Preparing for growt: How Odfjell Drilling is benefiting from running IFS Applications

2. Preparing the company for growth – from an IT perspective Odfjell Drilling Mr Tor Tjeldnes, CIO Odfjell Drilling ttje@odfjelldrilling.com

3. Contents • About Odfjell Drilling • Key issues for IT in Odfjell Drilling • Collaboration – Integrated Operations • Project Global Standard – implementing IFS and standardizing business processes – Background – Evaluation process – Implementation project – strategy and design principles – Process & Organization • Way forward 3 10/28/2013 #1233736

4. Odfjell Drilling With operations worldwide and over 40 years of international drilling experience, Odfjell Drilling is an established industry leader and trusted partner for many of the world’s most respected energy businesses. We are proud to be chosen for our experience and expertise.

5. This is Odfjell Drilling • An integrated drilling, well service and engineering company with strong international focus and growth • World-wide operations, engineering and new build project management • 40 years' experience • Turnover of approx. USD 1.1 billion (2012) • 5.7 billion USD contract backlog • Operations in more than 20 countries • 50 nationalities are represented among our 3,200 employees 10/28/2013 #1233736 Page 5

6. Business areas Our four specialist business areas provide segment-leading expertise - giving customers a unique blend of talented and experienced individuals, alongside advanced technology and operational excellence. MOBILE UNITS • Deepsea Atlantic • Deepsea Bergen • Deepsea Stavanger • Deepsea Aberdeen • Deepsea Metro1 • Deepsea Metro 2 • Island Innovator • Dalian Developer 10/28/2013 #1233736 Page 6 PLATFORM DRILLING WELL SERVICES • • • • • • • • Statoil Norway Wintershall Norway BP UK Talisman Energy UK Taqa UK Casing Services Rental Services Tubulars DRILLING TECHNOLOGY •Project Management •Drilling Upgrades & Modifications •Engineering •Marine Operations •BOP systems •Maintenance Technology •SPS and yard stay •EPCI •Technology Improvement •AoC process

7. International presence Norway UK Holland Romania Turkmenistan Saudi Arabia Brazil South Korea The Philippines Thailand United Arab Emirates Tanzania Angola USA 10/28/2013 #1233736 7

8. Vision & Mission Odfjell Drilling – chosen for experience and expertise Odfjell Drilling shall be a preferred international ultra deepwater and harsh environment drilling contractor. And provider of engineering and project management services for the offshore drilling industry and high quality and innovative well services

9. Demand for drilling services Continued high drilling activity on NCS Offshore well E&P spending – world wide USDbn 90 No. wells drilled 250 80 200 70 60 150 50 40 100 30 20 50 10 Exploration wells 10/28/2013 #1233736 Side 9 Source: The Norwegian Petroloeum Directorate, Rystad Energy (as of [ ] June 2013) Well Service Drilling Tools and Commodities 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2012 2010 2008 2006 2004 2002 2000 1998 1996 1994 1992 1990 1988 1986 1984 1982 1980 Development wells 2005 - 0

10. Key issues for IT

11. Some key issues for IT in Odfjell Drilling Cost effective business support through –Standardisation of business processes, systems and technology –Global sourcing (vendors with global capabilities) –Collaboration (Integrated Operations – collaboration tools, video, unified communication…) –Shared services centre in Manila (IT support and other shared services) 11 10/28/2013 #1233736

12. Integrated Operations

13. Onshore Operations Model - Decision based organisation onshore, execution based organisation offshore; •Secure continuity between shifts – ensure consistency in operations •Experience transfer between operations/installations •Administrative tasks to onshore to release time for increased and continuous focus on HSE and operations for offshore management •Integrated planning activities onshore (operations and technical maintenance) •Improve resource utilization by cross training •Increased focus on bottlenecks & continuous improvements Benefit: Optimized number of personnel on board - without compromising safety or efficiency 13 10/28/2013 #1233736

14. Integrated Operations – IT support • Technological platform achieve effective collaboration • Collaboration rooms & Operation centers – Video conference Realtime data – FieldView / CCTV / UHF – Realtime data Video conference – Smartboards • MS Lync fully integrated – Chat (quick and informal communication) CCTV Collaboration rooms – Presence Portable videocameras – Share Data – Point-to-point video – Lync-Lync + Lync-Jabber Cisco Jabber Web cameras • Cisco Jabber Portable cameras – High end video PC client – Jabber-Jabber, Jabber–Cisco endpoints + Jabber-Lync UHF MS Lync #1233736 14 PC basert videokonferanse

