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Business Without Boundaries TM

Business Without Boundaries TM. Equiva Trading Scope. One of world’s top three traders with STASCO & BP’s OTI. Shell, Texaco, StarEnterprise heritage and ownership Moving 7 million BCD of crude, products & feedstocks 560+ staff making all deals happen Physical and paper trading

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Business Without Boundaries TM

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  1. Business Without Boundaries TM

  2. Equiva Trading Scope One of world’s top three traders with STASCO & BP’s OTI... • Shell, Texaco, StarEnterprise heritage and ownership • Moving 7 million BCD of crude, products & feedstocks • 560+ staff making all deals happen • Physical and paper trading • Market power in trading off their assets • 45,000 miles of pipelines • 11 refineries • 114+ terminals • 800,000 BCD of exchanges

  3. Equiva Strategic Vision Evolutionary vision of Equiva leadership team... Knowledge focus Equiva Transformation Niche Trading External Customer Driven LEVERAGE THE ASSETS Internal Supply Optimization Base Supply Driven Asset focus BUSINESS EVOLUTION

  4. Current Challenges in Equiva PwC World Class Deal Flow Project discoveries... • Obtaining accurate and timely positions: • Volumes & inventories • Profitability and risk to monitor exposure • Stop deal leakage: • Standardized processes • Accurate deal capture • Enforceable policies and procedures • Implementing clear trading strategies • Managing contract balances (exchanges and buy/sell) • Routinely identifying ways to capitalize on industry upsets • Building knowledge capital & improving response across Equiva

  5. World Class Systems Adaptable Evolutionary Economic Processes l l Facilitate Business Processes l l Plan World Class Trading Organization l l Make l l Execute l Measure Settle Equiva Strategy Base Supply l Internal Supply l External Customer l Niche Trading l Alignment Essential to Trading Success Business Strategy Alignment Business Processes Information Systems Market Strategy

  6. Partners Customers Settle Measure Make Plan Execute Customers Information Systems Suppliers Alliances Use Standardised, Repeatable Processes Provide Accurate Risk Measurement Discover & Implement Effective Trading Strategies Improve Asset Optimisation Leverage Experience World Class Trading Organization Leverage Alliance Assets Partners Customers Suppliers Alliances Measure Settle Plan Make Execute Information Systems

  7. Equiva Business Model Plan the Deal Make the Deal Execute the Deal Measure the Deal Settle the Deal 1.0 Position - Review Yesterday - New Deals Program TPT 2.0 Analytics - physical trades Exchanges 3.0 Analytics - paper trades Every day is a new deal 9.0 Ending Daily Position 4.0 Physical Trades 6.0 8.0 Review Risk Post Execution Crude Movements 10.0 Accounting Activities Transportation & Marketing Buy/Sell Exposure Measurement on Paper Trades Exchanges 5.0 Paper Trades Program TPT 7.0 Paper Execution 11.0 Post Deal Analytics Risk Risk 12.0 Dynamic Operational Risk Measures Continuous improvement across the business Highly Individual “Custom” Processes More Structured “Common” Processes

  8. World Class Systems Adaptable Evolutionary Economic Processes l l Facilitate Business Processes l l Plan World Class Trading Organization l l Make l l Execute l Measure Settle Equiva Strategy Base Supply l Internal Supply l External Customer l Niche Trading l World Class Deal Flow Processes Business Strategy Alignment Business Processes Information Systems Market Strategy

  9. Challenges Inv DB Ref. DB Rack DB “As Is”: Manage Position Accounting Trading Meeting Excel EDI - Recon • Multiple Source Types: • Data • EDI/net • Phones - meetings • Multiple databases • Slow Response • Non Std. Data Capture • Difficult Collaboration • Lost Opportunities • Upsets from incorrect info • No Integrated Planning Scheduling Refinery Plan I/net - Pipenet Refinery Ops Phone Call Terminal Ops

  10. Access Knowledge Collaborate A3 Delay Delay A2 A1 Delay Input or Access Software Locate Experts As-Is: Complex Work Flow Today, Equiva staff must constantly step out of process to get job done... We all work ... Multiple Simultaneous Interrelated Processes B Delay

  11. Knowledge Thinker Collaboration A 1 5 2 3 4 B Locate Experts • Video • Audio • Screen • Sharing • Groupware • Chat rooms To-Be: Shortest Path Process Eliminate delays with “push technology” delivered to your process... Update Lessons Learned My Personal Process Deal Flow or Software Appl. Internal External • Wide geography • Actively learning • Different experts at • Different times

  12. 1. Information 2. Work Flow Process Centric Across Silos l l Document Management Dynamic Flows l l Searchable Information flow l l Alerts l Process Centric 4. Knowledge Capital 3. Collaboration Learning Organization Videoconferencing l l Institutionalized Electronic Meetings l l Historical Reference Group Decision Tools l l Desktop Sharing l What is Business Without Boundaries TM A new way of thinking Knowledge Capital Collaboration Business Process Work Flow Information

