Future Challenges Facing BP How technology can help. Vijay P Rao 15 June, 2007

Agenda Business environment Challenges along the Value Chain Challenges at the Corporate Level Harnessing Innovative Technology for BP Concluding Thoughts

Business environment

Challenges along the Value Chain

Challenges at the Corporate Level

Harnessing Innovative Technology for BP

Concluding Thoughts

BP’s Business Characteristics Capital Intensive Business Cyclical Business Maturing Reserves Drive to maximize Asset Efficiency Volatile Prices Inelastic Demand Streamline Processes Build Scalable Systems

BP’s Growth Trajectory Source : Trajectories of Industry Change, Anita M. McGahan, Harvard Business Review, 2004 BP would fall into this quadrant. Core Assets constantly undergo redefinition

Agenda Business environment Challenges along the Value Chain Challenges at the Corporate Level Harnessing Innovative Technology for BP Concluding Thoughts

Business environment

Challenges along the Value Chain

Challenges at the Corporate Level

Harnessing Innovative Technology for BP

Concluding Thoughts

Challenges Upstream Re-packaging assets Oil Rigs  Digital Oil Platforms Manage key areas of platforms remotely Enhance Employee Safety Achieve Cost Reductions Avoid total closure during natural calamities Oil Recovery  Optimized Oil Recovery & Refining 3D  4D Seismic exploration Horizontal Drilling ‘X’ Technology De-carbonized Fossil Fuels

Re-packaging assets

Oil Rigs  Digital Oil Platforms

Manage key areas of platforms remotely

Enhance Employee Safety

Achieve Cost Reductions

Avoid total closure during natural calamities

Oil Recovery  Optimized Oil Recovery & Refining

3D  4D Seismic exploration

Horizontal Drilling

‘X’ Technology

De-carbonized Fossil Fuels

Challenges Midstream & Downstream Managing Data Assets Data Explosion New technologies upstream and downstream Data explosion in terms of amount and data-type Data needs to be catalogued, stored, backed-up and at the same time easily accessible Safety, Security and Disaster Recovery Remote Logistics Management & Convenience Retailing Linking Upstream Energy Controlling IT systems with Downstream Data Management Systems Corporate Website & Service Hosting for other sites Oil Refining, Transportation, Safety, Drilling Workflow software Webmethods Content and Portal Management Systems like Plumtree EAI Applications like SeeBeyond ICAN, Tibco ERP systems like SAP Technology Aids

Managing Data Assets

Data Explosion

New technologies upstream and downstream

Data explosion in terms of amount and data-type

Data needs to be catalogued, stored, backed-up and at the same time easily accessible

Safety, Security and Disaster Recovery

Agenda Business environment Challenges along the Value Chain Challenges at the Corporate Level Harnessing Innovative Technology for BP Concluding Thoughts

Business environment

Challenges along the Value Chain

Challenges at the Corporate Level

Harnessing Innovative Technology for BP

Concluding Thoughts

End to End Integration Sewing up islands of automation across the value-chain Supplier Systems Ex : SAP, Proprietory Software Internal Departmental Systems Ex : Mainframe, Legacy Systems, Oracle, MS Access, CRM, ERP Customer Systems Ex : EDI, Proprietary Software S1 S2 Sn C1 C2 Cn ID1 ID2 IDn

End to End Integration Sewing up islands of automation across the value-chain Global Integration Factory EAI Tools Enabled : SeeBeyond ICAN , Tibco S1 S2 Sn C1 C2 Cn ID1 ID2 IDn Data Adapters Data Adapters Data Adapters Network Security Protocol (SSL 3.0 and TLS 1.0 ) Global Database Top Management Reports Value Chain Optimization Global Data Integrity Global Coordination Disaster Recovery Global Database BPM Admin HR Operation Finance

Agenda Business environment Challenges along the Value Chain Challenges at the Corporate Level Harnessing Innovative Technology for BP Concluding Thoughts

Business environment

Challenges along the Value Chain

Challenges at the Corporate Level

Harnessing Innovative Technology for BP

Concluding Thoughts

E-Collaboration – Ingraining Web 2.0 Ideas BP - 5 different brands operating as individual firms More than 115,000 employees – Everyone has ideas Deploying Employee driven Intra-company Idea Aggregator WebTool . Internal Market VOTE Most Popular Most Recent Most Relevant … a new technology … an efficiency improvement … a new business area … an alternative energy focus PROPOSE Pattern Recognition Technologies Harness Ideas

BP - 5 different brands operating as individual firms

More than 115,000 employees – Everyone has ideas

Deploying Employee driven Intra-company Idea Aggregator WebTool .

