/options, derivatives and outside processing. Over 200+ OTI staff were involved with detailed validation sessions and six cross-functional workshops to define a vision for the new OTI business. Ultimately all divergent processes were standardized and new performance measures were implemented to tighten control in a constantly volatile environment. High level system requirements were also defined to give OTI a responsive, unified decision making tool and data repository. Related Downstream Citations

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