  13. Application to Key Equiva Challenges Business Without Boundaries TM Improve Info Work Flow Knowledge Capital Collaboration 1. Obtain Accurate & Timely Positions 2. Stop Deal Leakage 3. Improve Asset Optimization 4. Implement Niche Trading Strategies    

  14. Counter Party Hedge Position PORTAL Futures Position PORTAL PORTAL Collaboration Knowledge Capital Sharing of Information Work Flow PORTAL PORTAL Production Positions Scheduler Inventory Quantity Supplied Terminal Positions PORTAL 1. Obtain Accurate & Timely Position Trading What happened yesterday? Accurate Position Exposure Minimize losses/Risk

  15. World Class Systems Adaptable Evolutionary Economic Processes l l Facilitate Business Processes l l Plan World Class Trading Organization l l Make l l Execute l Measure Settle Equiva Strategy Base Supply l Internal Supply l External Customer l Niche Trading l World Class Systems Approach Business Strategy Alignment Business Processes Information Systems Market Strategy

  16. VIEW VIEW VIEW Current Target Design Features Measure the Deal Execute the Deal Make the Deal Plan the Deal Settle the Deal Eliminate Silos l CEO Maximize Legacy Apps l Best of Breed l INFORMATION Multiple Views l TRADER SCHEDULER Fully Integrated l INFORMATION COUNTER PARTY INFORMATION

  17. View View COUNTER PARTY View Current Target Architecture A typical solution is a summary of applications plus data warehouses... Features Modular l CEO Knowledge Management Plug-and-Play l Best of Breed l View Based l Decision Support TRADER SCHEDULER Fully Integrated l Databases Warehouses ERP Solution Transaction Systems

  18. Knowledge Capital Collaboration Features Process Centric Information l Real Time Searches l CEO Portals l Tailored Personalized View PROCESS CENTRIC INFORMATION l PORTAL TRADER SCHEDULER Capability PROCESS CENTRIC INFORMATION PORTAL COUNTER PARTY Improved Communication l Constantly Improving l PROCESS CENTRIC INFORMATION Reduced Process Leakage l PORTAL Cyclical Learning l Business Process Work Flow Information Visionary Target Architecture Measure the Deal Execute the Deal Make the Deal Plan the Deal Settle the Deal

  19. Trading Application is Perfect Knowledge Capital Collaboration 3. Collaboration is key to success 4. Knowledge is power Architecture now matches the way Equiva works !. Internal & external information is a foundation 2. Efficient deal flow process is essential Business Process Work Flow Information

  20. Equiva Transformation Strategic Vision Achieved Collaboration Knowledge Capital Niche Trading External Customer Driven LEVERAGE THE ASSETS Internal Supply Optimization Base Supply Driven BUSINESS EVOLUTION Business Process Work Flow Information

  21. What’s Next?

  22. Appendix

  23. PORTAL PORTAL PORTAL PORTAL PORTAL 2. Stop Deal Leakage Deal Capture Settlement Forecast Cash Rec. Pay Counter Party Payment PORTAL Consistent Capture Multiple Systems Continuous Broadcasting Collaboration Knowledge Capital Sharing of Information Work Flow Counter Party Position Scheduler Inventory Quantity Supplied Refinery Availability

  24. Trading Planning ERP APS PORTAL Accurate Asset Capabilities PORTAL PORTAL PORTAL PORTAL 3. Improve Asset Optimization Process Forecast Demand Facilitate Corporate Plan Global Optimization Economies of Scale Lower Operation Costs Collaboration Knowledge Capital Sharing of Information Work Flow PORTAL Refinery 1 LP Model Inventory Scheduler Inventory Supply Refinery 2 LP Model Inventory

  25. Planning Deal Type VAR MTM PORTAL Risk Models PORTAL Collaboration Knowledge Capital Sharing of Information Work Flow PORTAL PORTAL Counter Party Intelligence Scheduler Inventory Quantity Supplied Competitor Position PORTAL 4. Implement Niche Trading Strategies Trading Make the Deal Accurate Position Measured Exposure Minimize loses/Risk Accurate Asset Capability PORTAL

  26. NWG 1 NWG 2 NWG 3 NWG 4 Planning Refinery Trader Scheduler NWG 5 Re-Think Natural Work Groups Planning Analyst Trader Scheduler Exchange Manager Back Office Assistant

  27. Vision Benefits Value Added redistribution of trading activities... 20% strategy work 15% strategy & innovation 60% program development 25% program development 60% administration, paperwork, answering questions 20% administration Current Equiva after transformation

  28. Definitions • Base Supply Driven - • Driven by asset requirements with little regard for margin optimization • Internal Supply Optimization - • Equal focus on asset needs and margin optimization • External Customer Driven - • Maximization of external customer market share and profit - unconstrained by the needs of the internal assets • Niche Trading - • Driven purely by profitability, and executed to exploit market inefficiencies where the organization has an information or asset advantage

  29. Notes on Position Problem 1st Slide Need to show view that noone is using the same position information Client need consistent, clear, accurate and timely position information Source of Info from many locations Limited available of user views tailored to needs 2nd Slide Need to show how 4 Green Boxes allow context sensitive views of information.

