e-commerce solutions: Products Supply Advisory Council

1. e-commerce solutions:Products SupplyAdvisory Council Tuesday, November 21 Conference Call 10:00 am - 12:00 noon CST 1-888-567-7596, passcode 38743 meeting action items, issues noted in red

2. Agenda 10:00 Welcome, Agenda Review, Roll-Call 10:10 Progress Reports … from Committees and Work Teams 10:15 Legal Counsel Committee: Bob, Doris 10:25 Membership Committee: Herb, Mary 10:35 Communication Team: John F, Marty 10:45 Prize Team: Herb, Shannon 11:00 Process Team: Hal, Eric 11:15 Governance Team: Dave K, Wilson 11:30 Technology Team: Ray, John R 11:40 Business Plan Team: Wilson 11:45 Meeting Wrap-Up, Next Meeting Prep 12:00 DONE!

3. BP Baker & Hostetler David Ivey Chevron Doug Gleason, Mary Kole Citgo Herb Whitney, Ron Likens Coastal Marty Power, Warren Giese, David Nalley Conoco Eric Schlueter ExxonMobil Dave Kirshner Equiva Bob Werner Hess John Fitzgerald Marathon Ashland Cliff Cook, Mike Gothard Premcor PwC Marty Stetzer, Shannon Johnson, Eric Rich, Amanda Diaz, John Ruddy, Wilson Haddow Sunoco Don Hinderhofer Tosco Ray Kurkjy UDS Tom Nichta, Doris Beaulieu Valero Hal Zesch Roll Call

4. Outside Legal Counsel Report… Bob Werner, Doris Beaulieu ... • Baker & Hostetler Update • Engagement Letter done! • B&H Hired! • Thank you Bob Werner! • Welcome David Ivey! 713-646-1338 • Legal Counsel Coordination • Book Club Legal Liaison: Tommy Stuchell, ExxonMobil Pipeline Company 713/656-8959 tommy.l.stuchell@exxon.com • All matters requiring legal attention thru Tommy ... • Thank you Tommy!

5. Membership Committee ReportHerb Whitney, Joe VanHorn, Maggi Keane • Update on Prospective Members • Koch: no ... • Morgan Stanley: has CA … considering • Tesoro … unlikely before cut-off date • Vitol … unlikely before cut-off date • Phase 1 Membership closes tomorrow • Re-opens after completion of Phase 1 • TransMontaigne has dropped out ...

6. Communications Team ReportJohn Fitzgerald, Marty Stetzer • Communications Team continues the consensus-membership efforts of Mary Kole during development of Book Club concept • The Communications Team consists of: • ST Champion: John Fitzgerald - Amerada Hess • Project Team Leads: Mary Kole & Marty Stetzer • Editor & Support: Amanda Diaz (PwC) • The communications effort is designed to: (1) maintain continuity with commitments made to Member Companies during the pre-project efforts, (2) accommodate a new set of ST, AC and project team participants and (3) prepare your company management for key decisions needed to progress this project to the next Phase

7. Industry Members Primary Role of AC in Communications PM Project Organization Gov. Consen-sus BusinessModel AC Advisory Council Member Company Management Cross functional teams using each member companies’ internal review process Member Finance Logistics Legal Opera-tions

8. Cascading & Interlocking Team ApproachUltimately, change is a very personal thing Advisory Council Endorse Plans Steering Team Initiate & Guide Project Team Plan Implementation Personal Commit to Success

9. Communications Team ReportActivities to Date - Week 4 • Guiding Principles: • No surprises - preview of coming attractions • Completed staff work • Decisions with structured agenda & voting • bbbc.intranets.com set up • Three Steering Team calls to date • Week 2: Client organization & prize approach • Week 3: Process scope definition • Week 4: Governance models • Project Sub-team Champions assigned • AC progress report format debated and concluded • We will continue all efforts possible to keep you current

