“ e-Business in an international oil company ”

1. “e-Business in an international oil company” 22.04.2002 WTO Seminar on “e-Business” Geneva Morten Sven Johannessen, Statoil mosvejo@statoil.com

2. Statoil – some facts • Established in 1972 • Headquarters in Stavanger, Norway • Partially privatized in 2001 through IPO process • 16,700 employees in 23 countries • Production/Reserves: 1 mmboepd/4.3 bn boe • Marketing 2/3 of Norwegian gas volumes • World’s 3rd largest crude oil seller Integrated oil and gas company with strong E&P focus www.statoil.com

3. Why does Statoil need e-Business? • Globalisation of industry. • Reduce cost of extracting, refining and marketing oil and gas. • Maximize usage of scarce and disbursed resources. • Take advantage of technical advances in IT and telecommunications. • Reduce risk and mitigate best practice in operations and Health Safety and Environment (HSE). • Offer training and consistency in information distribution throughout the • company, regardless of geography and time-zones.

4. e-Business in Statoil • e-business • e-commerce • b2c (business to consumer) • b2b (business to business) • b2e (business to enterprise, business to employee) • e-collaboration • e-learning

5. Statoil's e-business Roadmap Foundation Create Harvest Build and operate ..1999 2000 2001 2002 .. • Implement new work-processes • Fully integrated SAP solution • Organization change • Organization readiness • Reap benefits with: • Supply chain • Collaboration • Remote operation • Borderless information management and effective knowledge sharing • Identify opportunities • Organise and prioritise • Develop skills and awareness • Launch pilots • Take ongoing and new e-business initiatives "live" • Measure, improve, expand • Integrate e-business into corporate and FO/RO strategy processes

6. E-business activity matrix Statoil Clearing E-engineering E-”fields” LicenseWeb E-learning High Market information Portal framework “Phoenix” E-learning E- Collaboration tools Statoil Card BOB extranett E-logistics Troll Swing/ Lifting accounts Mat.master/ Tech.info “Beringen” Real Time systems Distribution Licence web NetShop Norway/Sweden Value Creation Potential Upstream Market E-”fields”pilots Trading paper deals Tampen improvement Recruiting Emden Hub E-travel NetShop Denmark Tradenet Electronic doc. NetShop Ireland Eureka outside Norway Eureka Norway Dispatch Web Request Netshop Lubricants Low Difficult Easy = Initiative fully operational, active users exist Ease of implementation = Initiative decision has been made. In development phase. = Planned initiative. Final go-decision not made

7. Where are the benefits? • Reduction of internal transaction costs • Reduction of external transaction costs • ..result, reduced costs • Improved and simplified flow of information and data • High speed access to information • Standard infrastructure and standard collaboration tools • ..result, better, quicker safer and more cost efficient information • Harvest further benefits from existing systems • ..result, "operational excellence" = competitive edge

8. What are the expected effects? • Reduced cost of exploration, production, refining and marketing • Reduced time to oil, better recovery rate • Improved HSE, reduce accidents and unwanted situations • =better competitiveness • How will this affect our business? • Increased cooperation on establishing standards and processes • Visibility of suppliers and accessibility of suppliers on Marketplace infrastructure • Ease of operation, faster time to market • Ease of starting up in new locations, better utilization of existing infrastructure

9. Effects of taxation on business transactions crossing borders • Effects on procurement of tangible goods across borders • No intended effects, • but may lead to consolidation of suppliers, • creates an opportunity for good local suppliers in new markets • Effects on procurement of in- tangible goods across borders • Internet as delivery platform, • Intellectual property will be distributed using the Internet, Intranet and • Extranet, difficult to track. Companies will optimise according to need, i.e. on • managing access through corporate wide Intranet • Internet as business driver for new products and services Tangible goods become digitised and transformed into services, i.e. valves machinery, pipelines. Physical goods will become value add services managed over the net

10. Effects of taxation on business transactions crossing borders • Effects on services • Geographically disburse • Best of breed services bought where services are offered, i.e. engineering • and IT from India, service centres (call centres) from Eire. Using the Internet • as transaction, delivery and communication tool • Bottom line, • we optimise as we have always done, but do not exploit the net to avoid taxes

12. The road to b2b e-commerce in Statoil New user interface and internal catalogue B2B Pilot Regional catalogue eOil Global e-commerce solution for the oil and gas industry Trade Ranger Horizontal marketplace in Scandinavia Horizontal marketplace 2000 2001 1999