DONG E&P Future plans and the role of the supplier

Transcription

1 DONG E&P Future plans and the role of the supplier OGIB Presentation June 2014

2 DONG E&P Future plans and the role of the suppliers Main topics Safety moment Contractor and supplier engagement DONG Energy and E&P in brief DONG E&P portfolio overview The Hejre project A new era in the North Sea Procurement and how to get access to DONG E&P

3 Safety moment Contractor relationships Pre-contract discussions and alignment of expectations on how to execute the contract prior to contract signing Work with relations as an integrated part of contract execution Management meetings with contractors to discuss QHSE expectations and performance Continuous improvement of performance by working with long-term suppliers Contract requirements Simplify contracts to ensure more clarity around QHSE requirements & expectations Contract execution Improve understanding of contracts during its execution Re-visit long-term contracts more regularly & evaluate the success with which they are being executed Establish a mechanism for closing the loop on sub-contractor performance 3

4 DONG Energy In Brief DONG Energy is one of the leading energy groups in N. Europe Our business is based on procuring, producing, distributing and trading in energy and related products in Northern Europe. DONG Energy has 6,500 employees and is headquartered in Denmark. Exploration & Production Wind Power Thermal Power Customers & Markets 4

5 DONG E&P In Brief Key figures (2013) Oil and gas production (2013) 31.7 mill. boe ~ 74% gas DONG E&P explores for and produces oil and gas in Denmark, Norway, the Faroe Islands, Greenland and in the United Kingdom in the West of Shetlands Area DONG E&P is among the 10 largest resource holders in the region Market position 77 licenses Net revenue 12.3 bn. DKK Exploration position Co-operation with several experienced majors West of Shetlands Barents Sea Active explorer across the region, including the Barents Sea EBITDA 7.3 bn. DKK ~ 49% share of DONG Energy EBITDA Largest licence holder in the region North Sea Second largest player in Danish North Sea The most active operator in the last decade - 13 exploration wells making 9 discoveries x2 Production towards

6 DONG E&P Operated and non-operated opportunities 6

7 DONG E&P DELIVER PORTFOLIO 2020 DONG E&P's project pipeline and first oil dates Completed Decided Expected DONG E&P Operated Marulk (NO) Siri Caisson (DK) Hejre (DK) Solsort (DK) Cambo (UK) Trym (NO) Oselvar (NO) South Arne phase 3 (DK) Laggan- Tormore (UK) Edradour (UK) Rosebank (UK) Glenlivet (UK) Mjølner (NO)

8 DONG E&P DK In Brief Hejre British Shelf Fields Siri Nini Gas 5710 Cecilie Gas Condensate 5706 Gas & Oil Norwegian Shelf 0002 Gert 1/06 Dutch Shelf A /98 A 3/09 Lulita Harald Hejre Svend 7/89 2/06 German Shelf Lulita B 0003 Amalie 5604 Solsort Svane Syd Arne Ravn Elly Rolf Syd Arne 4/ Dagmar Nini Vest 0004 Nini Nini Øst Sofie Siri Nord 6/95 Stine Segment-2 Siri Stine Segment-1 Cecilie Connie Rau 5605 Francisca Nora Valdemar 1/90 7/86 9/95 Adda 16/98 4/95 Stine Roar Tyra Tyra Sydøst Gorm Solsort Halfdan/NE Skjold Halfdan Lola Dan Alma Kraka Regnar Nini East Danish Shelf Esbjerg Gentofte Oil Oil & Gas DONG E&P licences Operator DONG E&P Hess Mærsk B C D Projection: Mercator (world) [not to scale] E F

9 DONG E&P DK, Hejre In Brief Hejre A new era in the North Sea

10 E&P Procurement From transactional to strategic

11 How to get access to DONG E&P? Preferred procurement strategy Green field development projects Functional specifications through international EPC(I) contractors Brown field development projects Depending on complexity through local EPC(I) contracts Rigs & Marine Typical through brokers or short listed key suppliers Exploration Frame agreements will be established with key players in the market for seismic data acquisition and processing Well construction Partnership established with international service provider for the majority of work OPEX Specific service contracts or frame agreements depending on scope Engineering and consultants Frame agreements with key engineering consultancy companies Note: Article 30 exemption to the Utilities Directive for Denmark, United Kingdom and Norway 11

12 How to engage with suppliers Stand-alone contracts Frame agreements or master service contracts Partnerships STRATEGIC OBJECTIVE Improved QHSE and CSR performance through close and long term relationships Better pricing and overall lower cost of supplies through a more efficient cooperation and robust relation Ability to keep track of supplier performance enabling continuous improvements throughout the lifecycle of the contract Brings supplier technology and knowledge to the attention of DONG E&P 12

13 How to take the customer and supplier relations to the next level Focus on total value of ownership Total Cost of Ownership Less-tangible benefits + + Value creation Purchase price Running costs Transportation Inventory costs Purchase / process costs Logistics systems Induced costs Waste Over-specification Warranty Strong supplier relations Securing supply in boom periods Access to suppliers resource capacity Risk mitigation Suppliers best resources Process optimisation New technology Market surveillance Supplier retention Future incremental cash flows Revenue growth Profitability improvements Innovative new customer segments Charge first-mover pricing Customer & supplier retention Service differentiation Working capital changes Opportunity spotting PAGE 13

14 Thank you for your attention! any questions? 14