10. Activity Date Status Participants Create Survey Nov 6 – 8 Complete PwC, Book Club Prize Team Members Conduct Survey “Training” Nov 9 Complete PwC, Book Club Full Representation Gather Data Nov 13 – 27 In Progress & On Target Book Club Full Representation Analyze Data Nov 27 – Dec 3 Planned PwC Review Results with Team Dec 4 Planned PwC, Book Club Full Representation Review Results with Advisory Council Dec 5 Planned PwC, Advisory Council Create Formula for Individual Benefits Dec 6 – End of Jan Planned PwC Calculate Individual Benefits End of Jan Planned Book Club Full Representation Prize Team Report Progress to Date

11. Prize Deliverables for Dec. 5 • Benchmark Information • Framing of total business activity within the Book Club and average workforce and system costs • Prize Summary • Total prize by category: FTE, systems, working capital, etc. • Total prize by process: deal capture, scheduling, settlement • Prize Details • Detail list and dollar benefit of each prize component • Qualitative Prizes • List of additional benefits not measured / unable to measure

12. Out of Scope Generally Lighter Generally Light Generally Heavier Out of Scope Propane Naphtha Gasoline VGO Asphalt Butane Reformate Jet Fuel Resid Crude Oil Gas Liquids Raffinate Diesel/2oil/Heating Oil Fuel Oil Natural Gasoline (unless chem) Aviation Gasoline Heavy Cycle Oil MTBE Gas Oil Light Cycle Oil Ethanol Coke Other Gasoline Blendstocks Other Diesel Blendstocks Refined Products Prize Scope

13. Issue Difficult for team to estimate prize outside systems and FTE savings (e.g. reduced working capital) Gathering data for feedstocks and resids difficult for some 14 of 15 members able to participate Suggested Resolution Make high-level savings estimates on aggregated information Estimate percentage of business activity; apply to benefit assumption Calculate prize and benchmark for participating members Prize Issues

14. Process Team ReportHal Zesch, Eric Rich • Process Team has evolved out of the Prize / Process Team. The Prize work team members will carry forward the Process effort. • The Team is led by: • Process Champs: Hal Zesch - Valero, Andy Esterer - Premcor • PwC: Eric Rich (lead), Sarah Goff, SME’s • Now that Prize Definition is underway, the Process effort has become a key factor toward defining the Business Model, refining the size of the Prize, and developing the Technology Options. Process Scope is a primary input to each element - we must understand not only what Blue Box will do, but how it will do it.

15. Process Team ReportScope Kick-Off • Initially worked with original Book Club Scope Team to secure common understanding of Blue Box “Placemat” and Component Specifications, and to develop the Enterprise Scope Document: • Enterprise Scope = the boundaries and framework by which the new entity - Book Club - will operate (located on project website, intranets.com under Process folder, version 3) • The purpose of the Enterprise Scope Document is to: • Clearly state the Enterprise Scope - “common denominator” - of the Book Club based on articulated assumptions • Gain validation and endorsement to this scope by work team members, Steering Team members, Advisory Committee, and other key Stakeholders, and • Establish clear boundaries for the Book Club Phase I Statement of Work.

16. Enterprise Scope Model BUSINESS PLAN, PRIZE OPTIONS Phase 2 Vision Enterprise Scope Long Term Vision Stage 1 What if 1…. Stage 2 What if 2…. Rollout Sched. Stage 3 What if 3…. Future Vision Scope Addition with Steering Team Approval Proprietary Process? FTC or Anti-Trust issues? Scope Addition or Future Vision? Screening Scope Ideas No Out of Scope No Wild Ideas Yes Yes Not a Book Club Vision

17. Scope Evolution… May through October ... Communication Tool Functionality / Standardization Industry Owned, Led, and Controlled ASP Built on Spec Intra-/Inter-company Supply, Bulk Sales Inter-company Supply Industry Solution Individual, independent systems Bulk and Supplier- to-Supplier Trucks Bulk Refined Product Ongoing evolution

18. Process Team ReportActions to Date • Enterprise Scope Document was reviewed with and revised by each of the Work Stream Teams during week 1. This provided the framework for developing the Prize Survey. Also approved by Legal. • Formal Scope management process was established by project team for Phase 1. If a Scope Issue is raised, the Steering Team will make the final decision. • Scope Challenge ideas were raised during initial week. These issues went through the formal scope management process and our first scope decisions were voted on by the Steering Team in Week 3 (see results on following page).

