CIO Speak: Trends in IT spending and Multisourcing – key to sourcing success, P. P. (Daru) Darukhanavala,British Petroleum

Slide 1: Multisourcing at BP P.P. Darukhanavala, DCT Chief Technology Officer February 2008

Slide 2: BP Overview BP is an oil, gas, petrochemicals & renewables company We employ nearly 100,000 people …operations on 6 continents and in over 100 countries …market capitalisation of $250 billion …revenues of $270 billion in 2006 …over 25,000 service stations worldwide BP Proprietary Slide 2

Slide 3: Areas of BP Business Refining Alternative Energy Exploration & Production Fuels Marketing Lubricants & Retail Gas Chemicals BP Proprietary Slide 3

Slide 4: Where our people come from 2. 1. 1. Some Mobil employees became part of BP staff post dissolution of JV in Europe 2. BP acquired some Belgium assets BP Proprietary Slide 4

Slide 5: Two Types of Sourcing Sourcing for Services Sourcing for Innovation BP Proprietary Slide 5

Slide 6: Two Types of Sourcing Sourcing for Services BP Proprietary Slide 6

Slide 7: Sourcing for Services Journey Major Next Gen outsourcing Sourcing of IT Pioneered BPO • Better infrastructure outsourcing of HR int’l/ext’l and Pioneered BPO back office activities balance applications outsourcing of with Exult; extended Introduced using Accounting back outsourcing model to offshore • Smaller, regional office activities with single global supplier business strategic suppliers Accenture for telecom model supplier set Early 90’s Mid 90’s Late 90’s 2000 2010 1998 Developed “Shared Services” for IT, BP/Amoco HR, Accounting, HSE; merger Very professional internal services End of“Shared Services” BP moved heavily into outsourcing throughout the 1990’s; Today looking to re-balance internal / external mix BP Proprietary Slide 7

Slide 8: Two Types of Sourcing Sourcing for Services Sourcing for Innovation BP Proprietary Slide 8

Slide 9: Sourcing Digital Innovation Main sources of innovation come from outside the energy industry Technology start-ups and mainstream technology firms 18 months Military from first awareness to business adoption Consumer markets BP Proprietary Slide 9

Slide 10: CTO Created to Source and Seed Innovation Main sources of innovation come from outside the energy industry Technology start-ups Enable a fast and mainstream and efficient technology firms Rapid awareness and matching of Untr adoption within BP aditi emerging external sour onal ces technology innovation to Military business unit and group business requirements Consumer markets Business problems that may have a technical solution BP Proprietary Slide 10

Slide 11: CTO Operating Model • Small CTO team links into vast ecosystem of external knowledge sources. • The CTO team acts as a catalyst and assistant – BU’s and local teams retain ownership and control Tapping into CTO’s Tapping into the world’s ecosystem ecosystem Government Industry • “Seeker” VC Firms Forums Network • NineSigma Major Academia CTO Companies Research Firms Consultants IT Suppliers CTO is a pragmatic problem solver, not an R&D group BP Proprietary Slide 11

Slide 12: “World Firsts” Created by multi-sourcing for innovation CTO brings multiple sources together to create innovative solutions TAR Task Tracker Refinery Wireless Mobile system to Measurement automate tracking of System will help 1000s of tasks in a improve safety, turnaround event environmental compliance and process optimisation Wireless Location Aware Measurement Safety System Platform Platform to reduce Intrinsically safe equipment downtime product to locate and unplanned people in hazardous maintenance areas SK Multispectral F BP Proprietary Slide 12

Slide 13: CTO-led digital technology breakthroughs Corrosion World’s first mote system to monitor corrosion in harsh monitoring North Slope environment High Performance First implementation of commodity platform and Intel Computing Itanium technology, creating a step change in HPC performance Tanker Wireless World’s first maritime mote network developed; Measurement automatically monitors machinery status daily rather than manually every 6 weeks LPG Tank Unique satellite system monitoring customers’ LPG tanks, Monitoring enabling automatic scheduling of tank refills & logistics Rail Car Tracking First wireless sensor system to provide continuous monitoring of rail cars containing hazardous chemical products LPG Bottle Supply First integration of RFID chips into product construction, Chain Automation enabling process changes that reduce labour costs and increase safety BP Proprietary Slide 13

Slide 14: CTO-led digital technology breakthroughs Location World’s first real-time location of people at a large industrial Aware Safety location; first intrinsically safe RFID tag; increased battery System life; reduced device to badge-size Refinery World’s first intrinsically safe mote system for wireless wireless measurement in dense metal refinery environment measurement Industrial World’s first industrial mesh wireless LAN; up to 45% cost Mesh reduction for WLAN deployment enables new opportunities Network for use Turnaround First scalable system to provide automatic near real-time Task Tracker tracking of the enormous number of inter-related tasks of a turnaround Operator First system capturing best practice work-rules in Rounds handheld computers, enabling optimized processes at point of work Relief valve First motes-based wireless system monitoring ejections monitoring from release valves, reducing BP's liability and improving BP's ’green’ image BP Proprietary Slide 14

Slide 15: Thank You BP Proprietary Slide 15