DONG E&P Future plans and the role of the supplier

DONG E&P – Future plans

and the role of the supplier

OGIB Presentation

DONG E&P – Future plans and the role of the suppliers

Main topics



Safety moment – Contractor and supplier engagement

DONG Energy and E&P in brief



DONG E&P portfolio overview



The Hejre project – A new era in the North Sea

Procurement and how to get access to DONG E&P

Safety moment

Contractor relationships

• Pre-contract discussions and alignment of expectations on how to execute the contract prior to contract signing

• Work with relations as an integrated part of contract execution

• Management meetings with contractors to discuss QHSE expectations and performance

• Continuous improvement of performance by working with long-term suppliers

Contract requirements

• Simplify contracts to ensure more clarity around QHSE requirements & expectations

Contract execution

• Improve understanding of contracts during its execution

• Re-visit long-term contracts more regularly & evaluate the success with which they are being executed

DONG Energy In Brief…

DONG Energy is one of the leading energy groups in N. Europe

4

Our business is based on procuring, producing, distributing and trading in energy and related products in Northern Europe.

DONG Energy has 6,500 employees and is headquartered in Denmark.

Exploration & Production Wind Power

Thermal Power Customers & Markets

DONG E&P explores for and produces oil and gas in Denmark, Norway, the Faroe Islands, Greenland and in the United Kingdom in the West of Shetlands Area DONG E&P is among the 10 largest resource holders in the region West of Shetlands North Sea  Exploration position

 Co-operation with several experienced majors

 Active explorer across the region, including the Barents Sea

 Second largest player in Danish North Sea

 The most active operator in the last decade - 13 exploration wells making 9 discoveries

 Largest licence holder in the region

Barents Sea

Oil and gas production (2013)

31.7

77

12.3

7.3

~ 49% share of DONG Energy EBITDA

x

2

DONG E&P – Operated and non-operated opportunities

DONG E&P's project pipeline and first oil dates

Marulk (NO) Laggan-Tormore (UK) South Arne phase 3 (DK) 2011 2014 2016 2018 Edradour (UK) Rosebank (UK) Cambo (UK) Solsort (DK) Hejre (DK) Oselvar (NO) Trym (NO) Completed Decided Expected

DONG E&P Operated

Glenlivet (UK) 2013 2012 2015 2017 2019 Siri Caisson (DK) 2020 Mjølner (NO)

A 5609 5608 5607 B 5606 D 5509 5508 C 0002 5507 5605 5505 5506 B 0003 A 5604 5504 E 039 5708 0010 0008 0009 5707 5709 0004 0011 5610 5603 5510 038 5503 031 5706 5710 030 0005 0012 0001 F 0007

Projection: Mercator (world) [not to scale]

Fields

Gas

Gas Condensate Gas & Oil Oil Oil & Gas

DONG E&P licences

Operator DONG E&P Hess Mærsk 4° 6° 56° Nini Øst Nini Vest _Nini

Sofie Stine Segment-2 Stine Segment-1 Siri Siri Nord Connie Francisca Cecilie Rau Lulita Harald Amalie Svane Hejre Svend Syd Arne Gert Ravn Elly Valdemar Adda Roar Rolf Dagmar Gorm Halfdan Lola Tyra Tyra Sydøst Halfdan/NE Skjold Dan Alma Kraka Regnar 4/95 6/95 16/98 1/90 7/86 9/95 4/98 1/06 5/98 7/89 2/06 Norwegian Shelf Danish Shelf British Shelf Dutch Shelf German Shelf 8° 3/09 Solsort Nora Siri Nini Cecilie Syd Arne Nini East Lulita Stine Solsort Hejre

DONG E&P DK In Brief…

Esbjerg

DONG E&P DK, Hejre In Brief…

Hejre

A new era in

the North Sea

E&P Procurement

From transactional

to strategic

How to get access to DONG E&P?

Preferred procurement strategy

Green field development projects

• Functional specifications through international EPC(I) contractors Brown field development projects

• Depending on complexity through local EPC(I) contracts Rigs & Marine

• Typical through brokers or short listed key suppliers Exploration

• Frame agreements will be established with key players in the market for seismic data acquisition and processing

Well construction

• Partnership established with international service provider for the majority of work OPEX

• Specific service contracts or frame agreements depending on scope Engineering and consultants

• Frame agreements with key engineering consultancy companies

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How to engage with suppliers

STRATEGIC OBJECTIVE

• Improved QHSE and CSR performance through close and long term relationships

• Better pricing and overall lower cost of supplies through a more efficient cooperation and robust relation

• Ability to keep track of supplier performance enabling continuous improvements throughout the lifecycle of the contract

• Brings supplier technology and knowledge to the attention of DONG E&P Stand-alone contracts

Frame agreements or

How to take the customer and supplier relations to the next

level

+

+

• Strong supplier relations • Securing supply in boom

periods

• Access to suppliers resource capacity • Risk mitigation

• Suppliers’ best resources • Process optimisation • New technology • Market surveillance • Supplier retention Purchase price Transportation Inventory costs Running costs

Purchase / process costs

Waste

Logistics systems

Over-specification

Warranty Induced costs

• Future incremental cash flows

• Revenue growth

• Profitability improvements • Innovative new customer

segments

• Charge first-mover pricing • Customer & supplier

retention

• Service differentiation • Working capital changes • Opportunity spotting

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Thank you for your attention!

…any questions?