19. Steering Team Decisions: 11/15/00

20. Process Team ReportNext Steps We are planning a 2-day session to review Blue Box Process components on December 5 and 6. Objectives include: 1) Finalize and Validate the Level 2 Blue Box process maps ("straw dog" under development) from a peer-to-peer transaction perspective 2) Endorse, as a group, what each Blue Box Process will deliver for Subscribing companies 3) Assess "level of participation" options and impacts from a process perspective - such as the following SAMPLE options: Option 1: Functionality + Netting Option 2: Netting only Option 3: Selective Functionality + Netting, etc....

21. Governance TeamDave Kirshner, Wilson Haddow Book Club: • Jeff Beyersdorfer Premcor • Bill Esslinger BPAmoco • Warren Giese Coastal • Steve Gilbert Valero (in absence of Joe Van Horn) • Tommy Stuchell ExxonMobil Pipeline • Joe Van Horn Valero • Curt Anastasio UDS External Legal Counsel: PwC: • David Ivey - Baker & Hostetler • Chuck Chakravarth • Frank Doorley • Wilson Haddow

22. Governance Team Report Recommend: Proposed Book Club Business Model Create Deliverable: Definitive Agreement • This is the legal document that investors in Book Club will sign. It will commit their companies to fund the creation and initial operation of Book Club. It will also define the operational model for Blue Box • The draft version of this document is scheduled to be available for review by the beginning of January Note: Users of Blue Box will sign a Participant Agreement. This will be created during the next phase of the project. This document defines the terms and conditions of use of Blue Box.

23. Book Club Business Model Key Option Consideration: Is Book Club to be a cost recovery or a capital recovery (i.e. for profit) company? The business model option impacts the following multiple aspects of governance: • Equity funding and distribution • Financial model • Board structure • Operating model

24. Business Model Options Options Capital Recovery 3. Cost Recovery 1. Uncapped Profit 2. Capped Profit Uncapped Profit: profit used for return on capital investment Capped Profit: profit initially used to repay capital investment then distributed to users ACTION ITEM: Governance Team to include examples of companies.

25. Governance Milestones Milestonedate • Pros and Cons of Models to AC 12/01 • Present Business Model Options to AC 12/05 • Create draft Book Club financial model 12/14 • AC Endorsement of: Governance Design & Operating Models 01/10 Equity Model 01/14 Draft of Definitive Agreement 01/19

26. Technology Team ReportRay Kurkjy, John Ruddy Objectives ... • Identify technology options to support: • the Book Club. • transaction processing for member and subscriber companies. • Estimate associated costs of each option. Accomplishments • Built technology project plan. • Organized team in multiple conference calls. • Supplemented Prize survey with tech data.

27. Business Plan Team ReportWilson Haddow • Business Plan Team will bring together Prize, Process, Technology and Governance pieces • Team will be active in January • Nothing to report now ...

28. Next Meetings Next Meeting: December 5, 8:30 - 2:00 • 757 Eldridge, Houston • Project Update • “Prize” results • Process Definition (order of roll-out …) • GO/no go decision Proposed Dates for Future Meetings: • Tuesday, January 11 • Thursday, January 24

29. Meeting Wrap-Up • Review action items • Review Issue Bin • Meeting +/delta + amazing performance sticking to agenda time + good deck • Happy Thanksgiving!