Maximising value from the NCS
through teamwork and technology
Pareto 1 September 2004 Sveinung Sletten
Value analysis
SDFI portfolio, 2003
Values established by Wood MacKenzie for the Ministry of Petroleum and Energy as part of the external value analysis of SDFI for 2003.
-450 26 66 14 -100 200 300 400 500 Verdi SDØE 1.1.03 Kontantstrøm til Staten Verdiskaping fra SDØE (faste priser) Verdiskaping fra SDØE (løpende priser) N P V 7%, mr d kr SDFI value 01.03.04 Government cash flow 2003 Value creation from SDFI (fixed prices) Value creation from SDFI (updated prices)
Number
Number ofof employeesemployees
60
60 recruitedrecruited from from
34
34 companiescompanies
Average
Average age age 43 years43 years
Average
Average experienceexperience 18 18 yearsyears
Composition
Composition ofof staffstaff
women
women menmen
Total
Total 25%25% 75%75%
Mngmt.team
Mngmt.team 22%22% 78%78%
Board
1 Rørledninger og landanlegg
Petoro’s position offshore Norway
•
•90 production licenses90 production licenses
•
•18 partnerships/companies 18 partnerships/companies related to transport &
related to transport &
terminals
terminals •
•34 fields in production34 fields in production
•
•3 3 fieldsfields under under developmentdevelopment
•The NorwegianContinental
Shelf
•Large portfolio
•Strong position in gas •Long term perspective •Partner •60 employees 12 6 19 24 25 6 6 2° 6 0° 5 8° T ro n d h eim K r istian su n d Ber g en Oslo Stav an g er Harstad 5 5 1 2 3 4 11 10 9 8 7 15 16 17 18 26 27 32 31 29 34 33 35 6202 6203 6204 6205 36 7 0 ° 1 4 ° 1 2° 1 0 ° 8 ° 2 0 ° 2 2° 2 4° 2 6 ° 2 8° 3 0° 1 8 ° 1 6 ° 3 2 ° 7 2 ° 7 4° 7120 7122 6 7° 6 5° 6° 4° 2° Tampen Tampen Oseberg Oseberg Troll Troll Norwegian Sea Norwegian Sea Barents Sea Barents Sea Southernmost NCS Southernmost NCS
1 Rørledninger og landanlegg
Petoro’s position offshore Norway
•
•90 production licenses90 production licenses
•
•18 partnerships/companies 18 partnerships/companies related to transport &
related to transport &
terminals
terminals •
•34 fields in production34 fields in production
•
•3 3 fieldsfields under under developmentdevelopment
•The NorwegianContinental
Shelf
•Large portfolio
•Strong position in gas •Long term perspective •Partner •60 employees 27 % 16 % 12 % 41 % 22 % 12 % Oil reserves Gas reserves Petoro Statoil Hydro Petoro Hydro Statoil
Strategic platform
Roles
Petoro
Petoro –– the best partnerthe best partner
Vision
Principal tasks
•
• Safeguarding humanSafeguarding human life and the
life and the environment environment
•
• Boldness andBoldness and innovation innovation
•
• Business orientationBusiness orientation
•
• IntegrityIntegrity
•
• CooperationCooperation
Values
Maximise the economic value of the State
Maximise the economic value of the State’s oil and gas portfolio’s oil and gas portfolio
Main objective
•
• LicenseLicense
management in management in the joint ventures the joint ventures
• • MonitoringMonitoring marketing/sales marketing/sales • • FinancialFinancial management management License management License management Proactive partner Proactive partner
Value creation through focus
Follow up in joint ventures
Business manager Selective
Active
Criteria
Value and strategic importance Petoro’s power of influence
Time criticality
Monitoring of marketing/sales Financial management
•Coordination in core areas •Early application of
technology
•Value creation in the
gas chain
•Long term access
to reserves Strategy provides focus
Strategy provides focus
Petoro operations
Proactive partner
Proactive partner
Create additional value Licence management role
Licence management role
Secure expected value and create additional value
0 % 20 % 40 % 60 % 80 % 100 %