Crowdsourcing Tapping onto the collective intelligence of the Net Procter & Gamble casting its R&D problems onto the net for netizens to solve Amazon’s Mechanical Turk program Push requirements onto the Net Provide the right incentives Each member of the crowd puts forth an insignificant contribution to the total outcome, but the grand total of these contributions amounts to a considerable difference. Innovative Ideas can be explored at low cost Easily Retractable Highly flexible workforce Heterogeneous ideas to solve problems Getting netizens to scout for potential alternative energy sites around their locality Getting netizens to identify rural energy requirements in emerging economies and how alternative energy know-how of BP can help

Procter & Gamble casting its R&D problems onto the net for netizens to solve

Amazon’s Mechanical Turk program

Innovative Ideas can be explored at low cost

Easily Retractable

Highly flexible workforce

Heterogeneous ideas to solve problems

Getting netizens to scout for potential alternative energy sites around their locality

Getting netizens to identify rural energy requirements in emerging economies and how alternative energy know-how of BP can help

Semantic Web and RDF/XML Data Next Generation Web Search Vision of Web that computers can read Whole questions can be addressed by computers Entire Datasets to be defined in Resource Description Framework and XML Can I place an electronic order for BP products so that I get it from the nearest BP retail shop located within 50 mile radius and that can be delivered within 72 hours to my store between 2pm and 5pm on weekdays ?

Next Generation Web Search

Vision of Web that computers can read

Whole questions can be addressed by computers

Entire Datasets to be defined in Resource Description Framework and XML

Agenda Business environment Challenges along the Value Chain Challenges at the Corporate Level Harnessing Innovative Technology for BP Concluding Thoughts

Business environment

Challenges along the Value Chain

Challenges at the Corporate Level

Harnessing Innovative Technology for BP

Concluding Thoughts

How technology stacks up for BP Differentiating Technologies UPSTREAM & FIRMWIDE Crowdsourcing Semantic Web Digital Oil Field Simulation / Modeling Table Stakes Technologies MIDSTREAM & DOWNSTREAM Data Management E-Procurement Global Integration Factory Commodity Technologies MIDSTREAM & FIRMWIDE Electronic Collaboration Electronic Commerce Foundation Technologies FIRMWIDE Basic Desktop Services Networks Servers Foundation Technologies Differentiating Technologies Table Stakes Technologies Commodity Technologies

UPSTREAM & FIRMWIDE

Crowdsourcing

Semantic Web

Digital Oil Field

Simulation / Modeling

MIDSTREAM & DOWNSTREAM

Data Management

E-Procurement

Global Integration Factory

MIDSTREAM & FIRMWIDE

Electronic Collaboration

Electronic Commerce

FIRMWIDE

Basic Desktop Services

Networks

Servers

Questions ?

Appendix

BP Today… One of the world’s largest integrated oil groups Competitors : ExxonMobil, Royal Dutch Shell, Chevron and Total Global Energy Group : Finding, producing and marketing natural energy resources 3 segments : 1 Resource Oriented and 2 Customer Oriented Resource Segment : Exploration & Production (E&P) Customer Segments : Refining & Marketing (R&M) Gas, Power & Renewables (GP&R) More than 100,000 employees in over 100 countries Main Brands : BP, Aral, Castro, ARCO and am/pm

One of the world’s largest integrated oil groups

Competitors : ExxonMobil, Royal Dutch Shell, Chevron and Total

Global Energy Group : Finding, producing and marketing natural energy resources

3 segments : 1 Resource Oriented and 2 Customer Oriented

Resource Segment :

Exploration & Production (E&P)

Customer Segments :

Refining & Marketing (R&M)

Gas, Power & Renewables (GP&R)

More than 100,000 employees in over 100 countries

Main Brands : BP, Aral, Castro, ARCO and am/pm

Technology Assisted Sectors in an Energy Firm Operator ERP Production Strategic Decisions

The IT Infrastructure IT infrastructure must provide End-to-end security Interaction with data in the right time Integration with other data and systems Solutions for presentation and evaluation Capability for collaboration IT infrastructure implementation must be reliable and repeatable

IT infrastructure must provide

End-to-end security

Interaction with data in the right time

Integration with other data and systems

Solutions for presentation and evaluation

Capability for collaboration

IT infrastructure implementation must be reliable and repeatable