15. Project Global Standard Standard processes IFS implementation

16. ERP evaluation • Why? – Alternative to further development of in-house-developed system for purchasing, logistics and maintenance • Scope – Initially limited to purchasing, logistics and maintenance – Evaluation extended to covering Finance and HR after IFS was chosen for purchasing, logistics and maintenance • Business case – Process improvement and standardization – Improved business predictability and control Why IFS? – Industry standard solution • Best Practices • Integrated system - ERP – Support business growth and internationalization 16 10/28/2013 #1233736

17. IFS ASSESSMENT (2012) August CW33 October September CW34 CW35 CW36 1. Maintenance CW37 CW38 CW39 CW40 3.Logistics 2.operations CW41 CW42 CW43 CW44 5.FI/CO + C&T 4.HR 1. Maintenance scenarios 2.Operations scenarios 3.Logistics scenarios 4.HR scenarios 5.FI/CO scenarios 5.Cross functional &Technology • •Project •Rotation •Incidents/Audits(HSE) •Procurement •Inventory Management •Shipment •Human Resource planning •Employee administration •Time and Attendance Reporting •Pay roll processing •Supplier Invoicing •Fixed assets •Cost controlling •Project cost controlling •Contract Management •Document Management •Replication •Interfaces •BI (business intelligence) • • Equipment Administration PM planning Work order execution 10/28/2013 #1233736 17

18. Project Strategy OBJECTIVES INITIATIVES PEOPLE • New way of working is implemented and accepted in the organization • • • PROCESS • Integrated, standard and efficient processes implemented and fit for global roll-out • • • SYSTEMS • Systems stabile and user friendly, master data's are standardized and governance model implemented • • 18 10/28/2013 #1233736 Involve key personnel from all BU’s in the design phase to ensure high quality, fit-for-purpose solutions Provide good and timely information Monitor and follow up change process Train and support new users Involve key personnel from all BU’s in the design phase to ensure high quality, fit-for-purpose solutions Business Process governance structure to be established in design phase All changes outside process and solution standard to be approved by BPO All processes to be verified globally and cross business process area Involve key personnel from all BU’s in the preparations and execution of testing Early decision on master data structure and governance model Clean up master data prior to implementation of new system

19. The fundamental design principles for establishing the Global Standard in Odfjell Drilling are: Standardization across locations and operations Global solution and processes • Applicable for all locations and operations • Well functioning offshore as well as onshore • The system shall be intuitive and easy to use • Universal definition of roles and “lingo” • Process roles independent of organizational role • Standard process and solution within process areas • System set-up and user interface is process oriented • System controlled process steps • Standardized system setup and user interface • Common master data structure • All exceptions from standard shall be approved by BPO 19 10/28/2013 #1233736 Safe and efficient solutions • Information entered once and as close to the source as possible (avoid duplication and reduced quality of information) • Avoid manual work steps • Move from handling of transaction to planning and control • Total efficiency for Odfjell Drilling superior to efficiency for back-office functions (hopefully not in conflict) • In compliance with regulatory bodies within our business • In compliance with requirements related to segregation of duties

20. Process & Organization

21. High level project plan INITIATE MAPPING SYSTEM SET-UP & PREPARATION IMPLEMENT STABILIZE Roll-out Strategy Initiate High Level mapping Detailed mapping Organization Transition preparations Stabilize processes Training Establish solution (system set-up & configuration) IT SYSTEM Migration Strategy Masterdata definition Go live Procedures & Guidelines ORGANIZATION & PROCESS Testing & Migration Masterdata set-up & clean-up Support & Maintenance of existing solutions t Q1/13 Q3/13 Q1/14 GLOBAL STANDARD 10/28/2013 #1240221 21 Q3/14 Q4/14

22. Goal Main goal: Establish a global standard in Odfjell Drilling on how we do • • • • • • Maintenance and asset management Procurement Logistics Rental Projects Finance This includes: - Process description of future work processes - Establish link between IFS process descriptions and Odfjell Drilling process hierarchy - Universal role definitions - Changes in organization governance model + suggested changes future organization of support functions - Establish and/or update procedures and guidelines to support the new standard - Establish governance organization - Train and prepare our organization - Benefit realization 10/28/2013 #1240221 Page 22

23. From functional orientation to process orientation… HR Finance Project Maint. Proc. Logist. Procurement - Procure to Pay HR - Hire to Retire Maintenance - “Acquire to scrap” Rental – Order to invoicing Logistics - Order to consumption Project Control – Prospect to closure/payment Finance – Budget to Reporting Income flow – Sales order to payment 10/28/2013 #1240221 Page 23 Master Data Life Cycle Rental