Troll IGasledÅsgar d Troll II Heid run Exp lorat ion Snor re Oseb erg Orm en La nge Gullfa ks Norn e Drauge n Kvite bjør n Gran e Osebe rg S ør Ekof isk Vigd is Krist in OTS Snøh vit Visu nd Tord is in kl. B orgTune Vest prose ss Stat fjord Nord Stat fjord Øst Halten pipe Oseb erg Øs t Huld ra Etan or DAGj øa 30_9 _19 Sygn a Vesle frikk Heid run G TS Bygg ve, Sk irne Troll Olje rør 1 &2 Mon gstad term inal Gran e O ljerø r VargNjord Gullt opp Heim dal Øs t Brag e Svale Star Nor pipe Oil Jotu n Heim dal Orm en La nge transp ort 25_1 1_16Frø y Kolls nesS UM NPV – the SDFI portfolio
¾ Kilde: Petoro
Follow up in joint ventures
Business manager Selective
Value creation through focus
Follow up in joint ventures
Business manager Selective
Active
Criteria
Value and strategic importance Petoro’s power of influence
Time criticality
Monitoring of marketing/sales Financial management
•Coordination in core areas •Early application of
technology
•Value creation in the
gas chain
•Long term access
to reserves Strategy provides focus
Strategy provides focus
Petoro operations
Proactive partner
Proactive partner
Create additional value Licence management role
Licence management role
Secure expected value and create additional value
Key messages
• There is a huge value creation potential on the Norwegian
continental shelf (NCS)
• Technology will continue to boost the bottom line
• People and new work processes are essential
Conditions for value creation in place
Modern infrastructure High competence Sold & delivered Remaining and contingent Undiscovered 29% 26% 45%Modern infrastructure
Offshore 4D seismic Smart wells Onshore Operation centersVirtual data models
Real-time optimizers High-capacity digital networks
Soil
Soil
Grane
Significant value creation opportunities
Modern infrastructure High competence Sold & delivered Remaining and contingent Undiscovered 29% 26% 45%High competence, Cooperation and Courage
Exploration
Exploration & & reservoirreservoir management
management DrillingDrilling
Field
Key messages
• There is a huge value creation potential on the Norwegian
continental shelf (NCS)
• Technology will continue to boost the bottom line
• People and new work processes are essential
Technology has added significant value
30 40 50 60 70 1990 2000 2010 O il r e cover y r a te ( % ) Lifting cost Source: Statoil, 2003 10 30 50 70 90 1980 1990 2000 2010 Li ft ing cost s ( 2 002 N O K per bbl oe) Source: NPD, 2003… and will continue to boost bottom line
30 40 50 60 70 1990 2000 2010 O il r e cover y r a te ( % ) 10 30 50 70 90 1980 1990 2000 2010 Li ft in g cost s ( N O K per bbl oe) Lifting cost Oil recovery rate30 40 50 60 70 1990 2000 2010 O il r e cover y r a te ( % ) 10 30 50 70 90 1980 1990 2000 2010 Li ft in g cost s ( N O K per bbl oe)
30 40 50 60 70 1990 2000 2010 O il r e cover y r a te ( % ) 10 30 50 70 90 1980 1990 2000 2010 Li ft in g cost s ( N O K per bbl oe) Lifting cost Oil recovery rate
… and will continue to boost bottom line
”
”
Field
Field
of
of
the
the
Future
Future
”
”
on
on
the
the
NCS
NCS
Petoro, spring 2003 Petoro, spring 2003150
150
bill
bill
.
.
NOK
NOK
Petoro will push “Field of the Future”
105 bill. NOK
45 bill. NOK
• Work for early implementation
of ”Field of the Future” technologies
• Put subject on licensees’
agendas (licensee pull)
Key messages
• There is a huge value creation potential on the Norwegian
continental shelf (NCS)
• Technology will continue to boost the bottom line
• People and new work processes are essential
Centers of excellence:
It’s not about the
Key messages
• There is a huge value creation potential on the Norwegian
continental shelf (NCS)
• Technology will continue to boost the bottom line
• People and new work processes are essential
The implementation process has to be accelerated
• Operation cost will increase
significantly over the next 5-10 years
• Implementation processes
historically have been slow and time consuming
• Benchmark best practices Prototyping
0 10 20 30
Piloting Adoption Commercialization
Take-up process
Source: McKinsey
Unit operation cost
NOK per bbl o e 0 30 60 90 120 150 2000 2010 2020 2030
