eDocs for Paperless Trade in Oil Industry

1. Paperless Trade in Oil Industry UNeDocs ConferenceKuala Lumpur, 21 Feb 2006

2. Agenda • Background to ESS and its approach • Overview of ESS • Timing right for eDocs • Commodity Trade Problem • ESS’ Solution • Why we chose UNeDocs • Oil eB/L Pilots • Hurdles in building pilots • eB/L Pilots Overview • BP Pilot details • Future work with UNeDOcs

3. ESS Overview • ESS is an eDocs services provider for the trade finance, commodity trading and shipping industries • Established in early 2003 by two shipping executives • Management Team has 105 years of IT and Shipping experience • Offices in Philadelphia (Sales), Dallas (Engineering) & London (Sales). Hong Kong (Sales) to open in late 2006 • Industry neutral company • Not owned or controlled by any interested party, stakeholder group or government entity • BP pilot started this month • Several other eDocs pilots planned for 2006 Company Product • Product developed in-house • Web application, integrated or OEM solution • Part I: eDocs Solution • IT Platform (.Net 2.0 & SQL Server) • User Agreement • eRisks Insurance • 24/7 Support & Training • Part II: Clearinghouse Solution • UNeDocs data model • Web Services • Other adapters for legacy and ERP systems

4. Timing right for eDocs Solution • Recent trends make the adoption of an industry standard for electronic documents the imminent solution to paper inefficiencies Clear trend towards electronic documents as the solution

5. The Commodity Trade Problem • Paper inefficiencies creates very expensive problems for all trade participants Cause Problem Solution • Secure eDocs including eB/Ls • Data Interoperability • Automated L/C reconciliation

6. ESS Solution: Databridge • The Databridge provides a full-service, on-demand eDocs Service by combining an IT platform with a robust User Agreement, eRisk insurance & 24/7 support • Databridge allows users to create and transmit any original trade and shipping documents electronically • Paper uniqueness replaced by strict access rights limited to legal Holder • Original eDoc: • XML Template • Trade Data • Digital signature(s) • Documents can be viewed as PDFs or using Databridge viewer - .NET 2.0 - SQL Server • - UNeDocs • - XML • Web Services

7. ESS & UNeDocs • Past failures and a desire not to “re-invent the wheel” led ESS to UNeDocs • Need to start with paper and existing processes • Need data interoperability • Need a standard: • Proprietary standards is problematical • Expensive to develop and maintain • Creates significant pushback from users • Developing your own standard is problematical • Takes significant time to create • Need broad-based support before you have demonstrated proof-of-concept ESS has adopted UNeDocs as its internal data model and default integration standard

8. Hurdles with Oil eB/Ls • ESS faced a number of hurdles in tackling oil B/Ls • Oil eB/Ls require working with two of the worlds most conservative industries at the same time: banking and shipping • A number of failures of prior eB/L projects made obtaining buy-in more difficult • eB/L pilots require participation from a full trade chain for any type of meaningful trial • Lack of any international treaty (standard) requires ESS to adopt a robust legal framework to deal with the transfer of title • Dealing with extremely high value cargoes – up to $120MM necessitates significant insurance cover • Need to resolve issues of obtaining Master’s signatures when the majority of vessels are not internet enabled • Need to solve issue of dual medium – paper and eDocs Buy-in from customers Legal Insurance Practical

9. eDocs Oil Pilots • ESS is in the process of running a series of pilots which should lead to commercial rollout in the oil & petrochemical segment • Running approximately 5-8 oil and petrochemical pilots in 2006 • First part of series is underway with BP, Shell, Hess and possibly Exxon - involves simple trade chains (involving 5-10 parties) • Second part will commence in 2H 2006 – involves complex trade chains (20+ parties) • Commence with pilots involving oil terminals, leading oil majors tanker operators, ship agents, cargo surveyors, commodity traders and banks • Initial pilots involve several stages: • Training & Proof-of-concept • Simulations • Dry runs (i.e. eDocs in parallel to paper) • Production pilot (i.e., no paper) • Later pilots involve integration using UNeDocs, XML or Web Services with users trading and scheduling systems • Pilots supported 24/7 by our Technical Support and Professional Services Departments

10. Pilot Example: BP-Supsa • Cargo: Azeri Light Crude • Route: From Supsa, Georgia to Trieste, Italy • Start Date: Commenced February 2006 • Timeframe: Approximately 6 months • Participants: • Georgia Pipeline Company (terminal operator) • BP Oil International (shipper) & BP Germany (receiver) • BP Shipping and possibly others (tanker operator) • Barwil Agency (ship agent) • Documents Involved: • Negotiable bill of lading • Certificate of Origin • Certificate of Quality & Quantity • Cargo Manifest • Master Receipt of Samples

11. Future Work with UNeDocs • ESS is committed to support UNeDocs in developing a trade facilitation standard • Important work from ESS’ standpoint includes: • Developing standards around specific shipping documents not presently included in UNeDocs, such as the eCQQ • Developing a standard for rendering eDocs (eForms) • Convergence of UNeDocs and both WCO standards and emerging single window standards • Ensuring that UNeDocs conforms with the UNCITRAL draft Instrument on transfer of rights of eDocs

12. ESS Contact For more information on ESS or the oil pilots contact: Name: Alexander Goulandris Tel: +44 20 7754 5984 Email: alexander.goulandris@essdocs.com

13. “Our Age of Anxiety is, in great part, • the result of trying to do today's jobs • with yesterday's tools....” • - Marshall McLuhan