24. T1: Odfjell Drilling SCM SCM GLOBAL STANDARD 10/28/2013 #1172717 24

25. GOVERNING PROCESSES SCM PROCESS & SYSTEM GOVERNANCE PROCEDURES & GUIDELINES FA & CONTRACT MANAGEMENT SUPPLIER MANAGEMENT GLOBAL SCM STRATEGY & PHILOSOFY PERFORMANCE & RISK MANAGEMENT SCM LOGISTICS PROCUREMENT CORE PROCESSES SCM LONG TERM PROCUREMENT PLAN LONG TERM LOGISTICS PLANNING DEFINE PROCUREMENT NEEDS (DAY-TODAY) TRANSPORTATION FOLLOW-UP PROCUREMENT REQUEST & SELECT VENDOR CUSTOMS CL GOODS RECEIVED TRANSIT WAREHOUSING SUPPORT PROCESSES SCM MASTER DATA ADMINISTRATION MATERIAL ADMINISTRATION SYSTEM SET-UP AND MAINTENANCE 10/28/2013 #1172717 25 VERIFY INVOICE WAREHOUSING GOODS & SERVICE TRANSACTIONS

26. GOVERNING PROCESSES SCM PROCESS & SYSTEM GOVERNANCE Process start-point: • Need for changes in process and/or system • Need for establishment of process/system Main Activities: • Evaluate need for change • Conclude on global solution • Conclude on local adjustments • Update Stream Process Output: • Governing principles for process and/or system development • Conclusions on system/process changes • Regulations of process execution core and support processes SCM • Updated Stream process description PROCEDURES & GUIDELINES Process start-point: • Need for changes in procedures or guidelines • Need for establishment of procedures or guidelines Main Activities: • Evaluate need for change • Establish procedures or guidelines • Update CMS Process Output: • Governing principles for execution of SCM globally • Updated procedures in CMS SUPPLIER & CATEGORY MANAGEMENT GLOBAL SCM STRATEGY & PHILOSOFY PERFORMANCE & RISK MANAGEMENT SCM Process start-point: • Need for new contract or frame agreement Process start-point: • Procurement needs and existing/new suppliers Process start-point: • Need for reviewed SCM strategy Main Activities: • Long term planning of contract and FA establishment • Plan and prepare • Market screening • Negotiations • Benefit realization • Contract follow-up Main Activities: • Categorization of vendors • Market analyzis • Identification and selection of vendor/category strategy • Identify strategic vendors and build relations • Administrate and follow up procurement categories Main Activities: • SWOT analysis • Spend analysis • Supplier and market analysis Process start-point: • SCM Strategy • Corporate Strategy and goals • Process and transaction information FA & CONTRACT MANAGEMENT Process Output: • New contracts and FA’s • Potential savings of new contracts Process Output: • Enhanced procurement power • Clarified strategies per category • etc 10/28/2013 #1172717 26 Process Output: • New SCM strategy Main Activities: • Assessment of risks and opportunities • Establish KPIs • Measure and monitor KPIs • Perform analysis of spendt, process performance, etc Process Output: • Risk awareness and mitigating actions • Performance indicators • Input to action plans and

27. CORE PROCESSES SCM - PROCUREMENT LONG TERM PROCUREMENT PLAN Process start-point: • New business events (project, operation, contract) with procurement requirements • Long term asset plan • Long term operation plan • Recurring event Main Activities: • Identify procurement and investment needs • Plan procurement and investment • Select sourcing and procurement strategy • Initiate procurement activities long lead items according to strategy Process Output: • Updated long term procurement plan • Procurement initiatives ready for start-up DEFINE PROCUREMENT NEEDS (DAY-TODAY) FOLLOW-UP PROCUREMENT REQUEST & SELECT VENDOR Process start-point: Process start-point: • Long term procurement • Clarified procurement scope and plan requirements • Day-to-day procurement needs Main Activities: • Dependent on Main Activities: procurement type • Define and clarify (single source, FA procurement scope regulated, tailor made, • Identify procurement other) type • Establish requesition • Identify and select • Request proposal from procurement strategy 3+ vendors • • Prepare and perform negotiations • Evaluate and select Process Output: vendor • Procurement scope • Establish and send PO (spesification of goods/services, requirements, category, sourcing Process Output: strategy, etc) • PO to vendor • Updated procurement system 10/28/2013 #1172717 27 Process start-point: • PO to vendor Main Activities: • Monitor progress of delivery from vendor • Monitor quality of deliverables from vendor • Monitor shipment status • Evaluate need for VO • Establish and send VO to vendor • Update status on PO Process Output: • Updated PO status • VO VERIFY INVOICE Process start-point: • Goods received Main Activities: • Verification of invoice according to PO, VO and goods received Process Output: • Approved invoice ready for payment • PO/VO closed