  30. System Planners Local Requirements Traders (Demand) Governing Div. Board Improvements PORTAL B A • Fully Integrated • Real Time Information • Improved Cycle Time • Partner Integration • Portals PORTAL Zoning Rules PORTAL Position Information - Balances, Transactions Materials list, surveys, CAD/CAM PORTAL Engineering Construction Schedulers Refinery Group Company Company “To Be” Current Position Requirements (Demand) Payment Services Equipme nt Labor PORTAL

  31. Notes on Exchange Problem 1st Slide Need to show view that noone is using the same exchange information Client need consistent, clear, accurate and timely exch. information Source of Info from many locations Limited available of user views tailored to needs Multiple opportunities are lost 2nd Slide Need to show how 4 Green Boxes allow context sensitive views of information. Users now can leverage from the situation

  32. Challenges Inv DB Rack DB “As Is” Manage Exchanges Trading Exchange Manager Multiple Data Sources Non Std. Data Capture Unstructured Collaboration Lost Opportunities No Integrated Planning Scheduling Accounting Phone Call Terminal Ops Exchange Partner

  33. Local Exch Balance Mgt. Traders Governing Board Improvements PORTAL • Fully Integrated • Real Time Information • Improved Cycle Time • Partner Integration • Portals PORTAL Zoning Rules PORTAL Exchange Information (Contract Terms, Balances) Materials list, surveys, CAD/CAM PORTAL Engineering Schedulers Company “To Be” Manage Exchanges Exchange Planners Requirements (Demand) Exch Settle Payment Services Equipme nt Labor PORTAL Exchange Partner (ext) Construction Company

  34. PORTAL PORTAL OMS Report PORTAL PORTAL PORTAL Operational LP Model “To Be” Response Unexpected Events Trader Planner Forecast Demand ERP APS PORTAL Corporate LP Model Market Opportunity Real Time Information Agility to Respond Opportunities Inventory Supply Scheduler Refinery A (Shut Down FCC Unit)

  35. PORTAL PORTAL PORTAL PORTAL Refinery 1 LP Model Inventory OMS Refinery 2 LP Model Inventory OMS Scheduler Inventory Supply PORTAL Trading Planning Forecast Demand ERP APS PORTAL Corporate LP Model Accurate Market Opportunities Asset Optimization Collaboration Knowledge Management Visibility / Agility

  36. Features I • Industry standard - open architecture • Ability to search across media • Internal & external access to knowledge

  37. Features II • Integrate knowledge based on your personal profile • Data • Objects • Video • Best Practices

  38. Features II • Uses a desk level process basis with multiple pointers vs. a “single query” from a data warehouse • Do not need to be expert to access key data • Pulls together a number of point solutions • Inter weaves as part of process flow

  39. Trader Scheduler Planner Refinery Plan Make Execute Measure Settle ???? K Workers K Processes Inventory Schedules Reports Exchanges Distribution K Elements K-Source 1 K-Source n

  40. Notes on Upset Problem 1st Slide Upsets occur, and information to react is slow to come High Energy Time subject to bad decisions Availability to leverage prior decisions is not available Time to replan major upsets is lengthy 2nd Slide Information now available Leverage previous knowledge and experiences Ability now to use visibility and agility to leverage the upset condition.

  41. Business Process Work Flow Planning Architecture System Architecture StrategicPlanning Information Planning Tools Data Warehouse TacticalPlanning OperationalPlanning Transaction ERP Execution Knowledge Transfer Collaboration Integrated Planning Architecture

  42. Typical Independent Silos l Varied Degrees of Integration l Process Leakage l Vertical Views l Redundancy l Serial Work l DATA FLOW Typical Architecture E-MAIL PHONE Refinery I Planner Scheduler Trader Phone, Fax, E-mail Links Silos FAX Refinery 2

  43. Business Process Work Flow Information Process Centric Exploit White Space AcrossSystems Across Technology Visionary Process Centric Information l Spans Technology l Reduced Process Leakage l Desktop Information Sharing PROCESS CENTRIC INFORMATION l Real Time l Cyclical Learning l Knowledge Management Collaboration Videoconferencing Electronic Meeting Information Sharing Learning Sharing Raising the Bar Visionary E-Business Architecture Outage Management Mobile Data External 3rd Party Gas Measurement SAP CCS CEO PORTAL CUSTOMER PORTAL PROCESS CENTRIC INFORMATION EMPLOYEE PROCESS CENTRIC INFORMATION PORTAL

  44. Niche Trading External Customer Driven Strategic Vision Equiva Transformation MARKET VIEW Internal Supply Optimization Base Supply Driven LEVERAGE OF ASSETS

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