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An approach to getting Trading input to SCITe project

An approach to getting Trading input to SCITe project. Why is it important? PARIS has defined 3 major categories of customer (see page 2) Without Trading, PARIS will end up focused primarily on “system supply” Large benefits for SCITe is better management of discretionary volumes

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An approach to getting Trading input to SCITe project

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  1. An approach to getting Trading input to SCITe project • Why is it important? • PARIS has defined 3 major categories of customer (see page 2) • Without Trading, PARIS will end up focused primarily on “system supply” • Large benefits for SCITe is better management of discretionary volumes • Trading very important to Bukom & Pernis envelopes • OTO has the best understanding of processes into/out of PARIS • What are the key Issues? • Legitimate Trading (GTN) concerns about IPR with both PwC & i2 • IPR probably relates to GTN deal making approach, strategy & partners • Thoughts on resolution of the issues? • Understand the similar project conducted by PwC with Equiva (Pages 3,4,5) • Similar concerns about PwC-Equiva IPR were resolved • Body of process knowledge available to SCITe Teams from Equiva work • Similar approach to that used with other Shell sales organizations

  2. PARIS Team has defined 3 major categories of customers affecting the Shell supply chain SCITe Scope - The Shell Customer Triangle GTN 3rd party customer/supplier e.g. Trading houses, other oil companies, Marine shipping companies • Within planning cycle update • Who sells it? • What price? 3rd party customer MSD e.g. Retail, Commercial, Aviation, Marine, Chemicals (LO & Aroms), Base oils, LPG, Bitumen Shell Sales Organisations 3rd party customer/supplier e.g. Domestic, Export, Supply Sales, Exchanges

  3. Project Background • Conducted from September 1998 thru March, 1999 • PwC provides assistance • Used cross-functional, front line teams • Detailed “As-IS” and “To-Be” process definitions available Project Objective: “World Class Deal Flow project is using I/T and work processes to drive cost and understand & manage every aspect of our business…Take every aspect of a deal: (1) follow it through the books & records, (2) understand what parts are adding value, what parts are cost and (3) what parts are losing value."

  4. Critical Success Factors • Know accurate physical and paper position (barrels and associated prices) by product, location and trading partner at every stage of the process. • Know economic and regulatory impact of all decisions. • Timely communication of accurate information from a common data source • Competent staff working across departments to execute/develop processes and strategies • Be close to the market: Increase understanding of external requirements and targeted market segments.

  5. Plan the Deal Make the Deal Execute the Deal Measure the Deal Settle the Deal Every day is a new deal 9.0 Ending Daily Position 4.0 Physical Trades 6.0 8.0 1.0 Position - Review Yesterday - New Deals Review Risk Post Execution Crude & product Movements Program Trade for Profit TPT 10.0 Accounting Activities Transportation 2.0 Analytics - physical trades Transactional tie to SCITe Project Buy/Sell Exchange Trades Exchanges Fit of OTO Activities Physical 5.0 Paper Trades 3.0 Analytics - paper trades Exposure Measurement on Paper Trades Program TPT 7.0 Paper Execution 11.0 Post Deal Analytics Risk Risk 12.0 Dynamic Operational Risk Measures Continuous improvement loop Highly Individual “Custom” Processes More Structured “Common” Processes

  6. An approach to getting Trading input to SCITe project 1. Ruth & Steven to review this deck, concepts, approach, etc. 2. Priority is to define Trading “handshakes” in/out of PARIS 3. Can use a similar template to the one used for Sales Organizations 4. Per Steven, key interface point with PARIS may be with OTO 5. PARIS has no need for details on Trading strategies - at this point 6. Sit down with Peter Hellman &/or James Murdock (?) 7. Meet with PARIS team - w/o PwC if IPR still an issue Need a way forward by June 10th or so...

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