28. CORE PROCESSES SCM - LOGISTICS LONG TERM LOGISTICS PLANNING Process start-point: • New business events (project, operation, contract) with need for logistics set-ups • Long term asset plan • Long term operation plan (contract status) • Recurring event Main Activities: • Identify logistics needs • Plan changes and events in logistics structure and organization Process Output: • Updated long term logistics plan • Logistics initiatives ready for start-up TRANSPORTATION & CUSTOMS CL GOODS RECEIVED Process start-point: • Need for transportation of goods Process start-point: • Goods arrived at agreed delivery point (where Main Activities: • Define and clarify transportation scope • Identify transportation type • Identify need for customs clearance • Book and perform transportation • Perform customs clearance • Follow up transportation and report progress TRANSIT WAREHOUSING Process start-point: • Goods received registered Main Activities: • Check goods received according to PO • Inspection of delivered goods • Register goods received in IFS Process Output: • Goods received and registered Process Output: • Transportation scope defined • Goods delivered to agreed point of delivery Process Output: • Goods in location • Goods ready for delivery to warehouse 10/28/2013 #1172717 Main Activities: • Update warehouse location • Perform customs clearance • Store goods in warehouse • Pick goods from warehouse according to • Update system • Clarify goods for transportation to warehouse 28 WAREHOUSING Process start-point: • Goods received registere Main Activities: • Update warehouse location • Perform customs clearance • Store goods in warehouse • Update system Process Output: • Goods in location • Warehouse information updated in IFS GOODS & SERVICE TRANSACTIONS Process start-point: • Need for usage of goods or services • Return of goods to warehouse Main Activities: • Print pick-list • Pick up goods from location • Update system with transactions • Scrapping • Return to vendor • Return to basestore Process Output: • Goods consumed • Updated status inventory

29. CORE PROCESSES SCM - LOGISTICS MASTER DATA ADMINISTRATION Process start-point: • New items • Updated datas • Changes in item description • etc Main Activities: • Register new items • Verification of consistency in master datas • Analyse quality and validity in data Process Output: • Updated master data • QA of master data SYSTEM SET-UP AND MAINTENANCE MATERIAL ADMINISTRATION Process start-point: • New items • Updated datas • Changes in item description • etc Process start-point: • New users • New functionality • Agreed changes (governance) Main Activities: • Evaluate urgency • Evaluate need for external assistance • Evaluate need for traning of new users • Evaluate need for establishing a project • Assign tasks • Perform tasks • Inform users about changes • Update user manuals Main Activities: • Register new items • Verification of consistency in master datas • Analyse quality and validity in data Process Output: • Updated master data • QA of master data Process Output: • Updated system 10/28/2013 #1172717 29

30. Methodology alignment

31. Bridging methodology IFS: Business Solution TIER1 – Business Units IFS: Key Solution TIER2 – Value Chain IFS: Main Process TIER3 – Process Landscape IFS: Application Solution TIER4 – BPMN/Process = GLOBAL STANDARD 10/28/2013 #1172717 31

32. Critical path – alignment between IFS and Odfjell Drilling Develop customizations, integrations Establish platform and application Establish basic data Configure application Train in application solution Verify solution Establish work instr. Organize, plan and prepare training Define support process and organization Define and plan cut-over Perform test migration Define and plan change management 10/28/2013 #1240221 Page 32 Perform AST

33. Critical path – alignment between IFS and Odfjell Drilling Develop customizations, integrations Establish platform and application Establish basic data Configure application Design future processes Define roles Conclude on changes (process/org) Train in application solution Define rollout strategy Def. targets Est. baseline Verify solution Establish work instr. Perform AST Organize, plan and prepare training Define support process and organization Define and plan cut-over Perform test migration Define and plan change management Master data structure definition 10/28/2013 #1240221 Page 33 Master data cleaning Master data structure definition

34. Way forward

35. The way forward • Further business process improvements and standardization, • cooperation with IFS and other companies, e.g. Rotation Planning • Industry Best Practices • Mobile solutions hand-held devices, usability improvements for travellers • • • Tuning of IT service processes (ITIL based) • And always: Continous cost awareness! Focus on business and IT architecture Further development of our shared services centre in Manila 35 10/28/2013 #1233736

36. Thank you for your attention

Preparing for growt: How Odfjell Drilling is benefiting from running IFS Applications

Preparing for growt: How Odfjell Drilling is benefiting from running IFS Applications

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